REG - Lloyds Banking Group - 2023 Q3 Interim Management Statement
25/10/2023 07:00
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RNS Number : 1733R Lloyds Banking Group PLC 25 October 2023
Lloyds Banking Group plc
Q3 2023 Interim Management Statement
25 October 2023
RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2023
"Guided by our purpose, we remain focused on supporting our customers and
helping them navigate the uncertain economic environment.
The Group continues to perform well. Robust financial performance and strong
capital generation in the first nine months of the year was driven by net
income growth, cost discipline and resilient asset quality. This performance
allows us to reaffirm our 2023 guidance.
As we set out in the first of our four strategic seminars(1) earlier this
month, we are successfully executing against our strategic priorities. This
supports progress towards our ambition to enable higher, more sustainable
returns. Together, it will better position us to deliver for all of our
stakeholders as we continue to help Britain prosper."
Charlie Nunn,
Group Chief Executive
Continued robust financial performance and consistent delivery
• Statutory profit after tax of £4.3 billion (£1.4 billion in the third
quarter) with net income of £13.7 billion up 7 per cent. Strong return on
tangible equity of 16.6 per cent, 16.9 per cent in the third quarter
• Underlying net interest income of £10.4 billion up 10 per cent with a
net interest margin of 3.15 per cent. Net interest margin of 3.08 per cent in
the third quarter, down 6 basis points in the quarter given the expected
mortgage and deposit pricing headwinds. Average interest-earning assets of
£453.5 billion, stable versus the fourth quarter of 2022
• Underlying other income of £3.8 billion, 8 per cent higher, reflecting
continued recovery of customer activity and ongoing investment in the business
as we progress against our strategic initiatives
• Operating lease depreciation of £585 million, up on the previous year
given depreciation of higher value vehicles, growth partly from the Tusker
acquisition, lower gains on disposal and recent declines in used electric car
prices
• Operating costs of £6.7 billion, up 5 per cent and in line with
expectations. The Group maintains cost discipline in the context of higher
planned strategic investment, new business costs and continued inflationary
pressures
• Impairment charge of £0.8 billion and asset quality ratio of 25 basis
points, reflecting broadly stable credit trends and resilient asset quality.
The portfolio remains well-positioned in the context of the economic
environment
• Loans and advances to customers reduced £2.8 billion to £452.1
billion, including a £2.5 billion legacy portfolio exit in the first
quarter. Balances increased by £1.4 billion in the third quarter with growth
across a number of businesses, including in the open mortgage book (£0.4
billion) and the unsecured and Corporate and Institutional Banking portfolios
• Customer deposits of £470.3 billion down £5.0 billion (1.0 per cent),
including a £9.4 billion reduction in Retail current accounts, partly offset
by a combined £5.2 billion increase in Retail savings and Wealth balances.
Deposits increased by £0.5 billion during the third quarter, given growth in
Retail savings
• Strong capital generation of 165 basis points; 129 basis points after
CRD IV model changes and phased unwind of IFRS 9 relief
• Pensions triennial review substantially agreed with an additional
contribution of £250 million to be paid by the end of March 2024, and no
further contributions in this triennial period
• Risk-weighted assets of £217.7 billion increased by £6.8 billion,
reflecting part of the anticipated impact of CRD IV model updates along with
lending and other increases, net of optimisation activity
• Tangible net assets per share of 47.2 pence, slightly up on the end of
2022; up 1.5 pence in the third quarter, given higher profits, the reduction
in share count (c.7 per cent year to date following the completion of the £2
billion share buyback) and movements in the cash flow hedge reserve, partly
offset by pensions surplus changes and distributions
• CET1 ratio of 14.6 per cent remains ahead of ongoing c.12.5 per cent
target, plus management buffer of c.1 per cent
2023 guidance reaffirmed, with slightly improved asset quality;
• Banking net interest margin of greater than 310 basis points
• Operating costs of c.£9.1 billion
• Asset quality ratio now expected to be less than 30 basis points
• Return on tangible equity of greater than 14 per cent
• Capital generation of c.175 basis points(2)
(1) Event materials available at:
https://www.lloydsbankinggroup.com/investors/financial-downloads/event-presentations-webcasts.html.
