Lloyds Banking Group PLC (LON:LLOY) is write off another huge chunk of debts as it tries to draw a line under the fraud at the HBOS Reading branch.

The high street lender has written to 191 fraud victims this week stating it would increase its debt write-offs following a recommendation by an independent review.

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Last month, Lloyds revealed plans to pay £35,000 to each of the 191 victims for a total of £7mln but the cost of these latest write-offs might run into tens of millions of pounds, Sky News reported today.

The fraud, which occurred between 2002 and 2007, hurt hundreds of struggling small businesses, pushing many into bankruptcy.

The businesses were referred to turnaround consultancy, Quayside Corporate Services, and then loaded with unmanageable amounts of debt before being taken over and asset-stripped.

Six people were jailed in 2017 over the scandal.

Shares dipped 1% to 57.61p on Thursday afternoon.