REG - Lloyds Bank CorpMkts Lloyds Banking Group - 2025 Half-Year Results
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RNS Number : 1855T Lloyds Bank Corporate Markets PLC 30 July 2025
Lloyds Bank Corporate Markets plc
2025 Half-Year Results
CONTENTS
Financial review 1
Principal risks and uncertainties 6
Statutory information
Condensed consolidated half-year financial statements (unaudited) 8
Condensed consolidated income statement (unaudited) 9
Condensed consolidated statement of comprehensive income (unaudited) 10
Condensed consolidated balance sheet (unaudited) 11
Condensed consolidated statement of changes in equity (unaudited) 12
Condensed consolidated cash flow statement (unaudited) 14
Notes to the condensed consolidated half-year financial statements (unaudited) 15
Statement of directors' responsibilities 31
Independent review report to Lloyds Bank Corporate Markets plc 32
Forward-looking statements 34
Contacts 36
Definitions
Lloyds Bank Corporate Markets plc (the Bank) and its subsidiary undertakings
(together the Group). References within this document to LBCM refer to the
Group as defined here. Lloyds and Lloyds Bank are trading names of Lloyds Bank
Corporate Markets plc. Lloyds Banking Group plc is the ultimate parent company
of LBCM and is also referred to as LBG in this document.
Connecting the UK and Lloyds Banking Group with the world
LBCM's purpose is Helping Britain Prosper
HALF-YEAR STRATEGIC PROGRESS
In the first 6 months of 2025, Lloyds Bank Corporate Markets group (LBCM) has
delivered a solid financial performance from a business that's delivering for
our customers. This is pleasing when set against the backdrop of a volatile
macroeconomic and geopolitical environment and demonstrates continued business
momentum and growth enabled by our strategic investment.
Total income was £513 million in the period (half-year to 30 June 2024: £529
million) and profit before tax was £266 million (half-year to 30 June 2024:
£293 million). This includes the one-off charge relating to our capital
restructure and is a key milestone in the growth plan of LBCM which unlocks
capacity for further growth opportunities.
Our Strategy
Guided by our purpose of Helping Britain Prosper, LBCM has a well-defined
strategy of investing in both our markets and international businesses which
is driving sustainable income growth and returns. Core to this strategy is
deepening client relationships, expanding our institutional coverage and
driving collaboration opportunities across LBG.
Global Markets
We are expanding our global financial markets client proposition
and scaling our global capital markets franchise.
These businesses continued to expand their client offerings in 2025, with a
market share increase of 8 percentage points year-on-year in Structured
Finance and 3 percentage points in UK issuer Debt Capital markets issuance.(1)
This is supported by good performance in USD and EUR debt issuances. In
financial markets we achieved our strategic objective of continuing to be
ranked in the top 5 for sterling interest rate swaps.
We have launched a market-leading foreign exchange algorithmic execution
service, further enhancing our client toolkit. LBCM also executed the first
tokenised collateral transfer on a public blockchain, paving the way for the
use of digital technology in the industry.
(1) LSEG Workspace; Structured Finance (excluding collateralised debt
obligations) - sterling, All Investment Grade bonds (excluding Sovereign,
supranational and agency) - UK issuers (sterling only)
International
We are strengthening our presence in North America and Europe,
and digitising and growing our Crown Dependencies business.
In 2025 we have developed our core franchise and support to global clients
through our international hubs in the Crown Dependencies, New York and
Frankfurt. Ongoing multi-year investment into our technology in the Crown
Dependencies business has improved the client offering and operational
efficiencies, with good momentum in our new cash management and payments
platform.
In North America we are executing our strategic growth objectives, with
increased activity across sponsors lending and project finance whilst growing
our trading capabilities to support coverage expansion and rates proposition
build out. In Frankfurt we continue to support our markets ambition in further
expanding our EUR denominated issuances.
Delivering more for our clients
In June 2025, LBCM restructured its regulatory capital mix increasing the
amount of additional tier 1 capital (refer to page 4 for more details). This
was a key milestone in the growth plan of LBCM which unlocks capacity for
further growth opportunities, enables the expansion of our client offering and
our overall contribution to the Corporate & Institutional Banking (CIB)
business unit of which LBCM is part.
Investment in colleagues has continued including key hires to enable growth.
LBCM and its clients are also benefitting from centralisation of support
activity into centres of excellence and from the ongoing significant
investment into our systems which has further improved core system resilience
and stability.
In supporting LBG's sustainability goals, LBCM helped facilitate a €1.75bn
dual-tranche green bond in the period. We also continue to work across CIB on
the voluntary carbon and nature markets along with the adoption of LBG's clean
growth financing initiative - enabling our clients in the Crown Dependencies
to access discounted financing for eligible green transactions.
LBCM at a glance
LBCM provides a first-class banking, financing and risk management
proposition, underpinned by excellent customer service.
LBCM's diversified business model supports our purpose through connecting
customers (large corporates, financial institutions and commercial and retail
customers in the Crown Dependencies) with a wide range of products including
risk management, commercial lending, community banking, international private
banking, bonds and structured finance, trade and working capital management
and sustainability-linked financing. All served via hubs in the UK, Jersey,
Guernsey, Isle of Man, New York USA and Frankfurt Germany.
REVIEW OF PERFORMANCE
Income statement
For the six months to 30 June 2025, total income was £513 million, down £16 Income statement Half-year to 30 Jun
million versus the first six months of 2024. An increase in net interest
income was offset by reductions in net fee and commission income and net
trading income. Overall, this is a good result when set against the backdrop
of a volatile macroeconomic and geopolitical environment.
Net interest income is up £105 million, or 188%, versus the first half of
2024 driven by growth in our financial sponsors lending business combined with
a reduction in funding costs for our global markets business. In addition we
have seen benefits from our structural hedge as maturing balances are
reinvested in a higher rate environment.
2024 Movement £m
2025 £m
£m
Net interest income 161 56 105
Net fee and commission income 138 153 (15)
Net trading income 256 322 (66)
Other operating losses (42) (2) (40)
Total income 513 529 (16)
Operating expenses (246) (250) 4
Impairment (charge)/credit (1) 14 (15)
Profit before tax 266 293 (27)
Tax expense (56) (62) 6
Profit for the period 210 231 (21)
Net trading income from our global markets businesses has been resilient in
2025 against the backdrop of volatile international markets resulting in net
trading income of £256 million as at 30 June 2025. The overall underlying
business performance has remained good, noting that banking volatility/foreign
exchange charges were higher in 2025 versus 2024; plus there was a one-off
gain recognised in 2024 not repeated in 2025.
Net fee and commission income has remained strong in a competitive
environment, generating £138 million in the period driven mainly by debt and
bond issuances and fee income from our lending portfolio. Other operating
losses in 2025 relate to a one off charge from the regulatory capital
restructure.
LBCM has continued to demonstrate strong cost management discipline resulting
in a small year on year reduction in operating expenses of £4 million to
£246 million in the first 6 months. The impairment charge of £1 million
reflects minor movements in our stages 1 and 2, as improving macroeconomic
conditions offset the impact of growth in the lending portfolio.
A tax expense of £56 million was recorded which is analysed in note 5.
Balance sheet assets
Total assets were £97,457 million at 30 June 2025, an increase of
£2,485 million since 31 December 2024.
Balance sheet assets As at Total asset growth is driven by an increase in financial assets at fair value
through profit or loss (growth in our gilts business) plus an increase in
financial assets at amortised cost as we have grown our financial sponsors
lending portfolio. Financial assets at amortised cost includes loans and
advances to banks of £1,625 million, loans and advances to customers of
£18,747 million and reverse repurchase agreements of £6,100 million.
30 Jun 31 Dec Movement
2025 2024 £m
£m £m
Cash and balances at central banks 19,122 20,308 (1,186)
Financial assets at fair value through profit or loss 27,192 25,765 1,427
Derivative financial instruments 21,901 22,416 (515)
Financial assets at amortised cost 27,180 25,056 2,124
Other assets 2,062 1,427 635
Total assets 97,457 94,972 2,485
This is offset by a small reduction in our derivative financial instruments
due to changes in the fair value of foreign exchange and interest rate
contracts, and a reduction in cash and balances at central banks (being
balances on deposit at the Bank of England and US Federal Reserve) reflecting
evolution of our liquid asset portfolio. The increase in other assets relates
to trading settlement balances falling due over the half year.
REVIEW OF PERFORMANCE (continued)
Balance sheet liabilities
Total liabilities were £90,056 million at 30 June 2025, compared to £91,143
million at 31 December 2024.
Total deposits have increased by £373 million in line with LBCM's strategy to Balance sheet liabilities As at
grow deposits.
Financial liabilities at fair value through profit or loss increased due to an
increase in repurchase agreements while derivative financial instruments
reduced, due to movements in fair value.
