Britain\'s state-rescued Lloyds Banking Group on Thursday reported first-quarter net losses of £2.4 billion (2.7 billion euros, $4.0 billion) after being forced to repay clients who were mis-sold insurance. LBG, 41-percent owned by the taxpayer, said it was setting aside £3.2 billion after Britain\'s banks last month lost a high court appeal against moves to tighten regulation of a controversial payments insurance. LBG on Thursday said it was setting aside £3.2 billion to cover payouts to customers who were mis-sold payment protection insurance (PPI). The bank, which on Thursday also reported a first-quarter pretax loss of £3.4 billion, said its losses \"principally\" reflected the £3.2 billion PPI repayment provisions.