Barclays' complaints fall by a quarter in second half of 2013

* Total (NYSE: TOT - news) complaints down 26 pct to 317,000

* PPI complaints down 24 pct to 225,000

LONDON, Feb 20 (Reuters) - Customer complaints at Barclays (Berlin: BCY.BE - news) fell by a quarter in the second half of 2013, the bank said on Thursday, reflecting a decline in cases relating to the mis-selling of loan insurance.

The bank said that total complaints fell by 26 percent year on year, dropping to 317,000, while complaints about payment protection insurance (PPI) were down 24 percent to 225,000.

The data will raise hopes that complaints about PPI mis-selling, Britain's costliest consumer scandal, may have peaked. Barclays (LSE: BARC.L - news) has so far set aside 3.95 billion pounds ($6.6 billion) to compensate customers.

The policies were supposed to protect borrowers against sickness or redundancy but were often sold to those who would not be eligible to claim.

Total complaints excluding PPI were down 31 percent to 92,000 and Barclays Retail Chief Executive Ashok Vaswani described the decline as encouraging.

"We recognise that we still have a way to go, even one complaint is too many," he said.