Part-nationalised Lloyds Banking Group today provided further evidence that it was getting its business back on track.
This came despite the fact that it set aside another £1 billion sterling to pay claims for mis-selling payment protection insurance.
The additional provision to compensate customers who bought insurance they did not need raised the bank's estimate of the total cost to £5.3 billion.
Some in the markets had feared that the provision could have been still higher.
News of the additional charge came as the bank, which is 40% owned by British taxpayers, reported a net loss for the three months ending September of £361m.
That was well down on last year's equivalent of £501m.
The bank's pre-tax loss of £144m was down from $607m a year earlier.
Lloyds said its underlying profit - excluding the insurance provision, the cost of disposing of businesses and other items - doubled to £840m.
Analysts said that while the additional below the line provisions are disappointing, and there is a risk of still more to come, they believe the company is making excellent progress in improving performance in the underlying business.
For the first nine months of the year, Lloyds said it had narrowed its net loss by 64% to £1 billion Non-core assets were reduced by £31 billion to £110 billion, ahead of full-year guidance.
"We remain confident that, by delivering our strategy to be a simple, customer-focused UK retail and commercial bank, we can rebuild the trust of our customers and other stakeholders and can deliver sustainable returns for our shareholders over time," said chief executive Antonio Horta-Osorio.
