Barclays has set aside a further £700m to cover Payment Protection Insurance (PPI) claims, after experiencing higher than expected claim volumes since the end of June.
It takes its overall provision to £2bn from £1.3bn. UK banks have set aside more than £10bn to cover claims relating to the mis-selling of PPI.
PPI policies were typically taken out to cover payments on a loan or credit card if the customer were unable to pay, but many were mis-sold.
Barclays, which announces its third quarter results on 31 October, said it expects profits over the quarter excluding PPI provision to be in line with market expectations.