Debt securities in issue at amortised cost reduced by £2,711 million due to
repayment in full of all senior MREL funding of £2,725 million, as part of
the regulatory capital restructure which took place in the period. The
remaining balance in this line relates to commercial paper, certificates of
deposit and Euro Medium Term Notes.
30 Jun 31 Dec Movement
2025 2024 £m
£m £m
Total deposits 33,963 33,590 373
Due to fellow LBG undertakings 1,199 1,512 (313)
Financial liabilities at fair value through profit or loss 24,896 22,981 1,915
Derivative financial instruments 15,641 16,588 (947)
Debt securities in issue at amortised cost 12,379 15,090 (2,711)
Other liabilities 1,978 636 1,342
Subordinated liabilities - 746 (746)
Total liabilities 90,056 91,143 (1,087)
Subordinated liabilities was the Bank's tier 2 capital which has been repaid
in full in the period as part of the regulatory capital restructure. The
movement in other liabilities relates to trading settlement balances falling
due over the half year.
Balance sheet equity
Total equity at 30 June 2025 was £7,401 million (31 December 2024: £3,829
million).
Equity As at Total equity in the period increased by £3,572 million. In addition to
profits in the period increasing retained profits, there was a £3,337 million
increase in other equity instruments as a result of the issuance of new
additional tier 1 capital as part of the regulatory capital restructure.
The movement in other reserves relates to the to the cash flow hedge reserve
representing fair value movements on the structural hedge.
30 Jun 31 Dec Movement
2025 2024 £m
£m £m
Share capital 370 370 -
Other reserves (180) (236) 56
Retained profits 3,066 2,887 179
Ordinary shareholders' equity 3,256 3,021 235
Other equity instruments 4,145 808 3,337
Total equity 7,401 3,829 3,572
Regulatory capital
The capital position of Lloyds Bank Corporate Markets plc is presented on an
unconsolidated basis.
The Bank's common equity tier 1 (CET1) capital ratio reduced to 13.3% Regulatory capital As at
(31 December 2024: 13.6%), with profit for the period more than offset by the
increase in risk-weighted assets (RWAs).
RWAs increased by £1,814 million to £22,419 million largely reflecting
lending growth and increases in counterparty credit risk partially offset by a
reduction in market risk.
30 Jun 31 Dec Movement
2025 2024 £m
£m £m
Common equity tier 1 capital 2,971 2,797 174
Total tier 1 capital 6,950 3,580 3,370
Total capital resources 6,950 4,171 2,779
Risk-weighted assets 22,419 20,605 1,814
CET1 ratio 13.3 % 13.6 % (0.3) pp
UK leverage ratio 8.2 % 4.5 % 3.7 pp
The Bank's UK leverage ratio increased to 8.2% due to profit for the period
and the increase in additional tier 1 capital, offset by an increase in the
total exposure measure.
REVIEW OF PERFORMANCE (continued)
Capital position
The Bank's capital position as at 30 June 2025 is presented in the table
below.
Capital position At 30 Jun At 31 Dec 2024
2025 £m
£m
Common equity tier 1
Shareholders' equity per unconsolidated balance sheet 3,244 3,019
Cash flow hedging reserve 124 219
Debit valuation adjustment (34) (28)
3,334 3,210
less: deductions from common equity tier 1
Prudent valuation adjustment (126) (130)
Excess of expected losses over impairment provisions and value adjustments (234) (279)
Goodwill and other intangible assets (3) (4)
Common equity tier 1 capital 2,971 2,797
Additional tier 1(1)
Additional tier 1 instruments 4,120 783
Other adjustments (141) -
Total Tier 1 capital 6,950 3,580
Tier 2(1)
Tier 2 instruments - 691
Other adjustments - (100)
Total tier 2 capital - 591
Total capital resources 6,950 4,171
Risk-weighted assets 22,419 20,605
Capital and leverage ratios
Common equity tier 1 capital ratio 13.3 % 13.6 %
Tier 1 capital ratio(1) 31.0 % 17.4 %
Total capital ratio(1) 31.0 % 20.2 %
UK Leverage ratio(1) 8.2 % 4.5 %
(1) A regulatory capital restructuring exercise was undertaken during the
period to 30 June 2025. Further detail can be found in the review of 'Balance
sheet liabilities' and 'Balance sheet equity' on page 4.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks that could impact LBCM's ability to deliver its long-term
strategic objectives and the approach to managing each risk are reviewed and
reported to the Board Risk Committee regularly in alignment with the risk
management framework.
Our risk management framework
Lloyds Banking Group (LBG) is transforming its approach to risk management to
support its strategic ambition and purpose of Helping Britain Prosper. A
detailed review of the three lines of defence model was completed in 2024 to
strengthen accountabilities and accelerate decision-making. Since the
publication of the LBCM 2024 annual accounts this risk transformation has
continued with the delivery of an enhanced risk management framework which
defines a proportionate and materiality-based approach to risk management. The
LBG risk management framework (RMF) applies to all LBG undertakings and has
been adopted by LBCM. The RMF is the foundation for the delivery of effective
and consistent risk control, providing proactive identification, active
management and monitoring of LBCM's risks.
The RMF is supplemented with an LBCM Addendum set out to address LBCM-specific
risk governance. The RMF and the LBCM Addendum applies to the LBCM business
across all legal entities and locations.
LBCM's risk appetite, principles, policies, procedures, controls and reporting
are regularly reviewed and updated to ensure they remain in line with
regulation, law, corporate governance and industry good practice.
The enhanced RMF includes an evolved methodology for setting consistent
board-level risk appetite metrics, providing greater clarity and visibility of
risk appetite. It also enables simplification and efficiency to support LBG
and LBCM in achieving their strategic objectives. Risk appetite is defined as
the type and aggregate level of risk LBCM is willing to take or accept in
pursuit of its strategic objectives and business plan. As a separate legal
group with its own Board, LBCM maintains its own risk appetite which is
aligned to the LBG approach but is adjusted to reflect the specific
characteristics of LBCM's balance sheet and portfolio, including its
international presence. The LBCM Board (the Board) is responsible for the
annual approval of LBCM's risk appetite.
Governance is maintained through delegation of authority from the Board.
Senior executives are supported by a committee-based structure which is
designed to ensure open challenge and enable effective Board engagement and
decision-making. The Board and senior management play a vital role in shaping
and embedding a supportive risk culture. Guided by the Board, the senior
management articulates and role models the core risk values to which LBCM
aspires.
Current thematic and emerging risks
The significant risks encountered by LBCM are detailed below. The external
risks faced by LBCM may also impact the success of delivering against LBCM's
long-term strategic objectives. They include, but are not limited to, the
uncertainties linked to the macroeconomic and geopolitical environment, such
as the conflicts in the Ukraine and Middle East, tariffs and barriers to
trade, inflation, interest rates, and cost of living pressures. These could
also affect the financial condition of LBCM's customers, clients and
counterparties, particularly in vulnerable sectors.
In addition, LBCM continues to monitor and address current thematic risks that
could have an adverse impact on its business model, financial conditions,
operations and its ability to achieve financial targets. These are
interconnected with potential outcomes that should one risk materialise, it
could have an impact on other risks. They include, but are not limited to:
• The pace of technological advances, including failure to adopt and
utilise new technology effectively, evolution of cyber threats, and system,
process and third party disruption
• The evolution of data management and adoption of AI or generative AI,
and the associated risks from a data ethics and data privacy perspective
• The extent and pace of regulatory changes and increased oversight, which
could increase costs and prudential resource requirements for LBCM and result
in changes to LBCM's legal and operating structure and create risks from
non-compliance that include censure, fines and removal of business permissions
to operate. Divergence of UK regulation from other jurisdictions and
operations in international jurisdictions remain a risk of additional
complexity for LBCM
• The ability to create an agile, high performing workforce with high
quality talent in the right locations. Including timely retention of key
skills in LBCM aligned to the evolving industry need
• The effectiveness of proprietary models which are at risk of being
insufficiently predictive due to the limitations of historical data, extreme
market volatility, and the risk of ineffectiveness in parameterisation,
implementation, oversight and monitoring
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Principal risks
LBCM has adopted the LBG event-based risk taxonomy as part of the risk
management framework. There are 10 principal risks which are reviewed and
reported regularly to the Board in alignment with the risk management
framework.
Capital risk - The risk that an insufficient quantity or quality of capital is
held to meet regulatory requirements or to support business strategy, an
inefficient level of capital is held or that capital is inefficiently deployed
across LBCM.
Climate risk - The risk from the impacts of climate change and the transition
to net zero ('inbound risk'), or a result of LBCM's response to tackling
climate change and supporting the transition to net zero ('outbound risk').
