Royal Bank of Scotland (RBS) registered a £392 million profit in the third quarter.
This compares to a £469 million loss in the corresponding period of the previous year.
It is the second time since 2008 the bank has registered three successive quarters of profit and means the state-owned lender has made profit of £1.3 billion in the year to date.
RBS said that it had taken out £708 million through its simplification programme, designed to reduce the size of the business.
Conduct litigation costs for the quarter stood at £125 million, while the bank said it had not made any further provisions for payment protection insurance mis-selling.
While the bank expects to be profitable this year, it could be hit by a multi-billion dollar fine by the US Department of Justice in the fourth quarter over the sale of toxic mortgage-backed bonds between 2008 and 2013.
Should the fine land in the final three months of the year, RBS faces the prospect of its 10th successive year in the red.
'RBS faces the indignity of suffering a tenth year without a profit, though this really all depends on the timing and size of the fine that’s coming from the US Department of Justice,' Hargreaves Lansdown's senior analyst Laith Khalaf said.
'The fact the bank has said it expects to be profitable next year suggests RBS is bracing for a pretty imminent rap on the knuckles.'
Khalaf also highlighted the wider implications of the fine.
'The large and unpredictable nature of this liability looms large over RBS, and could hamper its ability to pass the Bank of England’s 2017 stress test.'
The bank has already agreed to pay more than $44 million and enter a non-prosecution agreement to settle a US DoJ criminal probe on a different matter.
Also this year it paid £4.2 billion to the US Federal Housing Finance Agency to settle claims over the sale of the mortgage-backed securities.
At 9.20am shares in RBS were up 1% at 283.9p.