Aug 28 (Reuters) - TD Bank reported a rise in

third-quarter profit on Thursday, as the Canadian lender built

lower cash reserves to cover potential customer defaults on

loans.

On an adjusted basis, the second largest Canadian bank

reported a profit of C$3.87 billion ($2.80 billion), or C$2.20

per share, for the quarter ended July 31, compared with C$3.65

billion, or C$2.05 per share, a year earlier.

($1 = 1.3817 Canadian dollars)