The British banking group is taking its cost-cutting plans up a notch.

London-headquartered Lloyds Banking Group will cut an additional 3,000 jobs and close a further 200 branches by the end of 2017.

Lloyds revealed in its half-year results that it had increased its run-rate savings target from £1 billion ($1.3 billion) to £1.4 billion by the end of next year. It is also targeting a 30 per cent reduction in its non-branch property portfolio by the end of 2018. 

The group had already announced cost-cutting measures, involving 9,000 redundancies and 200 branch closures, in 2014. It attributed the acceleration of its “simplification programme” to changing customer behaviours and the expected extended low interest rate environment following June's Brexit vote.

For the first half of 2016, Lloyds more than doubled its statutory pre-tax profit year-on-year to £2.5 billion. Although the group saw a 3 per cent reduction in operating costs during the period, its total income was 1 per cent lower at £8.9 billion and its underlying profit was 5 per cent lower at £4.2 billion, compared to the same period last year.

Lloyds said the impact on the group of the EU referendum is dependent on economic and political outcomes which remain uncertain. However, it expects to generate around 160 basis points of pre-dividend common equity tier one capital this year, due to the impact of the referendum, particularly the effect of currency rates on risk-weighted assets.

“While the precise impact is dependent upon a number of factors including EU negotiations and political and economic events, a deceleration of growth seems likely. The UK, however, enters this period of uncertainty from a position of strength, following continued private sector deleveraging, significantly improved mortgage affordability and low levels of unemployment,” said group chief executive António Horta-Osório.

“For Lloyds, our simple and low risk, UK focused, retail and commercial business model, together with the simplification and transformation of the business in recent years, position us well to continue doing the right thing for our customers and deliver strong returns for shareholders.”