It said that during the nine months it spent £3.2bn covering PPI claims and also that total income for the period also fell 15% to £15.3bn indicating a decline in business levels.
However in Q3 2011 Lloyds group carried out £8.1bn of gross mortgage lending, up from £7.1bn the previous quarter.
The group claims it had over 20% gross residential mortgage lending market share over the first nine months of 2011 and supported almost 40,000 first-time buyers.
Lloyds said the figures in its interim report came against a backdrop of a weakening UK economic environment.
The report comes six days after Lloyds chief executive António Horta-Osório took temporary leave due to stress and Tim Tookey, group finance director was appointed as interim group chief executive.
Tookey said: “Although the UK economic environment has weakened in the third quarter, the flexibility in our strategic plan has allowed us to further improve our customer propositions, continue the reduction our risk profile, strengthen our balance sheet and reduce costs.
“Over time, we believe our strategy will realise the full potential of our organisation for our customers and shareholders.”
