RBS raises PPI claims bill by a further £400m

The Royal Bank of Scotland, which is 80%-owned by the UK government, is earmarking an extra £400m to compensate customers who were mis-sold Payment Protection Insurance (PPI).

The additional cost helped plunge the bank into a loss of £1.26bn in the three months to September.

The bank's total charge for PPI mis-selling is now £1.7bn.

Personal Finance Correspondent, Simon Gompertz, says the PPI cover was inappropriate in many cases.