PPI scandal costs RBS £1.7bn

The Royal Bank of Scotland's announcement that mis-sold payment protection insurance (PPI) claims have cost the taxpayer-backed bank £1.7 billion has taken the total bill for Britain's "Big Four" lenders to more than £10 billion.

Yesterday, Lloyds Banking Group set aside another £1 billion to cover PPI claims, bringing the total to £5.3 billion, while Barclays announced an additional £700 million, giving it a total of £2 billion.

HSBC is forecast to post a more modest provision next week.

Stephen Hester, RBS Group chief executive, said the Royal Bank of Scotland is "having to work very hard to stand still", adding, "We aspire to achieve much more".

Mr Hester said in the bank's interim management statement:

The Royal Bank of Scotland (RBS) unveiled a pre-tax loss of £1.26 billion in the third quarter, compared to a £2 billion profit during the same period last year.

RBS said it also had a third quarter net loss of £1.38 billion.

The Royal Bank of Scotland (RBS) has revealed an additional £400 million charge to cover the cost of mis-sold payment protection insurance (PPI) claims, bringing the total bill to £1.7 billion.

RBS also said the cost of its recent IT glitch had risen by £50 million to £175 million.