A further improvement in credit quality at Lloyds (LLOY) - its bad debt charge fell 59 per cent in the nine months to end-September - helped underlying profit rise 35 per cent to £5.97bn. Management have updated strategic targets, too. These include aiming for a 13.5-15 per cent return on equity and a cost-to-income ratio of 45 per cent by 2017. To support that latter objective the bank announced plans to axe 9,000 jobs.
But the bank also revealed a further £900m hike in its PPI redress provisions, bringing its cumulative total to a painful £11.3bn. Unexpectedly, the lender only just scraped through EU-wide stress-testing, too. Its capital ratio - calculated to reflect a range of adverse economic and financial assumptions - came in at just 6.2 per cent, not far above the 5.5 per cent regulatory threshold. That near miss casts doubts over whether Lloyds can return to the dividend list in the near term.