Image caption The government owns 41% of Lloyds Banking Group

Lloyds Banking Group is to cut 650 jobs in the UK.

Insurance and back office-based staff in Nottingham and Chester would be hardest hit, the bank said.

It will also close its network of Halifax-branded agencies, largely based in solicitors and estate agencies, as they are "no longer integral to its business model".

This will hit more workers, who are not employed directly by Lloyds. Unions said 1,850 jobs would be affected.

"The scale of this cuts is extreme, the bank's recovery plans are already well on course to deliver 30% higher than forecast savings," said Cath Speight, national officer at the Unite union.

Lloyds bought the Halifax business as part of its rescue of HBOS in 2008.

The group, which is 41% state-owned, has forecast that it would make a profit this year, despite making an operating loss of £6.3bn on bad loans in 2009.

Lloyds also said it had struck a deal to allow Halifax customers to pay in cash and cheques at the 12,000 Post Office branches.

The 265-strong network of Halifax agencies compares with the 475 that operated in 2005.