Rising problems with impaired loans in its Australian operations hurt the third-quarter performance of Lloyds Banking Group PLC, the bank reported on Tuesday. Many of the problem loans appear to be associated with commercial real estate in rural and regional Australia. Lloyds said, in its third quarter management statement, that Australian and Irish impairments for the second half of 2010 would keep second-half impairments in its wealth and international division to similar levels as the first half. As reported in Banking Day, Lloyds' half-year report detailed problems with its Australian operations. The bank does not yet appear to be getting on top of those problems. "In Australia, while we observe a generally robust economy, there are significant geographical and sector variations and property-related assets situated outside the principal metropolitan areas have been particularly weak," Lloyds said. "As outlined at the half year, we have exposure to these areas within our Australian portfolio and this has driven increased impairment levels." The Financial Times said Lloyds had "toned down its optimistic rhetoric" because of the modest progress on impairments and interest margins in the third quarter. Lloyds did not provide profit or revenue numbers for the quarter.