Lloyds Banking Group has set aside an extra £900m in payment protection insurance (PPI) provisions and confirmed it will cut 9,000 jobs as part of a switch from high street to digital banking.
Reporting pre-tax profits of £1.6bn for the nine months to 30 September, the state-backed lender said 9,000 jobs will go and a net 150 branches will be closed by 2017 as it invests £1bn in digital products and services.
While the profit figure is down 5% year-on-year, a £751m three-month figure does reverse a pre-tax loss of £440m sustained in the same quarter last year.
However, Lloyds is increasing its PPI provision by more than analysts expected due to "increased reactive complaints and expected increased remediation and uphold rates".
Total PPI provisions now stand at £11.3bn, of which £2.6bn is unutilised, the bank said.
Having only narrowly passed European regulators' bank stress tests on Sunday - a result some say may inhibit its plans to return to the dividend register this year - Lloyds simply confirmed this morning it is still in "ongoing discussions" with the UK's Prudential Regulation Authority" (PRA) over resuming payouts.
The results of the PRA's own stress tests will be revealed on 16 December, but Lloyds said differences in methodology make comparisons with the European Banking Authority's test difficult.
Setting out new strategy targets for 2017, the bank said it will target a cost/income ratio of around 45% by that year, as well as sustainable returns on equity of around 13.5%-15%.
Lloyds will invest £1.6bn over the next three years to "simplify processes and increase automation" as part of a drive to achieve £1bn in annual savings by 2017.
It also reaffirmed plans to boost its offering for mass affluent and wealth customers, as well as increasing its presence in London and the South East.
Having dropped 1.8% yesterday following the stress test results, Lloyds opened down a further 1.5% at 74.25p this morning.
