By Daniel Hunter

Lloyds Banking Group, upon announcing a pre-tax profit for the first three months of 2012 of £288m, have said they will set aside £375m to settle payment protection insurance (PPI) claims.

Bosses at Lloyds said it "reflected the subdued UK economic environment".

PPI is supposed to cover borrowers' loan repayments if they fall ill, die, or lose their jobs. But it became highly controversial and there have been years of campaigning by consumer groups against the widespread mis-selling of the policies.

Lloyds has now, in total, set aside £3.6 billion to cover compensation payments.

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