The bill for mis-sold payment protection insurance (PPI) at taxpayer-backed Lloyds Banking Group smashed through the £5bn barrier today as claims against the bank continue to pile up.

The 40% state-owned lender was pushed to a £144m loss in the three months to September 30 as it took an additional £1bn charge for dealing with the scandal, taking the total to £5.3bn.

Stripping out the cost of PPI, the group doubled its underlying profit to a better-than-expected £840m in the third quarter as its slashed bad debts and narrowed losses from its non-core businesses.