Royal Bank of Scotland could have to shell out a further £900m to settle a final compensation bill for mis-selling payment protection insurance after a last-minute surge in claims from customers. 

The bank said today it had made an additional provision of £600-900m, on top of the £5.3 billion already set aside, after claims received in August exceeded expectations. 

The news gives credence to recent comments by industry experts that Britain's most costly consumer banking scandal could yet have a sting in the tail even after an August 29 compensation deadline. 

UK banks have so far paid out more than £36 billion to consumers eight years after it first emerged they were missold the loans insurance on a vast scale. 

PPI policies were sold alongside a personal loan or mortgage to cover repayments if borrowers fell ill or lost jobs but most were sold unsuitable policies and would never have been able to claim. 

RBS, which owns Ulster Bank here, said £4.9 billion of its total provisions has already been utilised. 

UK consumers had been bombarded with commercials and advertisements pushing them to make last minute PPI claims to their banks. 

One such campaign was financed by Britain's banking regulator, the Financial Conduct Authority and fronted by US actor-turned-politician Arnold Schwarzenegger. 

RBS's fresh provision will be reflected in the third quarter results, the bank said.

The processing of PPI claims were ongoing and the ultimate provision recognised could be above or below the £600-900m range, it added.