LONDON — Britain's Lloyds Banking Group dived into the red in the third quarter after setting aside more cash to compensate customers mis-sold the controversial insurance product PPI, it said on Thursday.

The UK high-street giant, which received a vast bailout during the global financial crisis, said in a results statement that it made a loss after taxation of £238 million ($307 million, 276 million euros) in the three months to September.

That contrasted with net profit of about £1.4 billion in the same period a year earlier.

The lender revealed that it took another £1.8 billion hit to cover last-minute claims regarding a UK-wide practice of mis-selling payment protection insurance (PPI) over a number of years.

The news sent Lloyds shares sliding 2.4 percent to 56.23 pence in mid-morning deals on London's falling stock market.

Chief Executive Antonio Horta-Osorio said he was "disappointed" that the performance was "significantly impacted" by the extra PPI charge.

However, he noted that it was "driven by an unprecedented level of PPI information requests received in August".

Most major British banks faced a rush of in compensation claims ahead of the deadline to seek compensation two months ago.

Lloyds was by far the worst affected British bank in the crisis — and the latest provisions take its total bill to more than £22 billion.

That is almost half the sector's total, which stands at in excess of £50 billion.

While PPI was intended to cover missed payments, for example if a customer lost their job or became ill, in many cases they were unaware it had been added to a product, while others would never have been able to make claims under the policies.

Customers had until Aug. 29 to question lenders whether they have had PPI added to credit products such as loans, mortgages or payment cards.

Experts estimate that some 64 million PPI policies were sold in Britain between 1990 and 2010.

Meanwhile, LBG was the recipient of a vast state bailout during the global financial crisis.

However it returned to full private ownership in 2017 after the government had steadily offloaded its stake by returning about £21 billion to the taxpayer.

The London-listed financial services giant, whose brands include Lloyds, Halifax, Bank of Scotland and Scottish Widows, operates primarily in Britain with more than 30 million commercial and residential customers. — AFP