Lloyds Banking Group, which includes Bank of Scotland, Scottish Widows and Halifax, posted statutory profit before tax of £1.86 billion in the third quarter against against £576m for the same period a year earlier.

For the nine month period pre-tax profit rose to £5.7bn against £3.7bn in the prior year.

Revenue came in almost flat at £4.5bn (2022: £4.48bn), boosted by higher interest rates and offset by competitive pressure on margins and flagging lending demand.

Chief executive Charlie Nunn said: “The group continues to perform well. Robust financial performance and strong capital generation in the first nine months of the year was driven by net income growth, cost discipline and resilient asset quality. This performance allows us to reaffirm our 2023 guidance.”

Lloyds guidance contrasts with Barclays which yesterday downgraded its outlook. Lloyds said it expected asset quality to be slightly better than forecast.

Its net interest margin – the difference between what it earns on lending and pays out on deposits – came in at 3.08%, down 6 basis points on the prior quarter.

Zoe Gillespie, investment manager at RBC Brewin Dolphin, said: “After Barclays’ mixed set of results saw a sell-off of banks yesterday, Lloyds’ update should provide some reassurance about the sector’s resilience.

“The group’s performance is in line with expectations, its loan book appears to be relatively stable despite the economic backdrop, and its guidance for the year remains unchanged.

“Bad debt provision is also relatively limited, but profit growth has been held back slightly by subdued demand in the current interest rate environment.

“There are no surprises in today’s update, which should assuage the market, and Lloyds appears to be holding onto cash for any opportunities that emerge in the coming months.”

Lloyds’ shares were down 1.85% (0.75p) at 39.85p in early trade.

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