The extra charge pushed Lloyds, which is 40% owned by taxpayers, to a £144 million loss in the third quarter.
Stripping out the cost of PPI, though, the bank doubled its underlying profit to a better-than-expected £840 million in the three months to September 30.
The gains came after Lloyds slashed bad debts and narrowed losses from its non-core businesses.
More top news
It will be a frosty Christmas morning across the UK but any chance of snow is limited to the Scottish mountains.
Fainting dogs, dancing grooms and an attacker who picked on the wrong girl all featured highly in our most-read stories of the year.
Some dogs have been at the Battersea Dogs and Cats Home for more than a year. Can you make their Christmas and give them a new home?