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Dow Jones Newswires: Lloyds Banking Group profit tumbles 26% over amid impairment charge, challenging economy

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Lloyds Banking Group PLC on Thursday reported a 26% fall in third-quarter pretax profit after booking an impairment charge due to the weakening economic outlook, but raised its interest margin forecast.

The U.K. bank
LLOY,
-0.99%

LYG,
-1.02%

reported a pretax profit of 1.51 billion pounds ($1.76 billion) for the quarter, compared with GBP2.03 billion for the same period a year earlier and a consensus of GBP1.84 billion, taken from the lender’s compiled forecasts.

The bank report booked an impairment charge of GBP668 million compared with a credit of GBP119 million for the comparable period.

Underlying profit–which strips out exceptional and other one-off items–was GBP1.73 billion compared with GBP2.08 billion and a consensus of GBP1.88 billion.

The FTSE 100-listed lender’s underlying net interest income rose to GBP3.39 billion from GBP2.85 billion while its net interest margin–a closely watched metric which measures the difference between interest generated from loans and that paid out for deposits–rose to 2.98% compared with 2.55% and a consensus of 2.90%.

Lloyds said it expects full-year net interest margin to be more than 290 basis points compared with previous guidance for greater than 280 basis points.

The bank ended the period with a common equity Tier 1 ratio–a key measure of balance-sheet strength–at 15% compared with 14.8% at June 30.

Write to Ian Walker at ian.walker@wsj.com

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