By Max Colchester

LONDON-- Lloyds Banking Group PLC said that profit sank in the third quarter, as the bank put aside more cash to compensate customers who were sold insurance product they didn't need.

Profit fell 68% to GBP219 million ($266.39 million) in the quarter while revenue was GBP4.28 billion, up 1% compared with a year earlier.

The bank put aside an extra GBP1 billion to compensate customers who were sold insurance products they didn't need. U.K. regulators have proposed to cap the compensation for Payment Protection Insurance in 2019, later than Lloyds thought.

The bank reaffirmed its 2016 financial guidance. Chief Executive António Horta-Osório said the U.K. economic outlook remained uncertain, "however the strength of the recovery in recent years means the U.K. is well positioned"

The U.K. government announced earlier this month that it will restart the privatization of Lloyds by drip selling its 9.1% stake into the market.

Write to Max Colchester at max.colchester@wsj.com

(END) Dow Jones Newswires

October 26, 2016 02:38 ET (06:38 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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