Lloyds Banking Group reported a £3.47bn pre-tax loss after setting aside £3.2bn to cover potential Payment Protection Insurance mis-selling claims and taking a further £1.1bn hit in Ireland.

The lender, which is 41pc owned by the British taxpayer, made the provision after UK banks last month lost a UK court case on how the insurance policies were sold to millions of customers.

In an interim management statement on Thursday, Antonio Horta-Osorio, presiding over a results presentation for the first time since taking over as chief executive in March, said the multi-billion pound provision was "sensible, prudent and the right thing to do".

He said Lloyds had withdrawn from all legal proceedings against the Financial Services Authority in relation to PPI.

"I don't want to continue a long-running dispute with our regulator," Mr Horta-Osorio said.

The provision by Britain's largest retail bank will put pressure on other major lenders to make similar assessments of the potential scale of claims and Mr Horta-Osorio said that he thought Lloyds' action would "draw a line under the issue".........Read more HERE