A recent announcement made by the Lloyds Banking Group regarding compensation to clients by an additional £1 billion has taken its total compensation provisions above £5 billion, as per revelations of a new report.

It is being said that the declaration has also prompted the bank to face a net loss for the year's third quarter. However, a rise of 3.5% was noted in shares in London in Thursday morning.

Thursday, it has been decided that the clients who were inappropriately sold insurance would be paid off. £700 million were announced by Barclays as well on Wednesday to be added to the £1.3 billion previously announced.

As per the findings, not only the Barclays and Royal Bank of Scotland, but HSBC and many other largest banks of Britain are required set aside money for compensating clients. In all, an amount of £10 billion is needed to reimburse them. Since, the clientele that was sold payment protection insurance was large in number.

The insurance is meant for those who fall ill or are laid off due to something. And most of the customers even are unaware that they were sold the same when they applied for loans or mortgages. Some have even found it difficult to make claims on policies.