The London Stock Exchange comfortably beat quarterly revenue forecasts with a 17 percent rise, boosted by interest on short-term loans to Italian banks.

The British exchange reported income of 196 million pounds in the three months to December, its third quarter, compared with a forecast for 181 million.

Treasury income from its Italian clearing house of 33.5 million beat a forecast for 26.6 million.

We have seen a big increase in the volume of transactions we clear and we are looking to optimise the returns we take on margin collateral, chief financial officer Doug Webb said.

The LSE's main capital markets business earned 68.9 million pounds, compared with a forecast of 69.8 million, while its data services group made 52.8 million, versus 44 million from a consensus of analysts.

Its Italian clearing house CC&G, like other clearing providers, offers short-term liquidity to clients and this unit has benefited from increased demand from Italian banks.

(Editing by Erica Billingham and Dan Lalor)