(2) Excluding capital distributions and the impact of the Tusker
acquisition. Inclusive of ordinary dividends received from the
Insurance business.
INCOME STATEMENT - UNDERLYING BASIS(A) AND KEY BALANCE SHEET METRICS
Nine Nine Change Three Three Change
months
months
ended months %
ended months %
30 Sep
30 Sep
2023 ended
2023 ended
£m
£m
30 Sep 30 Sep
2022 2022
£m £m
Underlying net interest income 10,448 9,529 10 3,444 3,394 1
Underlying other income(1) 3,837 3,538 8 1,299 1,171 11
Operating lease depreciation (585) (295) (98) (229) (82)
Net income 13,700 12,772 7 4,514 4,483 1
Operating costs(1) (6,654) (6,316) (5) (2,241) (2,145) (4)
Remediation (134) (89) (51) (64) (10)
Total costs (6,788) (6,405) (6) (2,305) (2,155) (7)
Underlying profit before impairment 6,912 6,367 9 2,209 2,328 (5)
Underlying impairment charge (849) (1,045) 19 (187) (668) 72
Underlying profit 6,063 5,322 14 2,022 1,660 22
Restructuring (69) (69) (44) (22)
Volatility and other items(1) (266) (1,528) 83 (120) (1,062) 89
Statutory profit before tax(1) 5,728 3,725 54 1,858 576
Tax expense(1) (1,444) (784) (84) (438) (82)
Statutory profit after tax(1) 4,284 2,941 46 1,420 494
Earnings per share(1) 5.9p 3.7p 2.2p 2.0p 0.6p 1.4p
Banking net interest margin(A) 3.15% 2.84% 31bp 3.08% 2.98% 10bp
Average interest-earning banking assets(A) £453.5bn £451.4bn £453.0bn £454.9bn
Cost:income ratio(A,1) 49.5% 50.1% (0.6)pp 51.1% 48.1% 3.0pp
Asset quality ratio(A) 0.25% 0.30% (5)bp 0.17% 0.57% (40)bp
Return on tangible equity(A,1) 16.6% 9.6% 7.0pp 16.9% 4.2% 12.7pp
At 30 Sep At 30 Sep Change At 31 Dec Change
2023
2022
2022
% %
Loans and advances to customers £452.1bn £456.3bn (1) £454.9bn (1)
Customer deposits £470.3bn £484.3bn (3) £475.3bn (1)
Loan to deposit ratio(A) 96% 94% 2pp 96%
CET1 ratio 14.6% 15.0% (0.4)pp 15.1% (0.5)pp
Pro forma CET1 ratio(A,2) 14.6% 15.0% (0.4)pp 14.1% 0.5pp
Total capital ratio 19.9% 19.4% 0.5pp 19.7% 0.2pp
MREL ratio 32.6% 32.8% (0.2)pp 31.7% 0.9pp
UK leverage ratio 5.7% 5.3% 0.4pp 5.6% 0.1pp
Risk-weighted assets £217.7bn £210.8bn 3 £210.9bn 3
Wholesale funding £108.5bn £98.9bn 10 £100.3bn 8
Liquidity coverage ratio(3) 142% 146% (4)pp 144% (2)pp
Net stable funding ratio(4) 130% 130%
Tangible net assets per share(A,1) 47.2p 44.5p 2.7p 46.5p 0.7p
(A) See page 15.
(1) 2022 comparatives have been restated to reflect the impact of IFRS 17.
See page 16.
(2 ) 31 December 2022 reflects the interim ordinary dividend received
from the Insurance business in February 2023 and the full impact of the
announced share buyback, but excludes the impact of the phased unwind of IFRS
9 relief on 1 January 2023.
(3) The liquidity coverage ratio is calculated as a monthly rolling simple
average over the previous 12 months.
