Lloyds Banking Group will make extra provisions for payment protection insurance (PPI) claims of between £1.2-1.8 billion in its third quarter results and is suspending its 2019 share buyback programme, it said today. 

Banks are setting aside more money for PPI following a rush of claims against mis-selling of the insurance, ahead of the deadline on August 29. 

RBS said last week it faced additional costs of up to £900m from Britain's most costly consumer insurance scandal, while Clydesdale Bank made a fresh £300-450m provision.

Lloyds said the charge will dent its profitability, scrapping its guidance that it will have a return on tangible equity of around 12% this year. 

It also warned that its capital build in 2019 will be below its ongoing 170 to 200 basis points a year guidance. 

The PPI saga has already cost UK lenders more than £36 billion in compensation payouts, but a surge in last minute claims is ratcheting up costs further. 

Lloyds had made a provision in its second quarter results of £650m for mis-selling the insurance.