By Max Colchester

Lloyds Banking Group PLC (LLOY.LN) said Wednesday it was launching a 1 billion pound ($1.4 billion) share buyback alongside a new strategy aimed at making it one of the most cost-efficient banks in Europe.

The British retail bank said that its full-year net profit rose 50% to GBP3 billion, as revenues rose 6% to GBP18.5 billion amid a solid U.K. economy. The results, which set a record for the group, missed analyst estimates.

The bank also presented a new three-year GBP3 billion investment plan to further digitalize the group and cut costs. Lloyds Chief Executive Antonio Horta-Osorio said the "massive undertaking" would help bolster long-term profitability and dividends.

Following its privatization last year, Lloyds has focused on diversifying its business away from mortgages while slashing costs. Like other lenders, it is wrestling with low interest rates and the rise of online competitors. In 2016 Lloyds bolstered its share of the British credit-card market by buying MBNA Ltd from Bank of America Corp. (BAC), while earlier this month it ended a GBP100 billion asset-management mandate with Standard Life Aberdeen as part of its plan to bulk up its asset-management business.

Write to Max Colchester at max.colchester@wsj.com

(END) Dow Jones Newswires

February 21, 2018 04:07 ET (09:07 GMT)

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