PPI mis-selling charge reaches £5.3bn at Lloyds Lloyds Banking Group has raised its charge for PPI mis-selling. Photograph: Ben Stansall/AFP/Getty Images Lloyds Banking Group's bill to compensate customers who were mis-sold payment protection insurance has risen to £5.3bn after the bailed out-bank announced it would take another £1bn charge to cover the costs of redress and warned there could be more to come. The major high street banks combined have now incurred costs relating to the PPI scandal of more than £10bn - a total that is expected to increase again on Friday when Royal Bank of Scotland is forecast to add £400m to its existing £1.3bn charge. Consumer body Which? calculates that the total PPI compensation bill, including smaller banks and building societies, is more than £12bn, surpassing the pension mis-selling scandal of the 1980s to become the costliest in history. In the past three months, Lloyds has paid out £8m a day. António Horta-Osório, chief executive of Lloyds, warned that the bank was still unable to quantify the total cost of the PPI affair as the bank was continuing to assess the level of claims being made - some of which, the bank insists, are being submitted by claims management firms on behalf of customers who do not have policies with the bank. "A number of uncertainties remain as to the eventual cost to the group of PPI complaints," Lloyds said. By the time it reports its full-year results for 2012, on 1 March, the bank said it expected to have a "higher degree of confidence in forecast trends and the ultimate likely cost of PPI." The provisions for compensation over PPI - which was sold to cover loan repayments if customers ran into financial difficulties - helped drive the bank, just under 40% owned by the taxpayer, to a pre-tax loss of £583m for the first nine months of the year. Lloyds said that while the volume of PPI complaints had slowed in the third quarter, it is still higher than the estimates it made in the second half of the year. Even so, the extra £1bn provision was less than the £2.3bn that some analysts had feared. The bank's shares leapt 8% to 43.9p - but even after the rise, the shares remain well below the 73p average price at which the taxpayer bailed out the bank, representing a paper loss of around £5bn. Horta-Osório insisted he had "absolutely no regrets" about his ground-breaking decision in March 2011 to withdraw from an industry-wide attempt to fight PPI claims through the courts. That move led to the collapse of the united front and subsequently to charges being taken across the industry. Barclays' provision has reached £2bn, HSBC's results on Monday will be scrutinised for an increase to its £1.1bn provision, while Santander has put aside around £500m. Lloyds was the first take a provision, of £3.2bn, in May 2011, which led to bonuses being clawed back from Horta-Osório's predecessor Eric Daniels and other former and current Lloyds bankers. Without taking the provision, Lloyds "would have been building on false foundations," said Horta-Osório, who became chief executive at the start of March 2011. "Banks had lost sight of their core values, had become complacent, non-customer-focused and inefficient," he said. We could not transform this business without addressing the PPI legacy. The Portuguese-born banker insisted Lloyds was ahead of its strategic plan - which will eventually to lead to almost 45,000 job cuts across the bank, which includes brands such as Halifax and Scottish Widows. The bank is nonetheless trying to fight back against management companies making PPI claims on behalf of customers. Lloyds wrote to the Financial Ombudsman Service (FOS) last month to suggest claims management companies pay the £850m costs associated with processing the claims they bring. Lloyds insists that 50% of the claims it receives are "duplicates or dubious" but Natalie Ceeney, head of the FOS, told MPs this week that too many claims were being thrown out by the banks. Lloyds insisted on Thursday that this was not the case and asked Ceeney for data. Even so, the FOS believes that 98% of claims against Lloyds end up being paid out. As well as the PPI scandal, Lloyds is also paying claims in German courts for policies sold by Clerical Medical through intermediaries in Germany. Another £150m provision was taken in the third quarter, taking the total to £325m. Lloyds's £583m loss for the nine-month period was narrower than the £3.8bn it reported for the same period a year ago. Personal pensions In the early 1990s final salary pension scheme savers were led to ditch gold-plated plans and buy risky stock-market products with promises of cash bonuses to switch. Some banks were offering transfer rates to businesses to win million pound contracts from pension schemes. Up to 3m workers were affected. Cost to banks: £11.8bn. Mortgage endowments During the late 1990s about 5 million homeowners were told that by having an interest-only mortgage and investing the "repayment" part into a life insurance policy they would repay the capital and make a profit. Investors were told later the investment wouldn't repay the loans. Cost to banks: £2.7bn. Payment protection insurance Sold on unsecured loans, PPI was to protect customers if they couldn't pay. Banks staff were given bonuses for selling PPI and 18m policies were sold. But small print excluded most policyholders from claims. Cost to banks: £12.3bn. Interest-rate swaps The newest scandal: banks selling loans to businesses linked to certain interest rates. The Financial Services Authority said products were complicated and mis-sold. Cost to banks: Unknown.