LBCM is aligned with LBG, its parent company, with the goal of reducing
emissions financing by more than 50 per cent by 2030 and achieving net zero
financed emissions by 2050 (refer LBG 2025 Half-Year Results and the LBG 2024
sustainability report).
Compliance risk - The risk of financial penalties, regulatory censure,
criminal or civil enforcement action or customer detriment as a result of
failure to identify, assess, correctly interpret, comply with, or manage
regulatory and/or legal requirements.
Conduct risk - The risk of LBCM activities, behaviours, strategy or business
planning, having an adverse impact on outcomes for customers, undermining the
integrity of the market or distort competition, which could lead to regulatory
censure, reputational damage or financial loss.
Credit risk - The risk that parties with whom LBCM has contracted fail to meet
their financial obligations (on and off-balance sheet) leading to financial
loss.
Economic crime risk - The risk that LBCM implements ineffective policies,
systems, processes and controls to prevent, detect and respond to the risk of
fraud and/or financial crime resulting in increased losses, regulatory
censure/fines and/or adverse publicity in the UK or other jurisdictions in
which LBCM operates.
Liquidity risk - The risk that LBCM has insufficient financial resources to
meet its commitments as they fall due or can only secure them at excessive
cost. Funding risk is part of liquidity risk and is defined as the risk that
LBCM does not have sufficiently stable and diverse sources of funding, or the
funding structure is inefficient.
Market risk - The risk that LBCM's capital or earnings profile are adversely
affected by changes in market rates or prices, including but not limited to
interest rates, foreign exchange, equity prices and credit spreads.
Model risk - The risk of adverse consequences from model errors or the
inappropriate use of modelled outputs to inform business decisions.
Operational risk - The risk of actual or potential impact to LBCM (financial
and/or non-financial) resulting from inadequate or failed internal processes,
people, and systems or from external events. Resilience is core to the
management of operational risk within LBCM to ensure that business processes
(including those that are outsourced) can withstand operational risks and can
respond to and meet customer and stakeholder needs when continuity of
operations is compromised.
This includes the provision of services to LBCM (including people, systems and
processes) outsourced to Lloyds Bank plc via a shared service provision model
or by external providers via Lloyds Bank plc. The Shared Service Model creates
internal service provision risk and may be elevated in situations where LBCM's
priorities are not wholly aligned with those of the wider Lloyds Banking
Group.
STATUTORY INFORMATION
Condensed consolidated half-year financial statements (unaudited)
Condensed consolidated income statement (unaudited) 9
Condensed consolidated statement of comprehensive income (unaudited) 10
Condensed consolidated balance sheet (unaudited) 11
Condensed consolidated statement of changes in equity (unaudited) 12
Condensed consolidated cash flow statement (unaudited) 14
Notes to the condensed consolidated half-year financial statements (unaudited)
1 Basis of preparation and accounting policies 15
2 Critical accounting judgements and key sources of estimation uncertainty 16
3 Operating expenses 16
4 Impairment 16
5 Tax 17
6 Fair values of financial assets and liabilities 17
7 Allowance for expected credit losses 23
8 Debt securities in issue 28
9 Dividends on ordinary shares 28
10 Related party transactions 29
11 Contingent liabilities, commitments and guarantees 30
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Note Half-year Half-year
to 30 Jun to 30 Jun
2025 2024
£m £m
Interest income 1,208 1,392
Interest expense (1,047) (1,336)
Net interest income 161 56
Fee and commission income 165 174
Fee and commission expense (27) (21)
Net fee and commission income 138 153
Net trading income 256 322
Other operating losses 10 (42) (2)
Other income 352 473
Total income 513 529
Operating expenses 3 (246) (250)
Impairment (charge) / credit 4 (1) 14
Profit before tax 266 293
Tax expense 5 (56) (62)
Profit for the period 210 231
Profit attributable to ordinary shareholders 175 191
Profit attributable to other equity holders 35 40
Profit for the period 210 231
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Half-year Half-year
to 30 Jun to 30 Jun
2025 2024
£m £m
Profit for the period 210 231
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Movements in cash flow hedging reserve:
Effective portion of changes in fair value taken to other comprehensive income 67 (171)
Net income statement transfers 65 190
Tax (37) (5)
95 14
Movements in foreign currency translation reserve, net of tax
Currency translation differences (tax: £nil) (39) 3
Total other comprehensive income for the period, net of tax 56 17
Total comprehensive income for the period 266 248
Total comprehensive income attributable to ordinary shareholders 231 208
Total comprehensive income attributable to other equity holders 35 40
Total comprehensive income for the period 266 248
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
(
)
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
Note At 30 Jun At 31 Dec
2025 2024
£m £m
Assets
Cash and balances at central banks 19,122 20,308
Financial assets at fair value through profit or loss 6 27,192 25,765
Derivative financial instruments 6 21,901 22,416
Loans and advances to banks 1,625 1,255
Loans and advances to customers 18,747 17,800
Reverse repurchase agreements 6,100 5,332
Debt securities 347 336
Due from fellow Lloyds Banking Group undertakings 361 333
Financial assets at amortised cost 27,180 25,056
Current tax recoverable 5 5
Deferred tax assets 43 80
Other assets 2,014 1,342
Total assets 97,457 94,972
Liabilities
Deposits from banks 1,806 2,645
Customer deposits 32,157 30,945
Due to fellow Lloyds Banking Group undertakings 1,199 1,512
Financial liabilities at fair value through profit or loss 6 24,896 22,981
Derivative financial instruments 6 15,641 16,588
Debt securities in issue at amortised cost 8 12,379 15,090
Other liabilities 1,922 613
Current tax liabilities 42 12
Provisions 14 11
Subordinated liabilities - 746
Total liabilities 90,056 91,143
Equity
Share capital 370 370
Other reserves (180) (236)
Retained profits 3,066 2,887
Ordinary shareholders' equity 3,256 3,021
Other equity instruments 4,145 808
Total equity 7,401 3,829
Total equity and liabilities 97,457 94,972
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Attributable to ordinary shareholders
Share Other Retained Total Other Total
capital reserves profits £m equity £m
£m £m £m instruments
£m
At 1 January 2025 370 (236) 2,887 3,021 808 3,829
Comprehensive income
Profit for the period - - 175 175 35 210
Other comprehensive income
Movements in cash flow hedging reserve, net of tax - 95 - 95 - 95
Movements in foreign currency translation reserve, net of tax - (39) - (39) - (39)
Total other comprehensive income - 56 - 56 - 56
Total comprehensive income(1) - 56 175 231 35 266
Transactions with owners
Distributions on other equity instruments - - - - (35) (35)
Net issuance of other equity instruments - - - - 3,337 3,337
Gain on other equity instruments - - 4 4 - 4
Total transactions with owners - - 4 4 3,302 3,306
At 30 June 2025(2) 370 (180) 3,066 3,256 4,145 7,401
(1) Total comprehensive income attributable to owners of the parent was
£266 million.
(2) Total equity attributable to owners of the parent was £7,401 million.
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) (continued)
Attributable to ordinary shareholders
Share Other Retained Total Other Total
capital reserves profits £m equity £m
£m £m £m instruments
£m
At 1 January 2024 370 (313) 3,011 3,068 808 3,876
Comprehensive income
Profit for the period - - 191 191 40 231
Other comprehensive income
Movements in cash flow hedging reserve, net of tax - 14 - 14 - 14
Movements in foreign currency translation reserve, net of tax - 3 - 3 - 3
Total other comprehensive income - 17 - 17 - 17
Total comprehensive income(1) - 17 191 208 40 248
Transactions with owners
Dividends - - (450) (450) - (450)
Distributions on other equity instruments - - - - (40) (40)
Total transactions with owners - - (450) (450) (40) (490)
At 30 June 2024(2) 370 (296) 2,752 2,826 808 3,634
Comprehensive income
Profit for the period - - 135 135 38 173
Other comprehensive income
Movements in cash flow hedging reserve, net of tax - 56 - 56 - 56
Movements in foreign currency translation reserve, net of tax - 4 - 4 - 4
Total other comprehensive income - 60 - 60 - 60
Total comprehensive income(1) - 60 135 195 38 233
Transactions with owners
Distributions on other equity instruments - - - - (38) (38)
Total transactions with owners - - - - (38) (38)
At 31 December 2024(2) 370 (236) 2,887 3,021 808 3,829
(1) Total comprehensive income attributable to owners of the parent for the
half-year to 30 June 2024 was £248 million (half-year to 31 December 2024:
£233 million).
(2) Total equity attributable to owners of the parent at 30 June 2024 was
£3,634 million (31 December 2024: £3,829 million).
