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 remediation and uphold rates”.
Total PPI provisions now stand at £11.3bn, of which £2.6bn is unutilised, the bank said.
Group chief executive Antonio Horta Osario said: “In UK housing, we continue to be the largest lender to first-time buyers, providing one in four mortgages, and lending £8.8bn to more than 67,000 first-time buyers in the first nine months.”
On commercial lending, he said the bank has supported over 75,000 business start ups and from the Funding for Lending scheme has committed more than £11.5bn of gross funds in 2014.
Total loans and advances to customers were £486.3bn at
30 September 2014, 2% lower than at 31 December
2013, but he added there is ‘continued growth in mortgages.’
Meanwhile, 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.
