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Lloyds, the U.K.’s biggest retail bank, was bailed out by United Kingdom taxpayers during the financial crisis, with the government taking a 39% stake.

Zacks lowered shares of Lloyds Banking Group PLC from a “hold” rating to a “sell” rating in a research note on Tuesday, August 18th.

With the state having bailed out RBS at a cost of 502 pence a share, the taxpayer is taking a sizeable hit on the sale.

Yet their collective endorsement does little to disguise the bald facts of Tuesday morning’s share sale: the taxpayer has lost more than £1bn on the sale of a 5.4% stake in RBS to institutional investors.

UK Financial Investments, the body that holds the government’s RBS stake, said it would sell about 600 million shares, representing 5.2 per cent of the bank, in a quick-fire sale to institutional investors after the market closed.

State-backed Lloyds Banking Group has added £1.4 billion to its bill for compensating customers mis-sold payment protection insurance (PPI).

Lloyds said it would “look to return surplus capital above core capital of about 13%”, but the weight of charges put a negative tint on this and further progress made by the bank during its first half.

Lloyds Banking (LON:LLOY) set aside an extra £1.4bn for PPI mis-selling as it missed profit expectations in the first half of the year.

“We have 7000 people processing complaints, yet one-third of the complaints we receive do not have a valid PPI policy behind them”, he said.

It is one of a number of scandals, including the attempted rigging of benchmark interest and foreign exchange rates, which have undermined public trust in Britain’s banks.

The pay-outs will help to support on-going efforts by the government to sell down its stake in Lloyds, which has fallen from 43 per cent at the height of the banking crisis to 15 per cent now.

Lloyds called the additional bill “disappointing” and revealed it had increased to 1.4 million the number of complaints it had initially rejected but was now reviewing afresh.

Lloyds Banking Group set aside a further £1.4 billion ($2.2 billion) to compensate customers for its mis-selling of loan insurance.

The latest provision was around £400million more than had been expected as complaints have continued to flood in.

LLOYDS has posted a 38 per cent surge in first-half profits despite setting aside a further £1.4billion to cover compensation costs from the mis-selling of payment protection insurance.