BARCLAYS has set aside an extra £600m to meet compensation claims for mis-selling payment protection insurance (PPI) in the third quarter.

The sum exceeds some banking expert estimates for £500m in the three months to September and brings the total provision over the past two quarters alone to £1bn, after £400m was put aside in the second quarter.

The banking industry's PPI bill already stands at more than £30bn.

The Financial Conduct Authority has put a June 2019 deadline on claims in an effort to draw a line under what has been one of the biggest banking scandals in history.

Barclays' statutory profit before tax was up 35 per cent to £837m in the third quarter.

Chief executive, Jes Staley, said: “The growing momentum in attaining our strategic goals means we can feel optimistic of our prospects of completing the restructuring.”

Meanwhile, the Government has reduced its stake in Lloyds Banking Group to less than nine per cent following a share sale, gaining more than £340m for the Treasury.

It means taxpayers’ stake in the bank now stands at 8.99 per cent, with just under £17bn being returned to Government coffers since the lender’s bailout.

Chancellor Philip Hammond said: “Selling our shares in Lloyds and making sure we get back all the cash taxpayers injected into it during the financial crisis is one of my top priorities.”