Royal Bank of Scotland today revealed an additional �400 million charge to cover the cost of mis-sold payment protection insurance (PPI) claims, bringing the total bill to �1.7 billion, and said the cost of its recent IT glitch had risen by �50 million to �175 million.

The total mis-sold PPI bill for Britain’s big four lenders has risen to more than �10 billion, with HSBC forecast to post a more modest provision next week.

Fellow state-backed lender Lloyds Banking Group yesterday set aside another �1 billion to cover PPI claims, bringing the total to �5.3 billion, while Barclays announced an additional �700 million, giving it a total of �2 billion.

The additional �50 million provision for the IT fiasco in June will cover customer redress, RBS said, including interest lost and other compensation costs.

The incident is being investigated by an independent external counsel with the assistance of third party advisers.

Chief executive Stephen Hester said its five-year restructuring plan is now in its later stages and is being worked through successfully.

He added: “We have already made much progress, though clearly not enough, and our reputation will take time to recover from past events which are still being accounted for.”

The additional provisions overshadowed underlying progress at the bank.

The group’s core businesses - what will become the “new” bank - saw operating profits rise 67% year-on-year in the third quarter to �1.6 billion.

The non-core assets fell by a further �7 billion to �65 billion in the quarter and have been reduced by 75% to date, while its bad-debt losses fell by �159 million from the previous quarter to �1.2 billion.

Staff costs were 5% lower than in the second quarter at �1.9 billion, with headcount down by 9,900 or 7% from a year earlier.

The group cleared two major milestones in the period, floating its insurance arm Direct Line Group in October, raising �911 million from the sale of a 34.7% stake, and it exited from the Government’s Asset Protection Scheme.

However, the bank did see an expected branch sale to Santander collapse in the quarter, which it said was “disappointing”. It has restarted efforts to sell the business.