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
Half-year Half-year
to 30 Jun to 30 Jun 2024
2025 £m
£m
Cash flows from operating activities
Profit before tax 266 293
Adjustments for:
Change in operating assets (3,635) (2,924)
Change in operating liabilities 255 1,001
Non-cash and other items 774 155
Net tax paid (28) (32)
Net cash used in operating activities (2,368) (1,507)
Cash flows from investing activities
Purchase of fixed assets - (6)
Proceeds from sale of fixed assets - 1
Net cash used in investing activities - (5)
Cash flows from financing activities
Dividends paid to ordinary shareholders - (450)
Distributions on other equity instruments (35) (40)
Interest paid on subordinated liabilities (24) (27)
Interest paid on finance leases (4) (2)
Proceeds from issue of other equity instruments 3,637 -
Gain on repayment of other equity instruments 4 -
Repayment of subordinated liabilities (730) -
Repurchases and redemptions of other equity instruments (300) -
Net cash generated from (used in) financing activities 2,548 (519)
Effect of exchange rate changes on cash and cash equivalents (788) 54
Change in cash and cash equivalents (608) (1,977)
Cash and cash equivalents at beginning of period 20,664 21,770
Cash and cash equivalents at end of period 20,056 19,793
Interest received was £1,191 million (half year to 30 June 2024: £1,150
million) and interest paid was £971 million (half year to 30 June 2024:
£1,153 million).
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
Cash and cash equivalents comprise cash and non-mandatory balances with
central banks and amounts due from banks with an original maturity of less
than three months.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
Note 1: Basis of preparation and accounting policies
These condensed consolidated half-year financial statements as at and for the
period to 30 June 2025 have been prepared in accordance with the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority (FCA) and
with International Accounting Standard 34 (IAS 34), Interim Financial
Reporting as adopted by the United Kingdom and comprise the results of Lloyds
Bank Corporate Markets plc (the Bank) together with its subsidiaries (the
Group). References within this document to LBCM refer to the Group as defined
here. Lloyds Banking Group plc is the ultimate parent company of LBCM and is
also referred to as LBG in this document. Lloyds and Lloyds Bank are trading
names of Lloyds Bank Corporate Markets plc.
These statements do not include all of the information required for full
annual financial statements and should be read in conjunction with LBCM's
consolidated financial statements as at and for the year ended 31 December
2024 which complied with international accounting standards in conformity with
the requirements of the Companies Act 2006 and were prepared in accordance
with IFRS® Accounting Standards as issued by the International Accounting
Standards Board (IASB). Copies of the 2024 annual report and accounts are
available at www.lloydsbankinggroup.com and are also available upon request
from Investor Relations, Lloyds Banking Group plc, 33 Old Broad Street, London
EC2N 1HZ.
The directors consider that it is appropriate to continue to adopt the going
concern basis in preparing these condensed consolidated half-year financial
statements. In reaching this assessment, the directors have taken into account
the uncertainties affecting the UK economy and their potential effects upon
LBCM's performance and projected funding and capital position; the impact of
further stress scenarios has also been considered. On this basis, the
directors are satisfied that LBCM will maintain adequate levels of funding and
capital for the foreseeable future.
LBCM's accounting policies are consistent with those applied by LBCM in its
financial statements for the year ended 31 December 2024 and there have been
no changes in LBCM's methods of computation.
The IASB has issued an amendment to IAS 21 The Effects of Changes in Foreign
Exchange Rates, effective 1 January 2025. This amendment has not had a
significant impact on LBCM.
Future accounting developments
There are a number of new accounting pronouncements issued by the IASB with an
effective date of 1 January 2027. This includes IFRS 18 Presentation and
Disclosure in Financial Statements which replaces IAS 1 Presentation of
Financial Statements and IFRS 19 Subsidiaries without Public Accountability:
Disclosures. The impact of these standards is being assessed and they have not
yet been endorsed for use in the UK.
The IASB has issued its annual improvements and a number of amendments to the
IFRS Accounting Standards effective 1 January 2026, including Amendments to
IFRS 9 Financial Instruments and Amendments to IFRS 7 Financial Instruments
Disclosure. These improvements and amendments are not expected to have a
significant impact on LBCM.
The Bank's ultimate parent undertaking and controlling party is Lloyds Banking
Group plc which is incorporated in Scotland. Lloyds Banking Group plc has
published consolidated accounts for the year to 31 December 2024 and copies
may be obtained from Investor Relations, Lloyds Banking Group, 33 Old Broad
Street, London EC2N 1HZ and are available for download from
www.lloydsbankinggroup.com.
The financial information contained in this document does not constitute
statutory accounts within the meaning of section 434 of the Companies Act
2006 (the Act). The statutory accounts for the year ended 31 December 2024
were approved by the directors on 26 February 2025 and were delivered to the
Registrar of Companies on 10 March 2025. The independent auditors' report on
those accounts was unqualified and did not include a statement under sections
498(2) (accounting records or returns inadequate or accounts not agreeing with
records and returns) or 498(3) (failure to obtain necessary information and
explanations) of the Act.
Note 2: Critical accounting judgements and key sources of estimation
uncertainty
The preparation of LBCM's financial statements in accordance with IFRS
requires management to make judgements, estimates and assumptions in applying
the accounting policies that affect the reported amounts of assets,
liabilities, income and expenses. Due to the inherent uncertainty in making
estimates, actual results reported in future periods may be based upon amounts
which differ from these estimates. Estimates, judgements and assumptions are
continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances.
LBCM's significant judgements, estimates and assumptions are unchanged
compared to those disclosed in note 3 of LBCM's 2024 financial statements.
Further information on the critical accounting judgements and key sources of
estimation uncertainty for the allowance for expected credit losses is set out
in note 7.
Note 3: Operating expenses
Half-year Half-year
to 30 Jun to 30 Jun
2025 2024
£m £m
Staff costs (107) (109)
Amounts payable to fellow Lloyds Banking Group undertakings (101) (101)
Other (38) (40)
Total operating expenses (246) (250)
Note 4: Impairment
Half-year Half-year
to 30 Jun to 30 Jun
2025 2024
£m £m
Loans and advances to banks - 1
Loans and advances to customers (2) 9
Debt securities - 2
Financial assets at amortised cost (2) 12
Loan commitments and financial guarantees 1 2
Total impairment (charge) / credit (1) 14
Note 5: Tax
In accordance with IAS 34, LBCM's income tax expense for the half-year to 30
June 2025 is based on the best estimate of the weighted-average annual income
tax rate expected for the full financial year. The tax effects of one-off
items are not included in the weighted-average annual income tax rate, but are
recognised in the relevant period.
An explanation of the relationship between tax expense and accounting profit
is set out below:
Half-year Half-year
to 30 Jun to 30 Jun
2025 2024
£m £m
Profit before tax 266 293
UK corporation tax thereon at 25.0% (2024: 25.0%) (66) (73)
Impact of surcharge on banking profits (2) (3)
Non-deductible costs (4) (1)
Non-taxable income 3 -
Tax relief on coupons on other equity instruments 8 10
Differences in overseas tax rates 4 5
Other adjustments in respect of prior years 1 (1)
Other - 1
Tax expense (56) (62)
Note 6: Fair values of financial assets and liabilities
The valuations of financial instruments have been classified into three levels
according to the quality and reliability of information used to determine
those fair values. Note 12 to LBCM's financial statements for the year ended
31 December 2024 details the definitions of the three levels in the fair
value hierarchy.
Financial instruments classified as financial assets at fair value through
profit or loss, derivative financial instruments, financial assets at fair
value through other comprehensive income and financial liabilities at fair
value through profit or loss are recognised at fair value.
LBCM manages valuation adjustments for its derivative exposures on a net
basis; LBCM determines their fair values on the basis of their net exposures.
In all other cases, fair values of financial assets and liabilities measured
at fair value are determined on the basis of their gross exposures.
Note 6: Fair values of financial assets and liabilities (continued)
The following tables provide an analysis of the financial assets and
liabilities of LBCM that are carried at fair value in LBCM's consolidated
balance sheet, grouped into levels 1 to 3 based on the degree to which the
fair value is observable. There were no significant transfers between level 1
and level 2 during the period.
