Lloyds has taken a near £1bn hit - revealing it has set aside another £700m for PPI claims and £283m over mortgage arrears errors.
Sky News revealed on Wednesday that the banking group was to repay nearly £300m to about 600,000 customers over failings in the way it applied mortgage arrears policies.
The lender said on Thursday that it had also put aside extra cash to address the mis-selling of payment protection insurance to reflect current claim volumes, reinforcing its status as by far the worst-exposed lender to the PPI scandal.
It comes just four months after the bank announced a £350m writedown to cover the mounting bill, which has now reached more than £18bn.
The mortgage redress scheme is understood to centre on the way Lloyds applied policies relating to financial difficulty assessments, leading to some customers being charged in error between 2009 and 2016.
Nevertheless, Lloyds' half-year results reflected a continuing strong performance by the underlying business, despite the continuing spectre of ultra-low interest rates.
It reported pre-tax profits of £2.5bn in the first six months of 2017 - up 4% on the same period last year.
This includes the additional PPI provisions which are set to cover around 9,000 claims per week through to the deadline set at the end of August 2019.
These are its first set of results since the Government sold its last remaining stake in Lloyds Banking Group in May, returning the lender entirely to private ownership.
Lloyds has since resumed dividend payments, and underlined its renewed confidence last year with a deal to acquire MBNA, the giant credit card business.
CEO Antonio Horta-Osorio said: "We have delivered another strong set of results with increased underlying and statutory profit and strong capital generation, whilst completing the acquisition of MBNA and returning to full private ownership.
"Our differentiated UK focused business model continues to deliver, with our cost leadership and lower risk positioning providing competitive advantage."
In addition to its vast PPI bill, Lloyds has set aside £100m to deal with the fallout from a fraud at the Reading branch of HBOS, which has seen six people jailed and compensation claims.
Victims of the fraud included Noel Edmonds , the television presenter, who this week increased his compensation claim against the bank to £300m.