Lloyds Banking Group experienced a net loss in the first half of 2012 following its decision to set aside more money to deal with PPI compensation claims.
Figures released by the major UK financier this morning (26 July) revealed the firm managed a net loss of £641 million ($933 million) during this six-month period.
This represents a significantly healthier loss level than the £2.28 billion posted in the corresponding timeframe last year, but still came as a surprise to the majority of analysts, who expected the lender to record a profit.
However, the fact the bank opted to allocate a further £700 million to its PPI fund during the second quarter of 2012 - following on from an additional provision of £375 million in quarter one - has restricted its performance.
Nevertheless, Antonio Horta-Osario, chief executive officer at Lloyds, insisted: "We are on track to deliver our strategic aims and we are making significant progress with our financial targets."
By Gary Cooper