A Lloyds TSB bank sign is displayed outside a bank branch opposite the Lloyd's Building, the home of the insurance institution Lloyd's of London on Sept. 25, 2008, in London, England.Matt Cardy/Getty Images
State-backed Lloyds Banking Group has once again been named as the most-complained about bank by the Financial Ombudsman Service.
The U.K.'s biggest high-street lender received more than 37,000 complaints in the first half of 2011, up from 22,000 in the previous six months, according to the ombudsman.
The overwhelming majority of the complaints forwarded for resolution concerned the mis-selling of loan insurance, which has received extensive media coverage following the decision by banks to end a legal disagreement with the FSA and honour claims.
Lloyds, the largest provider of payment protection insurance, a form of cover designed to repay loans if the borrower became ill or lost their job, has been the recipient of more complaints than any other bank.
António Horta-Osório, the Portuguese banker who took the helm of Lloyds this year, was the first CEO to announce that the bank would settle claims related to PPI.
The decision to write off more than £3-billion in order to meet compensation claims left the bank with a £3.5-billion pre-tax loss in its first half results.
However, it claimed that it had improved customer relations in other areas and had reduced the number of complaints made to the regulator regarding credit and debt products, excluding PPI.
A spokesperson for Lloyds said: "We are pleased to have made progress in the vast majority of complaint categories; reducing both the number of complaints being referred to the FOS and decreasing the number of decisions being overturned. It is clear we have more work to do and we expect our progress in the first half of 2011 to continue into the second half of the year."
Complaints made by customers about RBS, Barclays and HSBC also rose sharply on the bank of PPI disagreements.
The overall number of complaints received between January and July rose by more than 50 per cent on the previous six months to 149,925.
However, when complaints related to PPI, which account for about 99,000 of all new cases, are excluded, the results show that some improvement has been made in banking customer service.
The volume of complaints concerning credit cards, alternative insurance products and mortgages have either reached a plateau or fallen.
Those customers who have complained have received fewer positive resolutions, with the number of cases found in favour of consumers falling from 53 per cent to 47 per cent this year.
The ombudsman attributed the fall to the difficulty it has had engaging with providers.
"This period coincided with the time when most of the high street banks and some other financial businesses had put PPI complaints on hold, because of their legal challenge against the ombudsman service and FSA," said Natalie Ceeney, chief executive and chief ombudsman.
"As a result, complaints in this period about PPI were harder fought, and harder to resolve - particularly if we found in favour of a consumer."
The ombudsman expects to see the number of new cases related to PPI continue to rise now that banks have re-opened the cases that were on hold.