Barclays has added a further £700 million to its provision for payment protection insurance (PPI) compensation, taking the total of its liability to £2 billion.
Barclays, like many other lenders has had to increase its provision as thousands of new claims are arriving at UK banks every month.
Barclays included a provision of £1 billion in 2011 and upped this by £300 million in the first quarter of 2012.
A statement from Barclays said: "Based on claims experience to date and anticipated future volumes, the resulting provision includes Barclays best estimate of expected costs of future PPI redress."
The Financial Ombudsman Service said that it had received more than double the 165,000 of new claims that it had expected in 2012.
Barclays new provision brings the total that UK banks have set aside for the PPI mis-selling scandal to around £10 billion.
Lloyds Banking Group has set aside £4.3 billion, HSBC has included a provision of £1.7 billion in its accounts and the Royal Bank of Scotland has set aside £1.3 billion.
In a high court ruling bought by the Financial Services Authority last year, the high court ruled against the banks and Lloyds decided not to challenge its decision paving the way for a flood of claims from people who were sold the protection, sometimes without knowing what they had been sold and other times when they would be unable to claim on the insurance.
The new provision from Barclays will be included in its third quarter financial statement which will be published on 31st October.
The bank expects its group adjusted profit before tax to be in line with market expectations at £1.7 billion.