Financial assets Level 1 Level 2 Level 3 Total
£m £m £m £m
At 30 June 2025
Financial assets at fair value through profit or loss:
Loans and advances to customers - 793 2 795
Reverse repurchase agreements - 20,656 - 20,656
Debt securities 4,635 981 124 5,740
Treasury and other bills 1 - - 1
Total financial assets at fair value through profit or loss 4,636 22,430 126 27,192
Derivative financial instruments 14 21,340 547 21,901
Total financial assets carried at fair value 4,650 43,770 673 49,093
At 31 December 2024
Financial assets at fair value through profit or loss:
Loans and advances to customers - 621 2 623
Reverse repurchase agreements - 20,465 - 20,465
Debt securities 3,473 1,040 132 4,645
Treasury and other bills 32 - - 32
Total financial assets at fair value through profit or loss 3,505 22,126 134 25,765
Derivative financial instruments 16 21,651 749 22,416
Total financial assets carried at fair value 3,521 43,777 883 48,181
Financial liabilities Level 1 Level 2 Level 3 Total
£m £m £m £m
At 30 June 2025
Financial liabilities at fair value through profit or loss:
Liabilities in respect of securities sold under repurchase agreements - 22,554 - 22,554
Short positions in securities 2,326 15 - 2,341
Other - 1 - 1
Total financial liabilities at fair value through profit or loss 2,326 22,570 - 24,896
Derivative financial instruments 29 15,430 182 15,641
Total financial liabilities carried at fair value 2,355 38,000 182 40,537
At 31 December 2024
Financial liabilities at fair value through profit or loss:
Liabilities in respect of securities sold under repurchase agreements - 20,564 - 20,564
Short positions in securities 2,400 17 - 2,417
Total financial liabilities at fair value through profit or loss 2,400 20,581 - 22,981
Derivative financial instruments 20 16,263 305 16,588
Total financial liabilities carried at fair value 2,420 36,844 305 39,569
Note 6: Fair values of financial assets and liabilities (continued)
Valuation control framework
Key elements of the valuation control framework include model validation
(incorporating pre-trade and post-trade testing), product implementation
review and independent price verification. The framework covers processes for
all 3 levels in the fair value hierarchy. Formal committees meet quarterly to
discuss and approve valuations in more judgemental areas.
Transfers into and out of level 3 portfolios
Transfers out of level 3 portfolios arise when inputs that could have a
significant impact on the instrument's valuation become market observable;
conversely, transfers into the portfolios arise when sources of data cease to
be observable.
Valuation methodology
For level 2 and level 3 portfolios, there is no significant change to the
valuation methodology (techniques and inputs) disclosed in LBCM's financial
statements for the year ended 31 December 2024 applied to these portfolios.
Movements in level 3 portfolio
The tables below analyse movements in the level 3 financial assets portfolio.
Financial Derivative assets Total
assets at £m financial
fair value assets
through carried at
profit or loss fair value
£m £m
At 1 January 2025 134 749 883
Exchange and other adjustments - 10 10
Losses recognised in the income statement within other income (4) (153) (157)
Purchases/increases - 8 8
Sales/repayments (4) (4) (8)
Transfers into the level 3 portfolio - 2 2
Transfers out of the level 3 portfolio - (65) (65)
At 30 June 2025 126 547 673
Losses recognised in the income statement, within other income, relating to (4) (124) (128)
the change in fair value of those assets held at 30 June 2025
At 1 January 2024 433 588
155
Exchange and other adjustments - 2 2
Losses recognised in the income statement within other income (15) (60) (75)
Purchases/increases 4 7
11
Sales/repayments - (22) (22)
Transfers into the level 3 portfolio - - -
Transfers out of the level 3 portfolio - - -
At 30 June 2024 144 360 504
Losses recognised in the income statement, within other income, relating to (15) (41) (56)
the change in fair value of those assets held at 30 June 2024
Note 6: Fair values of financial assets and liabilities (continued)
The tables below analyse movements in the level 3 financial liabilities
portfolio.
Derivative liabilities
£m
At 1 January 2025 305
Exchange and other adjustments 12
Gains recognised in the income statement within other income (140)
Purchases/increases 9
Sales/repayments (4)
At 30 June 2025 182
Gains recognised in the income statement, within other income, relating to the (110)
change in fair value of those liabilities held at 30 June 2025
At 1 January 2024 353
Exchange and other adjustments 16
Gains recognised in the income statement within other income (97)
Purchases/increases 5
Sales/repayments (22)
At 30 June 2024 255
Gains recognised in the income statement, within other income, relating to the (52)
change in fair value of those liabilities held at 30 June 2024
Note 6: Fair values of financial assets and liabilities (continued)
Sensitivity of level 3 valuations
The tables below set out the effects of reasonably possible alternative
assumptions for categories of level 3 financial assets and financial
liabilities.
Effect of reasonably
possible alternative
assumptions(1)
At 30 June 2025 Valuation Significant unobservable inputs(2) Carrying value Favourable changes Unfavourable
techniques £m £m changes
£m
Financial assets at fair value through profit or loss
Loans and advances to customers Discounted cash flows Spread (+/- 17bps) 2 - -
Debt securities Discounted cash flows Credit spreads (discount factor) and inflation volatility (+/- 13bps) 124 (16)
16
126
Derivative financial assets
Interest rate options Option pricing model Interest rate volatility 271 6 (4)
(12%/171%)
Interest rate derivatives Discounted cash flows (+/- 8%) uncertainty of recovery rates 276 22 (22)
547
Level 3 financial assets carried at fair value 673
Derivative financial liabilities
Interest rate derivatives Option pricing model Interest rate volatility 182 10 (12)
(12%/171%)
Level 3 financial liabilities carried at fair value 182
(1) Where the exposure to an unobservable input is managed on a net basis,
only the net impact is shown in the table.
(2) Ranges are shown where appropriate and represent the highest and lowest
inputs used in the level 3 valuations.
Note 6: Fair values of financial assets and liabilities (continued)
Effect of reasonably
possible alternative
assumptions(1)
At 31 December 2024 Valuation Significant Carrying value Favourable changes Unfavourable
techniques unobservable inputs(2) £m £m changes
£m
Financial assets at fair value through profit or loss
Loans and advances to customers Discounted cash flows Spread (+/- 16bps) 2 - -
Debt securities Discounted cash flows Credit spreads (discount factor) and inflation volatility (+/- 17bps) 132 (21)
21
134
Derivative financial assets
Interest rate options Option pricing model Interest rate volatility (11%/183%) 402 5 (6) -6000000
Interest rate derivatives Discounted cash flows (+/-8%) uncertainty of recovery rates 347 (21)
21
749
Level 3 financial assets carried at fair value 883
Derivative financial liabilities
Interest rate derivatives Option pricing model Interest rate volatility (11%/183%) 305 (10)
12
Level 3 financial liabilities carried at fair value 305
(1) Where the exposure to an unobservable input is managed on a net basis,
only the net impact is shown in the table.
(2) Ranges are shown where appropriate and represent the highest and lowest
inputs used in the level 3 valuations.
Unobservable inputs
Significant unobservable inputs affecting the valuation of debt securities and
derivatives are unchanged from those described in LBCM's financial statements
for the year ended 31 December 2024.
Reasonably possible alternative assumptions
Valuation techniques applied to many of LBCM's level 3 instruments often
involve the use of two or more inputs whose relationship is interdependent.
The calculation of the effect of reasonably possible alternative assumptions
included in the table above reflects such relationships and is unchanged from
that described in LBCM's financial statements for the year ended 31 December
2024.
Note 6: Fair values of financial assets and liabilities (continued)
The table below summarises the carrying values of financial assets and
liabilities measured at amortised cost in LBCM's consolidated balance sheet.
The fair values presented in the table are at a specific date and may be
significantly different from the amounts which will actually be paid or
received on the maturity or settlement date.
At 30 June 2025 At 31 December 2024
Carrying Fair Carrying Fair
value value value value
£m £m £m £m
Financial assets
Loans and advances to banks 1,625 1,624 1,255 1,251
Loans and advances to customers 18,747 18,756 17,800 17,809
Reverse repurchase agreements 6,100 6,100 5,332 5,332
Debt securities 347 344 336 330
Due from fellow Lloyds Banking Group undertakings 361 361 333 333
Financial liabilities
Deposits from banks 1,806 1,806 2,645 2,645
Customer deposits 32,157 32,177 30,945 30,956
Due to fellow Lloyds Banking Group undertakings 1,199 1,199 1,512 1,512
Debt securities in issue at amortised cost 12,379 12,410 15,090 15,097
Subordinated liabilities - - 746 747
The carrying amount of cash and balances at central banks is a reasonable
approximation of its fair value.
Note 7: Allowance for expected credit losses
The calculation of LBCM's allowance for expected credit loss allowances
requires LBCM to make a number of judgements, assumptions and estimates. These
are set out in detail in LBCM's 2024 annual report and accounts, with the most
significant set out below.
The table below analyses total ECL allowance, separately identifying the
amounts that have been modelled, those that have been individually assessed
and those arising through the application of judgemental adjustment.
