Banks involved in the mis-selling of insurance protection are to set aside another £1bn, taking the total to almost £8bn.

By Mark Kleinman, City Editor - Sky News.......

I can reveal that the four largest high street lenders will signal the increased provisions in their half-year results, which kick off with Lloyds Banking Group on Thursday. Industry sources tell me that both Lloyds and HSBC will reveal that they set aside more than their respective PPI provisions for the first quarter of £375m and £300m for the period between April and June. Royal Bank of Scotland is expected to confirm that it is making a further allocation similar to its £125m first-quarter charge, while only Barclays is expected to allocate a smaller sum than its earlier £300m provision. Assuming the new charges are disclosed by the banks, it would mean that Lloyds – the largest seller of PPI policies – will have had to fork out at least £4bn alone for its mis-selling activity. The total bill for the industry will have risen to almost £8bn, with analysts now anticipating that it could ultimately reach at least £10bn.

The latest financial hit underlines the grave impact of one of Britain's biggest bank mis-selling scandals, and comes amid intense political pressure for an overhaul of the industry's culture and business practices. I revealed last night the details of an inquiry commissioned by Barclays into its business activities following its £290m fine for Libor manipulation and the enforced resignation of Bob Diamond, its chief executive. Barclays will announce the plans today.....Read more here: Exclusive: Banks Face £1bn New PPI Hit