Lloyds Banking Group set aside a further £1.4 billion ($2.2 billion) to compensate customers for its mis-selling of loan insurance.
This brings the total bill for the scandal associated with the selling of payment protection insurance (PPI) to £13.4 billion, the U.K. lender said on Friday, when it published its results for the first half of the year.
The bank called the additional provision "disappointing," in its earnings report and attributed it in part to having received a higher than expected number of complaints.
Still, Lloyds managed to report a 15 percent jump in pre-tax profit to £4.4 billion, driven in part by a 75 percent drop in its impairment charge to £179 million ($273 million).
This was despite incurring a further charge of £435 million the first half of 2015.
The FTSE 100 component, which has market capitalization of approximately £61.5 billion, will issue an interim dividend of 75 pence.