Modelled Judgemental adjustments Total
ECL £m ECL
£m £m
At 30 June 2025 14 (1) 13
At 31 December 2024 16 (4) 12
Judgemental adjustments
Judgemental adjustments include corporate insolvency rates of £(2) million
(31 December 2024: £(6) million)
The volume of UK corporate insolvencies continues to exhibit an elevated trend
beyond December 2019 levels, revealing a marked misalignment between observed
UK corporate insolvencies and LBCM's equivalent credit performance. This
dislocation gives rise to uncertainty over the drivers of the observed trends
in the metric and the appropriateness of LBCM's Commercial Banking model
response which uses observed UK corporate insolvencies data to anchor future
loss estimates to. Given LBCM's asset quality remains robust with low
defaults, a negative adjustment is applied by reverting judgementally to the
long-term average of the insolvency rate. The scale of the negative adjustment
reduced in the period reflecting both the reduction in observed actual UK
corporate insolvencies rates, narrowing the gap of the misalignment, as well
from a one-off change due to the interaction with the implementation of loss
rate model enhancements in the period.
Note 7: Allowance for expected credit losses (continued)
Base case and MES economic assumptions
LBCM's base case economic scenario has been updated to reflect ongoing
geopolitical developments and changes in domestic economic policy. LBCM's
updated base case scenario has three conditioning assumptions. First, global
conflicts do not lead to major discontinuities in commodity prices or global
trade. Second, the US will impose tariffs on countries with a bilateral trade
deficit after the Liberation Day 90 day pause expires, resulting in an
increased effective tariff rate relative to prior assumptions. Third, the UK
Industrial Strategy and Spending Review are not assumed to substantially
change the UK fiscal outlook.
Based on these assumptions and incorporating the economic data published in
the second quarter of 2025, LBCM's base case scenario is for a slow expansion
in gross domestic product (GDP) and a further rise in the unemployment rate
alongside small gains in residential and commercial property prices. With
underlying inflationary pressures are expected to recede, gradual cuts in UK
Bank Rate are expected to continue during 2025, reaching a 'neutral' policy
stance in 2026. Risks around this base case economic view lie in both
directions and are largely captured by the generation of alternative economic
scenarios.
LBCM has taken into account the latest available information at the reporting
date in defining its base case scenario and generating alternative economic
scenarios. The scenarios include forecasts for key variables as at the second
quarter of 2025. Actuals for this period, or restatements of past data, may
have since emerged prior to publication and have not been included.
LBCM's approach to generating alternative economic scenarios is set out in
detail in note 16 to the financial statements for the year ended 31 December
2024. For June 2025, LBCM continues to judge it appropriate to include a
non-modelled severe downside scenario for LBCM ECL calculations. The scenario
is now generated as a simple average of a fully modelled severe scenario,
better representing shocks to demand, and a scenario with higher paths for UK
Bank Rate and CPI inflation, as a representation of shocks to supply. The
combined 'adjusted' scenario used in ECL modelling is considered to better
reflect the risks around LBCM's base case view in an economic environment
where demand and supply shocks are more balanced.
Scenarios by year
The key UK economic assumptions made by LBCM are shown in the following tables
across a number of measures explained below.
Annual assumptions
Gross domestic product (GDP) growth and Consumer Price Index (CPI) inflation
are presented as an annual change, house price growth and commercial real
estate price growth are presented as the growth in the respective indices over
each year. Unemployment rate and UK Bank Rate are averages over the year.
Five-year average
The five-year average reflects the average annual growth rate, or level, over
the five-year period. It includes movements within the current reporting year,
such that the position as of 30 June 2025 covers the five years 2025 to 2029.
The inclusion of the reporting year within the five-year period reflects the
need to predict variables which remain unpublished at the reporting date and
recognises that credit models utilise both level and annual changes. The use
of calendar years maintains a comparability between the annual assumptions
presented.
Note 7: Allowance for expected credit losses (continued)
At 30 June 2025 2025 2026 2027 2028 2029 2025
% % % % % to 2029 average
%
Upside
UK Gross domestic product growth 1.2 2.0 1.8 1.4 1.4 1.6
UK Unemployment rate 4.4 3.5 3.1 3.1 3.2 3.5
UK Commercial real estate price growth 5.1 8.1 3.8 1.1 0.4 3.6
UK Bank Rate 4.21 4.50 4.84 5.05 5.21 4.76
US Gross domestic product 1.6 3.2 2.2 0.6 0.6 1.5
US Unemployment rate 4.1 3.1 2.6 3.2 4.0 3.4
Base case
UK Gross domestic product growth 1.0 1.0 1.5 1.5 1.5 1.3
UK Unemployment rate 4.8 5.0 4.7 4.5 4.5 4.7
UK Commercial real estate price growth 1.6 1.1 1.3 0.3 0.0 0.9
UK Bank Rate 4.13 3.56 3.50 3.50 3.50 3.64
US Gross domestic product 1.2 1.0 1.7 1.8 1.9 1.5
US Unemployment rate 4.3 4.6 4.6 4.5 4.4 4.5
Downside
UK Gross domestic product growth 0.6 (1.2) 0.6 1.3 1.5 0.5
UK Unemployment rate 5.2 7.2 7.5 7.2 7.0 6.8
UK Commercial real estate price growth (1.6) (6.8) (1.6) (2.3) (2.7) (3.0)
UK Bank Rate 4.02 1.90 0.99 0.68 0.46 1.61
US Gross domestic product 0.9 (0.8) 1.0 2.8 3.1 1.4
US Unemployment rate 4.5 5.9 6.4 5.7 4.8 5.5
Severe downside
UK Gross domestic product growth 0.1 (3.0) 0.0 1.2 1.4 (0.1)
UK Unemployment rate 5.8 9.7 10.2 9.8 9.4 9.0
UK Commercial real estate price growth (6.5) (16.0) (7.4) (6.7) (5.7) (8.6)
UK Bank Rate - modelled 3.88 0.68 0.11 0.03 0.01 0.94
UK Bank Rate - adjusted(1) 4.34 3.09 2.80 2.77 2.76 3.15
US Gross domestic product 0.4 (3.8) 0.4 4.6 4.9 1.3
US Unemployment rate 4.8 8.2 9.2 7.5 5.4 7.0
Probability-weighted
UK Gross domestic product growth 0.9 0.2 1.1 1.4 1.4 1.0
UK Unemployment rate 4.9 5.7 5.6 5.4 5.4 5.4
UK Commercial real estate price growth 0.9 (0.9) 0.3 (1.0) (1.2) (0.4)
UK Bank Rate - modelled 4.09 3.06 2.81 2.77 2.75 3.10
UK Bank Rate - adjusted(1) 4.14 3.30 3.08 3.04 3.03 3.32
US Gross domestic product 1.2 0.6 1.5 2.0 2.1 1.4
US Unemployment rate 4.4 4.9 5.0 4.8 4.5 4.7
(1) The adjustment to UK Bank Rate and CPI inflation in the severe downside
is considered to better reflect the risks to LBCM's base case view in an
economic environment where the risks of supply and demand shocks are seen as
more balanced.
Note 7: Allowance for expected credit losses (continued)
At 31 December 2024 2024 2025 2026 2027 2028 2024
% % % % % to 2028 average
%
Upside
UK Gross domestic product growth 0.8 1.9 2.2 1.5 1.4 1.6
UK Unemployment rate 4.3 3.5 2.8 2.7 2.8 3.2
UK Commercial real estate price growth 0.7 7.8 6.7 3.2 0.5 3.7
UK Bank Rate 5.06 4.71 5.02 5.19 5.42 5.08
US Gross domestic product 2.8 3.5 3.5 1.4 0.6 2.1
US Unemployment rate 4.0 3.6 2.6 2.7 3.5 3.3
Base case
UK Gross domestic product growth 0.8 1.0 1.4 1.5 1.5 1.2
UK Unemployment rate 4.3 4.7 4.7 4.5 4.5 4.5
UK Commercial real estate price growth 0.7 0.3 2.5 1.9 0.0 1.1
UK Bank Rate 5.06 4.19 3.63 3.50 3.50 3.98
US Gross domestic product 2.8 2.0 1.8 1.9 1.9 2.0
US Unemployment rate 4.0 4.3 4.4 4.4 4.3 4.3
Downside
UK Gross domestic product growth 0.8 (0.5) (0.4) 1.0 1.5 0.5
UK Unemployment rate 4.3 6.0 7.4 7.4 7.1 6.4
UK Commercial real estate price growth 0.7 (7.8) (3.1) (0.9) (2.3) (2.7)
UK Bank Rate 5.06 3.53 1.56 0.96 0.68 2.36
US Gross domestic product 2.8 0.8 0.2 2.2 3.1 1.8
US Unemployment rate 4.0 5.0 6.2 6.1 5.2 5.3
Severe downside
UK Gross domestic product growth 0.8 (1.9) (1.5) 0.7 1.3 (0.1)
UK Unemployment rate 4.3 7.7 10.0 10.0 9.7 8.4
UK Commercial real estate price growth 0.7 (17.4) (8.5) (5.5) (5.7) (7.5)
UK Bank Rate - modelled 5.06 2.68 0.28 0.08 0.02 1.62
UK Bank Rate - adjusted(1) 5.06 4.03 2.70 2.23 1.95 3.19
US Gross domestic product 2.8 (1.2) (2.1) 2.9 5.1 1.6
US Unemployment rate 4.0 6.2 9.1 8.6 6.5 6.9
Probability-weighted
UK Gross domestic product growth 0.8 0.5 0.8 1.2 1.4 1.0
UK Unemployment rate 4.3 5.0 5.5 5.4 5.3 5.1
UK Commercial real estate price growth 0.7 (1.7) 1.0 0.7 (1.1) (0.1)
UK Bank Rate - modelled 5.06 4.00 3.09 2.90 2.88 3.59
UK Bank Rate - adjusted(1) 5.06 4.13 3.33 3.12 3.08 3.74
US Gross domestic product 2.8 1.8 1.5 1.9 2.2 1.9
US Unemployment rate 4.0 4.5 4.9 4.8 4.5 4.5
(1) The adjustment to UK Bank Rate and CPI inflation in the severe downside
is considered to better reflect the risks to LBCM's base case view in an
economic environment where the risks of supply and demand shocks are seen as
more balanced.
