LONDON — The Lloyds Banking Group said on Tuesday that it would eliminate 9,000 jobs and close up to 150 branches over the next three years in a digital push as more customers conduct their banking online or by mobile phone.
The move is the latest step by António Horta-Osório, the chief executive of Lloyds, in his continuing transformation of the bank. He joined Lloyds three years ago from Banco Santander, a Spanish bank that in recent years has become a formidable challenger to Lloyds and other large lenders in Britain.
The announcement came as Lloyds, which is owned in part by the British government as a result of a bailout during the financial crisis, reported that its third-quarter underlying profit rose 42 percent, to 2.16 billion pounds, or about $3.5 billion.
The bank, which operates more than 2,000 branches in Britain, said it planned to invest £1 billion to improve its digital technology over the next three years.
It also plans to reduce its branch network by about 6 percent and to eliminate 9,000 full-time jobs by the end of 2017. News of the job cuts, which represent about 10 percent of the bank’s work force, emerged last week.
Mr. Horta-Osório said Lloyds expected to close branches at a slower rate than its competitors and expand its market share, in terms of branches in Britain, during the next three years.
Most customers of its Lloyds and Bank of Scotland brands will still have a branch within five miles of their home after the closings, the bank said.
“We want to create a simpler, more agile business that can more rapidly adjust to customer needs,” Mr. Horta-Osório said on a conference call with reporters.
Lloyds said it saw opportunities to expand its commercial banking, financial planning and retirement services businesses. The bank said it also expected to make an additional £30 billion of loans to businesses and retail customers over the next three years.
The reshaping comes at a pivotal time for Lloyds and for the British banking sector.
The lending market has been dominated in Britain by four banks: Lloyds, Barclays, the Royal Bank of Scotland and HSBC.
But those lenders, with vast branch networks, are facing pressure as more customers conduct their financial lives exclusively online and European regulators seek to open Britain to a wider number of competitors.
As part of the conditions of their government bailouts, Lloyds and R.B.S. are both spinning off hundreds of branches into new, smaller stand-alone banks.
In June, Lloyds shed 631 branches through it initial public offering of the TSB Banking Group, and it plans to completely divest itself of its TSB holdings by the end of 2015. With about 4.5 million retail customers, TSB is the seventh-largest retail bank in Britain.
Lloyds has seen its prospects improve in recent years as it seeks to reduce the British government’s role in its business.
In 2009, Lloyds was forced to accept a £17 billion government bailout after an ill-timed acquisition of the mortgage lender HBOS, the operator of Halifax and Bank of Scotland, as the financial crisis hit.
But Lloyds has aggressively trimmed its costs – eliminating more than 40,000 jobs since 2008, not including this latest round – and returned to profitability more quickly than many of its bailed out competitors.
As a result of its improving prospects, the British government has been able to reduce its stake in Lloyds at a profit. It continues to own about 25 percent of the lender.
Lloyds is in discussions with regulators and hopes to resume paying a dividend to investors next year.
The bank said underlying profit, which excludes asset sales and some costs, rose to £2.16 billion from £1.52 billion in the third quarter of 2013. The result exceeded analysts’ expectations.
Lloyds posted a pretax statutory profit of £751 million, an important measure for the bank.
Net interest income — the measure of what a bank earns on its lending after deducting what it pays out on deposits and other liabilities — rose 9.9 percent, to £3.03 billion, from £2.76 billion in the period a year earlier. The bank’s costs declined 5.5 percent, to £2.23 billion.
Lloyds also set aside £900 million for potential compensation of customers who were improperly sold payment protection insurance, a product that has cost British banks billions of pounds to make restitution. That amount is on top of the £600 million it set aside for payment protection insurance claims in the first half of the year.
In total, Lloyds has set aside about £11 billion for the claims.
In the first nine months of the year, net income rose to £1.39 billion from £280 million in the period a year earlier. Taxes reduced its nine-month results by £1.41 billion in 2013.
The bank’s core Tier 1 capital ratio, a measure of its ability to weather financial disturbances, rose to 12 percent at the end of September from 10.3 percent at the end of 2013.
European banks are required to have a minimum of 4 percent common equity Tier 1 capital under European rules, but larger banks are required to maintain a higher minimum capital level, which is set by their local regulators.