(Adds detail from conference call, share reaction)
MOSCOW, Nov 30 (Reuters) - Russian consumer lender TCS Group expects to increase its profit next year as it lends more and its funding costs fall, it said on Wednesday, after posting record profit for the third quarter in a row.
TCS made net profit of 2.9 billion roubles ($44.6 million) in the third three months of 2016, beating analysts' forecasts and reiterating that it was on track for profit of 9-10 billion roubles this year.
In 2017 it expects to make 13-14 billion roubles of profit, while return on equity is seen at 35-40 percent, broadly in line with this year.
Oliver Hughes, chief executive of Tinkoff Bank, one of TCS' businesses, said profit growth next year would be mainly driven by the group's lucrative credit card business.
Other business areas, such as servicing small and medium enterprises, should break even next year after investments made in previous years, while insurance products should bring in more money, Hughes added on a conference call.
TCS also said on Wednesday it had approved a second interim dividend for 2016 of 21 cents per share, following an announcement in May of a first interim dividend of 17 cents per share.
The lender's London-listed shares rose in early trade before falling back to trade 0.8 percent lower by 0903 GMT.
Analysts had forecast TCS would make third-quarter profit of 2.7 billion roubles, versus 0.7 billion roubles in the third quarter of 2015.
$1 = 65.0180 roubles Reporting by Alexander Winning; Editing by Andrew Osborn and Louise Heavens