Lloyds Banking Group’s profit has leapt higher as the UK’s biggest mortgage lender continued to benefit from higher borrowing costs.

The banking giant, which also owns Halifax and Bank of Scotland, reported a pre-tax profit of £1.9 billion for the three months to September, up from a revised £576 million this time last year and slightly ahead of analysts’ expectations.

The lender took in £3.4 billion in net interest income, up on the year before.

However, it recorded a slight slowdown in its net interest margin in the latest quarter, compared with the three months to June, as it took in less cash from loans and paid out more to savers.

Lloyds said it had seen a shift in customer deposits, with more people moving cash out of current accounts and into savings, which typically give savers higher returns.

Some £3.2 billion was taken out of current account deposits and £3.9 billion put into savings, the bank revealed.

Group chief executive Charlie Nunn said: “Guided by our purpose, we remain focused on supporting our customers and helping them navigate the uncertain economic environment.

“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.”