CORRECTED-UPDATE 1-Britain's Lloyds reports Q3 profit beats expectations

(Corrects profit in second paragraph to 2 bln pounds, not 1.6
bln)

LONDON, Oct 28 (Reuters) - Lloyds Banking Group
posted a better than expected profit for the third quarter as
Britain's economy rebounded from pandemic lockdowns, in Chief
Executive Charlie Nunn's first set of earnings at the bellwether
bank.

Britain's biggest mortgage lender posted pretax profits of 2
billion pounds ($2.20 billion) for the July-September period,
compared to 1.3 billion pounds in an average of analyst
forecasts. The lender reported a 1 billion pound profit in the
same period last year.

Like rivals Barclays and HSBC, Lloyds'
results were boosted by the release of a chunk of cash - 84
million pounds - it had set aside for bad loans last year when
the economic outlook looked gloomier.

The bank said that given its strong performance and an
improved outlook for the economy, it was improving its guidance
for this year. The bank now expects loan impairments to be a net
credit for the year, and its return on tangible equity - a key
measure of profitability- to be over 10%.

Nunn, a former HSBC veteran, took the helm at Lloyds in
August, replacing long-standing boss Antonio Horta-Osorio who
left earlier in the year to chair crisis-hit Credit Suisse
.

Nunn inherits a bank placed on an even keel by his
predecessor, but faces a challenge to improve returns amid
near-zero benchmark interest rates and intensifying competition
from digital rivals.

"There are clearly significant opportunities for Lloyds
Banking Group to further develop its platforms and capabilities
and grow," Nunn said.
($1 = 0.7277 pounds)
(Reporting by Iain Withers and Lawrence White
Editing by Rachel Armstrong)