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Spanish lender Sabadell (SABE.MC) beat forecasts with third quarter net profit on Thursday, helped by a recovery in lending income, and lower costs and provisions.

For years, banks across Europe have been under pressure from record low interest rates, but that is beginning to change as rising rates are boosting financial margins.

Sabadell, the country’s fourth largest bank in terms of total assets, reported its third-quarter net interest income rose 10% from a year earlier to 965 million euros ($971.27 million), compared with analysts’ forecasts of 917 million euros.

The bank said net profit in the quarter more than doubled to 317 million euros with the help of its savings programme, beating analysts’ 221 million euro forecast.

Against that backdrop, Sabadell raised its net interest income guidance up to a double-digit growth for 2022 from a previous mid-single digit growth forecast.

Smaller rival Unicaja reported a 4.9% rise in net interest income from a year ago in the quarter though it was down 3.6% in the first nine months of the year on lower contribution from cheap European Central Bank funding lines, known as TLTRO.

Its quarterly profit rose 77% to 95 million euros, helped by a rise in net fees.

Though loan-loss provisions at Unicaja fell 30% year-on-year in the quarter, cost of risk, which measures the cost of managing credit, rose to 29 basis points from 27 bps.

At 0837 GMT, Unicaja shares were down around 7% after having risen 8.5% over a month, while Sabadell shares were up 0.5%.

Madrid-based brokerage Renta 4 welcomed Sabadell results, noting also an increase in fees and double-digit growth in lending income and fees in nine-month figures at its British unit TSB.

Overall, mortgage growth in Sabadell’s Spanish business and a solid TSB performance allowed Sabadell to lift its return on tangible equity (ROTE) to around 7.96% from 7.04% as of end-June, already above its three-year strategic plan.

TSB made a positive contribution to parent group’s results for the seventh consecutive quarter, adding 39 million euros in the third quarter, though below the 43 million euros it delivered a year ago.

($1 = 0.9935 euros)