Note 7: Allowance for expected credit losses (continued)
Base case scenario by quarter
Gross domestic product growth is presented quarter-on-quarter. Commercial real
estate price growth is presented year-on-year, i.e. from the equivalent
quarter in the previous year. Unemployment rate and UK Bank Rate are presented
as at the end of each quarter.
At 30 June 2025 First Second Third Fourth First Second Third Fourth
quarter quarter quarter quarter quarter quarter quarter quarter
2025 2025 2025 2025 2026 2026 2026 2026
% % % % % % % %
UK Gross domestic product growth 0.7 0.0 0.1 0.2 0.3 0.3 0.4 0.4
UK Unemployment rate 4.5 4.7 4.9 5.0 5.0 5.0 4.9 4.9
UK Commercial real estate price growth 2.5 2.7 2.6 1.6 1.2 1.0 1.0 1.1
UK Bank Rate 4.50 4.25 4.00 3.75 3.75 3.50 3.50 3.50
US Gross domestic product growth (0.1) 0.3 0.1 0.1 0.3 0.3 0.4 0.4
US Unemployment rate 4.1 4.3 4.4 4.5 4.6 4.6 4.6 4.6
At 31 December 2024 First Second Third Fourth First Second Third Fourth
quarter quarter quarter quarter quarter quarter quarter quarter
2024 2024 2024 2024 2025 2025 2025 2025
% % % % % % % %
UK Gross domestic product growth 0.7 0.4 0.0 0.1 0.2 0.3 0.3 0.3
UK Unemployment rate 4.3 4.2 4.3 4.4 4.5 4.6 4.7 4.8
UK Commercial real estate price growth (5.3) (4.7) (2.8) 0.7 1.8 1.4 0.9 0.3
UK Bank Rate 5.25 5.25 5.00 4.75 4.50 4.25 4.00 4.00
US Gross domestic product growth 0.4 0.7 0.8 0.5 0.4 0.4 0.4 0.5
US Unemployment rate 3.8 4.0 4.2 4.2 4.2 4.3 4.3 4.4
ECL sensitivity to economic assumptions
The table below shows LBCM's ECL for the probability-weighted, upside, base
case, downside and severe downside scenarios. The stage allocation for an
asset is based on the overall scenario probability-weighted PD and hence the
staging of assets is typically constant across all the scenarios. ECL for
post-model adjustments have been apportioned relative to their sensitivity in
each scenario. Judgements applied through changes to inputs are reflected in
the scenario sensitivities.
Probability- Upside Base case Downside Severe
weighted £m £m £m downside
£m £m
At 30 June 2025 13 7 10 16 29
At 31 December 2024 12 6 10 15 27
Note 7: Allowance for expected credit losses (continued)
Movement in expected credit loss allowance
Half-year to 30 June 2025 Half-year to 31 December 2024 Half-year to 30 June 2024
£m £m £m
Opening ECL at start of period 12 15 31
Write-offs and other - (1) (2)
Income statement charge (credit) 1 (2) (14)
Net ECL increase (decrease) 1 (3) (16)
Closing ECL at end of period 13 12 15
Note 8: Debt securities in issue at amortised cost
At 30 Jun 2025 At 31 Dec 2024
Senior unsecured notes issued 3,227 6,619
Certificates of deposit issued 4,494 5,179
Commercial paper 4,658 3,292
Total debt securities in issue at amortised cost 12,379 15,090
( )
(
)
Note 9: Dividends on ordinary shares
The Bank did not pay a dividend in the period to 30 June 2025 (2024: £450
million).
Note 10: Related party transactions
Balances and transactions with fellow Lloyds Banking Group undertakings
The Bank and its subsidiaries have balances due to and from the Bank's
ultimate parent company, Lloyds Banking Group plc, and fellow Lloyds Banking
Group undertakings. These are included on the balance sheet as follows:
At 30 Jun At 31 Dec
2025 2024
£m £m
Assets, included within:
Financial assets at fair value through profit or loss 17 37
Derivative financial instruments 2,673 2,490
Financial assets at amortised cost: due from fellow Lloyds Banking Group 361 333
undertakings
Liabilities, included within:
Due to fellow Lloyds Banking Group undertakings 1,199 1,512
Financial liabilities at fair value through profit or loss 504 -
Derivative financial instruments 1,276 1,352
Debt securities in issue at amortised cost - 3,307
Subordinated liabilities - 748
Other equity instruments:
Additional tier 1 instruments 4,145 808
During the half-year to 30 June 2025 LBCM earned £nil (half-year to 30 June
2024: £5 million) of interest income and incurred £122 million (half-year
to 30 June 2024: £132 million) of interest expense on balances and
transactions with Lloyds Banking Group plc and fellow Group undertakings.
A regulatory capital restructuring exercise was undertaken during the period
to 30 June 2025. All senior MREL funding (debt securities at amortised cost
above) and tier 2 capital (subordinated liabilities above) were repaid, with
the associated charges recognised through other income. New additional tier 1
capital was then issued (other equity instruments above).
Other related party transactions
Other related party transactions for the half-year to 30 June 2025 are similar
in nature to those for the year ended 31 December 2024.
Note 11: Contingent liabilities, commitments and guarantees
Contingent liabilities, commitments and guarantees arising from the banking
business
At 30 June 2025 contingent liabilities, such as performance bonds and letters
of credit, arising from the banking business were £37 million (31 December
2024: £82 million).
The contingent liabilities of LBCM arise in the normal course of its banking
business and it is not practicable to quantify their future financial effect.
Total commitments and guarantees were £21,320 million (31 December 2024:
£20,713 million), of which in respect of undrawn formal standby facilities,
credit lines and other commitments to lend is £20,853 million (31 December
2024: £20,216 million) was irrevocable.
LIBOR and other trading rates
Certain Group companies, together with other panel banks, have been named as
defendants in ongoing private lawsuits, including purported class action
suits, in the US in connection with their roles as panel banks contributing to
the setting of US dollar, Japanese yen and Sterling London Interbank Offered
Rate.
It is currently not possible to predict the scope and ultimate outcome on the
Group of any private lawsuits or ongoing related challenges to the
interpretation or validity of any of the Group's contractual arrangements,
including their timing and scale. As such, it is not practicable to provide an
estimate of any potential financial effect.
Other legal actions and regulatory matters
In the course of its business LBCM is subject to complaints and threatened or
actual legal proceedings (including class or group action claims) brought by
or on behalf of current or former employees, customers (including their
appointed representatives), investors or other third parties, as well as legal
and regulatory reviews, enquiries and examinations, requests for information,
audits, challenges, investigations and enforcement actions, which could relate
to a number of issues. This includes matters in relation to compliance with
applicable laws and regulations, such as those relating to prudential
regulation, consumer protection, investment advice, business conduct, systems
and controls, environmental, competition/anti-trust, tax, anti-bribery,
anti-money laundering and sanctions, some of which may be beyond LBCM's
control, both in the UK and overseas. Where material, such matters are
periodically reassessed, with the assistance of external professional advisers
where appropriate, to determine the likelihood of LBCM incurring a liability.
LBCM does not currently expect the final outcome of any such case to have a
material adverse effect on its financial position, operations or cash flows.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors listed below (being all the directors of Lloyds Bank Corporate
Markets plc) confirm that to the best of their knowledge these condensed
consolidated half-year financial statements have been prepared in accordance
with UK adopted International Accounting Standard 34, Interim Financial
Reporting, and that the half-year management report herein includes a fair
review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:
• an indication of important events that have occurred during the six
months ended 30 June 2025 and their impact on the condensed consolidated
half-year financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
• material related party transactions in the six months ended 30 June 2025
and any material changes in the related party transactions described in the
last annual report.
