(Bloomberg) -- Barclays Plc lost as much as $2.7 billion in market value on Tuesday after inaugurating the reporting season for UK banks by lowering its forecast for lending profitability.

The shares dropped as much as 10%, before paring losses in the last hour of trading. The London-based bank reduced its full-year net interest margin estimates as UK banks compete for deposits by offering savers higher rates of interest.

“The net interest margin disappointment today explains the share price reaction,” Citigroup Inc. analyst Andrew Coombs said in a note. “A lot of bad news is already priced in.”

Read: Barclays Shares Drop 10% as UK Outlook Disappoints: Street Wrap

Barclays closed down 6.5% at 134.64 pence, the steepest one-day drop since March.

The update comes ahead of reports from rivals Lloyds Banking Group Plc and NatWest Group Plc on Wednesday and Friday, respectively. HSBC Holdings Plc reports on Monday.

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