LONDON -- The shares of Royal Bank of Scotland (LSE: RBS.L) (NYSE: RBS) gained 1 pence to 288 pence during early London trade this morning after the bank disclosed its bill for mis-selling payment protection insurance (PPI) had increased by a further 400 million pounds.

The additional cost hurt the FTSE 100 (UKX) member's third-quarter figures, which showed a total loss of 1.3 billion pounds for July, August, and September. Today's PPI charge takes RBS' total mis-selling provision to 1.7 billion pounds.

Earlier this week, Barclays and Lloyds Banking set aside a further 700 million pounds and 1 billion pounds respectively for PPI compensation.

Excluding PPI costs, one-off items, and restructuring expenditure, RBS claimed its underlying "core" Q3 profits jumped 66% to 1.6 billion pounds and nine-month profits had remained flat at 4.8 billion pounds.

What's more, the bank did not provide any nasty surprises with its outlook, with the fourth quarter likely to experience the same "external economic, market and regulatory challenges." The group expects its restructuring plan to be "substantially completed" within the next 15 to 18 months, too.

Stephen Hester, the chief executive of RBS, said this morning:

The RBS restructuring programme continues to make excellent progress as we take the action needed to make the bank safer and stronger. Our funding and capital position has been transformed, we have repaid all emergency loans from the Government and central banks, and we recently exited the Asset Protection Scheme without ever making a claim.

Prior to today, City experts reckoned RBS' adjusted earnings for 2012 would be around 15 pence per share -- putting the shares on a P/E of about 19. While no dividend is expected this year, the bank's 476 pence per share net tangible asset value supports a price to book ratio of 0.61.

Whether RBS is a buy based on today's Q3 statement, those ratings, and the general outlook for the banking sector remains your decision.

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