Bank of Scotland set aside £918 million last year to compensate customers who were wrongly sold Payment Protection Insurance.

The figure compares to a charge of £800m in the previous year and £2.2 billion in 2014 for the Lloyds group as a whole.

Newly-filed accounts show that during 2014 customer initiated complaints continued to fall, “albeit slower than expected”. The notification of customers is now almost complete, it said.

A further £674m was added to the provision in 2014, of which £100m was at the half year; £250m in the third quarter and £324m at the year end which brings the total amount provided to £3.4bn, including anticipated administrative expenses. The total PPI provision for the Lloyds group was £12bn.

The estimates for future claims represent the bank’s best estimate, albeit a number of risks and uncertainties remain, in particular complaint volumes, uphold rates, average redress paid, the scope and cost of proactive mailings and remediation.

Bank of Scotland admits that it may need to make further provisions and notes that an increase of 50,000 complaints from the level assumed would increase the provision for redress costs by £90m.