text: Britain's biggest banks earmarked billions of pounds for 'remediation costs' and fines over the last three years . Britain's biggest banks have racked up a £39billion bill in just three years to pay for their financial scandals. ‘Remediation costs’ wiped out 61 per cent of their profits between 2011 and 2014, according to accountants KPMG. The bill has been driven by the payment protection insurance scandal, with banks setting aside £4.7billion last year to compensate customers. Another £2.3billion was earmarked by banks including Barclays, Royal Bank of Scotland and HSBC to pay fines for rigging foreign exchange markets. The total charge for wrongdoing last year – £9.9billion – was only 8 per cent less than the previous year. Describing it as a ‘problem that won’t go away’, KPMG said banks also face mounting costs from employing an army of compliance staff to keep them out of trouble. RBS is thought to be facing a multibillion-pound settlement in the US for mis-selling toxic bundles of mortgage debt – known as mortgage-backed securities – in the run up to the financial crisis. Barclays is also braced for a huge fine for rigging foreign exchange rates, having put aside £1.25billion so far to cover the bill. But the UK’s strengthening economy has driven a 72 per cent drop in losses from bad loans, with write-offs falling to £5.2billion last year. RBS was boosted by £1.4billion after not as many loans went sour as it had feared. This compares with an £8.1billion charge in 2013. So-called ‘impairment charges’ at Lloyds fell £2billion to £752million as the improving economy meant fewer retail customers and businesses defaulted on their repayments. Scroll down for video . This translated into a surge in the bottom line, with Lloyds posting a £1.8billion profit, up from £415million in 2013. RBS’s losses narrowed to £3.5billion last year from £8.2billion in 2013. Barclays, HSBC and Standard Chartered all saw profits fall. KPMG said banks must ‘urgently tackle’ their low return on equity – a key measure of shareholder value – and need to invest in technology to increase their profits. Tougher regulations forcing them to hold more capital have made it more expensive for them to do business, especially in higher-risk areas. Banks including RBS and Barclays have responded by shrinking their investment banking arms. KPMG’s Bill Michael said: ‘Banks are undergoing a once in a lifetime change, as they face evolving regulation, technology and society’s expectations … If further regulation creates too many strictures on non-retail banking, the industry risks losing its global relevance.’ KPMG said banks must ‘urgently tackle’ their low return on equity and need to invest in technology to increase their profits.
target: Britain's banks set aside £4.7billion last year in PPI compensation last year .
  Another £2.3billion was earmarked for fines for rigging foreign markets .
  Total charge of wrongdoing last year was £9.9billion, figures revealed .