This included a loss of £607m in the third quarter of 2011.
The group, which is 41 per cent owned by the Government, includes Institute of Financial Planning sponsors Scottish Widows Investment Partnership and Scottish Widows as well as Halifax Bank of Scotland.
It said the cause of the loss was the £3.2bn spent covering PPI claims earlier this year as well as a subdued UK economic environment.
The results compare with a £2bn profit at the same time last year. The firm said its medium-term targets were unlikely to be met until 2014 if weaker economic conditions persisted.
It said it had expected there to be an interest rate rise by the end of this year but that this was now unlikely to be until next year. This makes it difficult for the Group to make a profit on its savings accounts.
Tim Tookey, interim group chief executive and group finance director, said: “Although the UK economic environment has weakened in the third quarter, the flexibility in our strategic plan has allowed us to further improve our customer propositions, continue the reduction in our risk profile, strengthen our balance sheet and reduce costs.
“Over time, we believe our strategy will realise the full potential of our organisation for customers and for shareholders.”
Group chief executive Antonio Horta-Osorio is temporarily absent from the firm due to ill-health but is expected to return in December while Mr Tookey will be leaving the Group in February to join insurer Resolution.