(4) Net stable funding ratio is based on an average of the four previous
quarters.
(
)
QUARTERLY INFORMATION(A)
Quarter Quarter Change Quarter Quarter Quarter Quarter Quarter
ended ended % ended ended ended ended ended
30 Sep 30 Jun 31 Mar 31 Dec 30 Sep 30 Jun 31 Mar
2023 2023 2023 2022 2022 2022 2022
£m £m £m £m £m £m £m
Underlying net interest income 3,444 3,469 (1) 3,535 3,643 3,394 3,190 2,945
Underlying other income(1) 1,299 1,281 1 1,257 1,128 1,171 1,185 1,182
Operating lease depreciation (229) (216) (6) (140) (78) (82) (119) (94)
Net income 4,514 4,534 4,652 4,693 4,483 4,256 4,033
Operating costs(1) (2,241) (2,243) (2,170) (2,356) (2,145) (2,112) (2,059)
Remediation (64) (51) (25) (19) (166) (10) (27) (52)
Total costs (2,305) (2,294) (2,189) (2,522) (2,155) (2,139) (2,111)
Underlying profit before impairment 2,209 2,240 (1) 2,463 2,171 2,328 2,117 1,922
Underlying impairment charge (187) (419) 55 (243) (465) (668) (200) (177)
Underlying profit 2,022 1,821 11 2,220 1,706 1,660 1,917 1,745
Restructuring (44) (13) (12) (11) (22) (23) (24)
Volatility and other items(1) (120) (198) 39 52 (638) (1,062) (289) (177)
Statutory profit before tax(1) 1,858 1,610 15 2,260 1,057 576 1,605 1,544
Tax expense(1) (438) (387) (13) (619) (75) (82) (303) (399)
Statutory profit after tax(1) 1,420 1,223 16 1,641 982 494 1,302 1,145
Banking net interest margin(A) 3.08% 3.14% (6)bp 3.22% 3.22% 2.98% 2.87% 2.68%
Average interest-earning banking assets(A) £453.0bn £453.4bn £454.2bn £453.8bn £454.9bn £451.2bn £448.0bn
Cost:income ratio(A,1) 51.1% 50.6% 0.5pp 47.1% 53.7% 48.1% 50.3% 52.3%
Asset quality ratio(A) 0.17% 0.36% (19)bp 0.22% 0.38% 0.57% 0.17% 0.16%
Return on tangible equity(A,1) 16.9% 13.6% 3.3pp 19.1% 11.0% 4.2% 13.0% 10.7%
Loans and advances to customers £452.1bn £450.7bn £452.3bn £454.9bn £456.3bn £456.1bn £451.8bn
Customer deposits £470.3bn £469.8bn £473.1bn £475.3bn £484.3bn £478.2bn £481.1bn
Loan to deposit ratio(A) 96% 96% 96% 96% 94% 95% 94%
Risk-weighted assets £217.7bn £215.3bn 1 £210.9bn £210.9bn £210.8bn £209.6bn £210.2bn
Tangible net assets per share(A,1) 47.2p 45.7p 1.5p 49.6p 46.5p 44.5p 51.4p 53.7p
