Lloyds Banking Group's costs rose 37% in the third quarter. "Lloyds Banking Group Beats Views Despite Car-Loan Provision Hit," 0640 GMT, incorrectly said costs decreased in the first and last paragraphs. The correct version follows:

By Elena Vardon

Lloyds Banking Group reported third-quarter results ahead of analyst expectations despite booking heavier costs as it set aside more money to cover its exposure to a probe into commissions paid on car loans.

The U.K.'s largest mortgage provider said Thursday that its net interest income--the difference between what banks earn on loans and pay out on deposits--for the three-month period came in 7% higher than a year prior at 3.45 billion pounds ($4.61 billion). Including revenue from other sources, total net income increased 7% on year to 4.64 billion pounds. Both figures were slightly ahead of estimates taken from a company-compiled consensus.

Lloyds, like its U.K. peers, has a structural hedge in place to mitigate the impact of interest-rate moves, which allows it to continue to benefit from tailwinds in a lower rate environment. The bank's net interest margin came in at 3.06% compared with 2.95% a year prior.

The main street bank's pretax profit came in at 1.17 billion pounds, representing a 36% on-year drop that still beat expectations of 1.04 billion pounds.

The lower profit was driven by a 37% increase in costs, which included a further 800 million-pound provision to cover potential payouts and administrative costs of compensating customers as part of an industry-wide redress program. Lloyds, as the largest car-finance provider in the country through its Black Horse brand, has earmarked 1.95 billion pounds in total for the matter.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

October 23, 2025 03:00 ET (07:00 GMT)

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