Taxpayer-backed Lloyds Banking Group today revealed a first-half loss after taking an additional £700m hit for mis-selling payment protection insurance (PPI).

The 40% state-owned bank has now set aside a total of more than £4.2bn to deal with PPI compensation after another increase in the volume of claims.

Lloyds, which warned that the final provision for PPI mis-selling may change, revealed pre-tax losses of £439m for the six months to June 30, compared with a £3.3bn loss in the same period last year.

Turning to the Libor-fixing affair that has rocked the banking industry in recent weeks, Lloyds said it was currently not possible to "predict the scope and ultimate outcome" of various investigations.