(1 ) 2022 comparatives have been restated to reflect the impact of IFRS
17. See page 16.
(
)
BALANCE SHEET ANALYSIS
At 30 Sep At 30 Jun Change At 30 Sep Change At 31 Dec Change
2023
2023
2022
£bn
£bn % 2022 %
£bn %
£bn
Loans and advances to customers
Open mortgage book 298.3 297.9 298.4 299.6
Closed mortgage book 8.1 8.5 (5) 12.3 (34) 11.6 (30)
Credit cards 15.1 14.9 1 14.3 6 14.3 6
UK Retail unsecured loans 9.5 9.3 2 8.8 8 8.7 9
UK Motor Finance 15.1 14.9 1 14.2 6 14.3 6
Overdrafts 1.0 1.0 1.0 1.0
Wealth 0.9 0.9 1.0 (10) 0.9
Retail other(1) 15.1 14.5 4 13.0 16 13.8 9
Small and Medium Businesses 34.2 35.5 (4) 39.8 (14) 37.7 (9)
Corporate and Institutional Banking 57.3 56.6 1 57.6 (1) 56.0 2
Central items(2) (2.5) (3.3) 24 (4.1) 39 (3.0) 17
Loans and advances to customers 452.1 450.7 456.3 (1) 454.9 (1)
Customer deposits
Retail current accounts 104.6 107.8 (3) 115.7 (10) 114.0 (8)
Retail relationship savings accounts 173.8 169.4 3 165.7 5 166.3 5
Retail tactical savings accounts 17.0 16.5 3 16.2 5 16.1 6
Wealth 11.2 12.2 (8) 14.9 (25) 14.4 (22)
Commercial Banking deposits 163.7 163.6 170.2 (4) 163.8
Central items - 0.3 1.6 0.7
Customer deposits 470.3 469.8 484.3 (3) 475.3 (1)
Total assets(3) 893.1 882.8 1 888.8 873.4 2
Total liabilities(3) 848.1 838.3 1 845.5 829.5 2
Ordinary shareholders' equity(3) 37.9 37.3 2 36.9 3 38.4 (1)
Other equity instruments 6.9 6.9 6.2 11 5.3 30
Non-controlling interests 0.2 0.3 (33) 0.2 0.2
Total equity 45.0 44.5 1 43.3 4 43.9 3
Ordinary shares in issue, excluding own shares 63,486m 64,571m (2) 67,464m (6) 66,944m (5)
(1) Primarily Europe.
(2) Central items includes central fair value hedge accounting adjustments.
(3) 2022 comparatives have been restated to reflect the impact of IFRS 17.
See page 16.
GROUP RESULTS - STATUTORY BASIS
The results below are prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards (IFRSs).
The underlying results are shown on page 2.
Summary income statement Nine Nine Change
months months %
ended ended
30 Sep 30 Sep
2023 2022(1)
£m £m
Net interest income 10,111 9,354 8
Other income 9,958 (24,959)
Total income 20,069 (15,605)
Net finance (expense) income in respect of insurance and investment contracts (6,167) 27,026
Total income, after net finance (expense) income in respect of insurance and 13,902 11,421 22
investment contracts
Operating expenses (7,331) (6,640) (10)
Impairment (843) (1,056) 20
Profit before tax 5,728 3,725 54
Tax expense (1,444) (784) (84)
Profit for the period 4,284 2,941 46
Profit attributable to ordinary shareholders 3,840 2,538 51
Ordinary shares in issue (weighted-average - basic) 65,446m 69,478m (6)
Basic earnings per share 5.9p 3.7p 2.2p
(1) 2022 comparatives have been restated to reflect the impact of IFRS 17.
See page 16.
REVIEW OF PERFORMANCE(A)
Continued robust financial performance and consistent delivery
The Group's statutory profit after tax for the first nine months of 2023 was
£4,284 million, higher than the prior year which was impacted by IFRS 17
accounting changes. The Group's underlying profit for the first nine months of
2023 was £6,063 million, an increase of 14 per cent compared to £5,322
million in the prior year. Growth in net income and a lower impairment charge
was partly offset by higher operating costs. Underlying profit in the third
quarter was up 11 per cent compared to the second quarter, resulting from a
lower underlying impairment charge, largely due to an improved macroeconomic
outlook.
Net income of £13,700 million was up 7 per cent on the prior year, with
higher net interest income and other income, partially offset by an increased
charge for operating lease depreciation. Net interest income in the first nine
months of £10,448 million was up 10 per cent, driven by a stronger banking
net interest margin of 3.15 per cent (nine months to 30 September 2022:
2.84 per cent) and higher average interest-earning banking assets. The net
interest margin benefitted from UK Bank Rate increases and higher structural
hedge earnings from the rising rate environment, partly offset by deposit mix
effects and asset margin compression, particularly in the mortgage book.
