LONDON, July 31 (Reuters) - Lloyds Banking Group reported a 32 percent increase in underlying first-half profit,helping it absorb an increase in the cost of compensatingcustomers mis-sold loan insurance.
The bank, which is 25 percent-owned by the government havingbeen rescued during the 2008 financial crisis, reported anunderlying profit of 3.8 billion pounds ($6.4 billion),benefiting from an increased margin and improving economicconditions.
Lloyds said it had set aside an extra 600 million pounds tocompensate customers mis-sold payment protection insurance,taking its total bill to over 10 billion pounds.($1 = 0.5913 British Pounds) (Reporting by Matt Scuffham; Editing by Steve Slater)