Signed on behalf of the Board by
Carla Antunes da Silva
Chief Executive Officer
29 July 2025
Lloyds Bank Corporate Markets plc Board of directors:
Executive directors
Carla Antunes da Silva (Chief Executive Officer)
Julienne Daglish (Chief Financial Officer)
Non-executive directors
Ruth Anderson
Mark Basten
Nathan Bostock (Chair)
Eve Henrikson
Andrew McIntyre
John Owen
Richard Shrimpton
Changes to the composition of the Board since 1 January 2025 up to the date of
this report are shown below:
Cecile Hillary (resigned 28 February 2025)
Richard Shrimpton (appointed 1 March 2025)
Ruth Anderson (appointed 1 April 2025)
INDEPENDENT REVIEW REPORT TO LLOYDS BANK CORPORATE MARKETS PLC
Conclusion
We have been engaged by the Lloyds Bank Corporate Markets plc and its
subsidiaries (the "Group") to review the condensed consolidated set of
financial statements in the half-yearly financial report for the six months
ended 30 June 2025 which comprises the consolidated income statement, the
consolidated statement of comprehensive income, the consolidated balance
sheet, the consolidated statement of changes in equity, the consolidated cash
flow statement and related notes 1 to 11.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed consolidated set of financial statements in the
half-yearly financial report for the six months ended 30 June 2025 is not
prepared, in all material respects, in accordance with United Kingdom adopted
International Accounting Standard 34 and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the Group will be
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report have been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE (UK) 2410; however future events or conditions may cause the Group
to cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the Group a conclusion on the condensed consolidated set of
financial statement in the half-yearly financial report. Our conclusion,
including our Conclusions Relating to Going Concern, are based on procedures
that are less extensive than audit procedures, as described in the Basis for
Conclusion paragraph of this report.
INDEPENDENT REVIEW REPORT TO LLOYDS BANK CORPORATE MARKETS PLC (continued)
Use of our report
This report is made solely to the Group in accordance with International
Standard on Review Engagements (UK) 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity" issued by the
Financial Reporting Council. Our work has been undertaken so that we might
state to the Group those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Group, for our review work, for this report, or for the conclusions
we have formed.
Deloitte LLP
Statutory Auditor
London, England
29 July 2025
FORWARD LOOKING STATEMENTS
This document contains certain forward-looking statements within the meaning
of Section 21E of the US Securities Exchange Act of 1934, as amended, and
section 27A of the US Securities Act of 1933, as amended, with respect to the
business, strategy, plans and/or results of Lloyds Bank Corporate Markets plc
together with its subsidiaries (the Group) and its current goals and
expectations. Statements that are not historical or current facts, including
statements about the Group's or its directors' and/or management's beliefs and
expectations, are forward-looking statements.
Words such as, without limitation, 'believes', 'achieves', 'anticipates',
'estimates', 'expects', 'targets', 'should', 'intends', 'aims', 'projects',
'plans', 'potential', 'will', 'would', 'could', 'considered', 'likely', 'may',
'seek', 'estimate', 'probability', 'goal', 'objective', 'deliver',
'endeavour', 'prospects', 'optimistic' and similar expressions or variations
on these expressions are intended to identify forward-looking statements.
These statements concern or may affect future matters, including but not
limited to: projections or expectations of the Group's future financial
position, including profit attributable to shareholders, provisions, economic
profit, dividends, capital structure, portfolios, net interest margin, capital
ratios, liquidity, risk-weighted assets (RWAs), expenditures or any other
financial items or ratios; litigation, regulatory and governmental
investigations; the Group's future financial performance; the level and extent
of future impairments and write-downs; the Group's ESG targets and/or
commitments; statements of plans, objectives or goals of the Group or its
management and other statements that are not historical fact and statements of
assumptions underlying such statements.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend upon circumstances that will or may
occur in the future.
Factors that could cause actual business, strategy, targets, plans and/or
results (including but not limited to the payment of dividends) to differ
materially from forward-looking statements include, but are not limited to:
general economic and business conditions in the UK and internationally
(including in relation to tariffs); imposed and threatened tariffs and changes
to global trade policies; acts of hostility or terrorism and responses to
those acts, or other such events; geopolitical unpredictability; the war
between Russia and Ukraine; the escalation of conflicts in the Middle East;
the tensions between China and Taiwan; political instability including as a
result of any UK general election; market related risks, trends and
developments; changes in client and consumer behaviour and demand; exposure to
counterparty risk; the impact of any regulatory and/or legislative divergence
between the UK and EU as a result of the exit by the UK from the European
Union (EU) and the effects of the EU-UK Trade and Cooperation Agreement; the
ability to access sufficient sources of capital, liquidity and funding when
required; changes to the Group's credit ratings; fluctuations in interest
rates, inflation, exchange rates, stock markets and currencies; volatility in
credit markets; volatility in the price of the Group's securities; natural
pandemic and other disasters; risks concerning borrower and counterparty
credit quality; risks affecting defined benefit pension schemes; changes in
laws, regulations, practices and accounting standards or taxation; changes to
regulatory capital or liquidity requirements and similar contingencies; the
policies and actions of governmental or regulatory authorities or courts
together with any resulting impact on the future structure of the Group; risks
associated with the Group's compliance with a wide range of laws and
regulations; assessment related to resolution planning requirements; risks
related to regulatory actions which may be taken in the event of a bank or
Group failure; exposure to legal, regulatory or competition proceedings,
investigations or complaints; failure to comply with anti-money laundering,
counter terrorist financing, anti-bribery and sanctions regulations; failure
to prevent or detect any illegal or improper activities; operational risks
including risks as a result of the failure of third party suppliers; conduct
risk; technological changes and risks to the security of IT and operational
infrastructure, systems, data and information resulting from increased threat
of cyber and other attacks; technological failure; inadequate or failed
internal or external processes or systems; risks relating to ESG matters, such
as climate change (and achieving climate change ambitions) and
decarbonisation, including the Group's ability along with the government and
other stakeholders to measure, manage and mitigate the impacts of climate
change effectively, and human rights issues; the impact of competitive
conditions; failure to attract, retain and develop high calibre talent; the
ability to achieve strategic objectives; the ability to derive cost savings
and other benefits including, but without limitation, as a result of any
acquisitions, disposals and other strategic transactions; inability to capture
accurately the expected value from acquisitions; and assumptions and estimates
that form the basis of the Group's financial statements. A number of these
influences and factors are beyond the Group's control. Please refer to Base
Prospectus for the Group's Euro Medium-Term Note Programme and the latest
Annual Report on Form 20-F filed by Lloyds Banking Group plc with the US
Securities and Exchange Commission (the SEC), which is available on the SEC's
website at www.sec.gov, for a discussion of certain factors and risks. Lloyds
Banking Group plc may also make or disclose written and/or oral
forward-looking statements in other written materials and in oral statements
made by the directors, officers or employees of Lloyds Banking Group plc to
third parties, including financial analysts.
Except as required by any applicable law or regulation, the forward-looking
statements contained in this document are made as of today's date, and the
Group expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements contained in this
document whether as a result of new information, future events or otherwise.
The information, statements and opinions contained in this document do not
constitute a public offer under any applicable law or an offer to sell any
securities or financial instruments or any advice or recommendation with
respect to such securities or financial instruments.
CONTACTS
For further information please contact:
INVESTORS AND ANALYSTS
Douglas Radcliffe
Group Investor Relations Director
020 7356 1571
douglas.radcliffe@lloydsbanking.com
Rohith Chandra-Rajan
Director of Investor Relations
07353 885 690
rohith.chandra-rajan@lloydsbanking.com
Nora Thoden
Director of Investor Relations - ESG
020 7356 2334
nora.thoden@lloydsbanking.com
Tom Grantham
Investor Relations Senior Manager
07851 440 091
thomas.grantham@lloydsbanking.com
Sarah Robson
Investor Relations Senior Manager
07494 513 983
sarah.robson2@lloydsbanking.com
CORPORATE AFFAIRS
Matt Smith
Head of Media Relations
07788 352 487
matt.smith@lloydsbanking.com
Emma Fairhurst
Media Relations Senior Manager
07814 395 855
emma.fairhurst@lloydsbanking.com
Copies of this News Release may be obtained from:
Investor Relations, Lloyds Banking Group plc, 33 Old Broad Street, London EC2N
1HZ
The statement can also be found on the Lloyds Banking Group's website -
www.lloydsbankinggroup.com
Registered office: Lloyds Bank Corporate Markets plc, 25 Gresham Street,
London EC2V 7HN
Registered in England No. 10399850
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