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UK complaints over mis-sold loan insurance fall -ombudsman

* H2 2013 PPI complaints fall to 190,000 vs 266,000

* 'Big 4' banks, MBNA, account for 7 out of 10 cases

LONDON, March 4 (Reuters) - Britain's financial ombudsman said the number of complaints it received about the mis-selling of loan insurance by banks and other financial services firms fell in the second half of 2013.

The industry has already set aside over 20 billion pounds ($33.5 billion) to compensate customers mis-sold payment protection insurance (PPI). The policies were meant to protect borrowers against sickness or unemployment but were often sold to those who did not want or need the cover.

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The ombudsman, which deals with cases in which banks and their customers cannot settle a dispute, said it received 190,000 complaints about PPI in the second half of 2013, compared with 266,000 in the first half.

But Chief Ombudsman Tony Boorman said the rate of complaints was still "depressingly high".

"We're still a long way from being able to say that PPI is sorted once and for all. Over 1,000 people every day are still asking us to sort out PPI problems that they've not been able to resolve directly with their bank," he said.

The ombudsman said it took on a record 576,000 new cases in total in 2013, up a third on the previous year. It found in favour of consumers in 51 percent of overall cases in the second half and in 56 percent of cases relating to PPI.

The ombudsman said five financial services groups - RBS (LSE: RBS.L - news) , Lloyds Banking Group, Barclays (LSE: BARC.L - news) , HSBC and Bank of America (TLO: BAC.TI - news) 's MBNA credit card unit - accounted for nearly seven out of ten new PPI cases in the second half.