Chancellor George Osborne is to sell off bailed-out Lloyds bank even as it continues to spend taxpayers' billions on repaying mis-selling victims.

The banking group confirmed yesterday it had set aside a further £1.8 billion for compensation, bringing total payouts to nearly £10bn over its flogging of useless payment protection insurance policies to customers.

Yet chief executive Antonio Horta-Osorio cheerily went on to project underlying profits of £6.2bn for the past year.