LONDON, Oct 29 (Reuters) - Lloyds Banking Group's underlying profit almost doubled in the latest quarter thanks toan improved interest margin and lower costs, although the banktook another big bill to compensate customers for mis-soldinsurance products.
Lloyds said it took a 750 million pound ($1.2 billion)charge for the mis-selling of payment protection insurance (PPI)in the third quarter, meaning it has now set aside more than 8billion pounds for the scandal, far more than any other bank.
It said PPI complaint volumes were declining at a slowerthan expected rate and the response to its letters to customersoffering compensation where appropriate had been higher thanforecast.
The PPI charge hit its statutory profit. Underlying profitsat Lloyds, which is 33 percent owned by the UK government, were1.52 billion pounds in the third quarter, up from 831 millionthe year before and in line with the average forecast accordingto a Reuters poll.
"The outlook for the UK economy now looks more positive andthe group's business model is well matched to the economicenvironment," the bank said in a statement.
The interest margin is the difference between the interestrate paid to savers and the interest rate charged to borrowers.
Lloyds (LLOY)