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Lloyds Banking Group reported third-quarter profit broadly in line with forecasts on Wednesday, as a revenue boost from higher interest rates was counterbalanced by competitive pressure on margins and flagging lending demand.
Britain's biggest mortgage lender reported pre-tax profit of 1.9 billion pounds ($2.3 billion) for the three months to September 30, up from 576 million pounds the previous year and marginally above the 1.8 billion expected by analysts in forecasts compiled by the bank.
Most British banks have reported a run of strong profits as higher rates have lifted lending revenue. But investor concerns about tougher competition for savers' cash and potential loan defaults in a cost of living crisis have weighed on the sector.
Barclays shares closed down 7% on Tuesday after it downgraded its margin forecast for the year and hinted at big cost-cutting plans to come.
Lloyds in contrast reaffirmed its performance guidance for the year and said it expected asset quality to be slightly better than forecast, at less than 30 basis points as opposed to around that level.
The bank did not make any unscheduled announcements on dividends or share buybacks for investors.
Lloyds' net interest margin - a measure of profitability that tracks the difference between what is made on lending and paid out on deposits - came in at 3.08%, down 6 basis points on the prior quarter.
Lloyds' quarterly profit for 2022 was restated lower due to accounting changes, the bank said.
($1 = 0.8218 pounds) (Reporting by Iain Withers and Lawrence White; editing by Jason Neely)