Average interest-earning banking assets at £453.5 billion have modestly
increased compared to the first nine months of 2022, with growth in the open
mortgage book, Retail unsecured and the European retail business, largely
offset by closed mortgage book run-off and continued repayments of
government-backed lending. Net interest income in the first nine months of
2023 included non-banking interest expense of £231 million (nine months to
30 September 2022: £69 million), which continues to increase on the prior
year as a result of higher funding costs and growth in the Group's non-banking
businesses.
Net interest income in the third quarter of £3,444 million was stable versus
the second quarter, with a lower net interest margin of 3.08 per cent (three
months to 30 June 2023: 3.14 per cent) as expected and stable average interest
earning assets. As previously guided, the Group expects the banking net
interest margin for 2023 to be greater than 310 basis points. Average
interest-earning assets over 2023 are still expected to be down slightly
compared to the fourth quarter of 2022.
The Group manages the risk to earnings and capital from movements in interest
rates by hedging the net liabilities which are stable or less sensitive to
movements in rates. The nominal balance of the structural hedge was
£251 billion (31 December 2022: £255 billion) with a weighted-average
duration of approximately three-and-a-half years (31 December 2022:
approximately three-and-a-half years). The Group continues to review the
stability and mix of underlying deposits and their eligibility for the
structural hedge and, including the movement in the third quarter, expects a
modest nominal balance reduction by the end of 2023, consistent with guidance
at the half-year. The Group generated £2.5 billion of total income from
structural hedge balances in the first nine months of 2023, representing
material growth over the prior year (nine months to 30 September
2022: £1.9 billion). The Group continues to expect hedge earnings in 2023
to be c.£0.8 billion higher than in 2022.
Underlying other income in the first nine months of 2023 of £3,837 million
was 8 per cent higher compared to £3,538 million in the prior year. This was
driven by growth across Retail, Commercial Banking and Insurance, Pensions and
Investments. Underlying other income was 1 per cent higher in the third
quarter versus the second.
Retail other income for the first nine months increased due to higher current
account and credit card activity, improved Lex performance and growth from the
acquisition of Tusker. Growth within Commercial Banking reflected improved
performance in trading and capital markets financing. Insurance, Pensions and
Investments other income increased due to balance sheet growth from both new
business and the accounting unwind benefit of adding a drawdown feature in
2022 to existing long-standing and workplace pension business. In Equity
Investments and Central Items other income reflected a modest reduction in the
Group's equity investments businesses from more subdued market conditions.
The Group delivered good organic growth in Insurance, Pensions and Investments
and Wealth (reported within Retail) assets under administration (AuA), with
combined £5.6 billion net new money in open book AuA over the period. In
total, open book AuA now stand at c.£166 billion.
Operating lease depreciation of £585 million increased compared to the prior
year (nine months to 30 September 2022: £295 million). This reflects the
depreciation cost of higher value vehicles, the Tusker acquisition in the
first quarter and subsequent growth, lower gains on disposal and recent
declines in battery electric used car prices. These trends continued in the
third quarter resulting in 6 per cent higher operating lease depreciation
versus the second quarter. Operating lease depreciation continues to increase
towards more normalised levels, as expected.
REVIEW OF PERFORMANCE (continued)
Total costs, including remediation, of £6,788 million were 6 per cent higher
than in the prior year and stable in the third quarter of 2023 versus the
second. Operating costs were up 5 per cent to £6,654 million, with higher
planned strategic investment, new business costs and inflationary impacts,
partially mitigated by continued cost efficiency. The Group's cost:income
ratio for the first nine months of 2023 was 49.5 per cent, compared to
50.1 per cent in the prior year. Consistent with previous guidance, operating
costs are expected to be c.£9.1 billion in 2023.
The Group recognised remediation costs of £134 million in the first nine
months of 2023, largely in relation to pre-existing programmes (nine months to
30 September 2022: £89 million), with £64 million in the third quarter.
There have been no further charges relating to HBOS Reading and the provision
held continues to reflect the Group's best estimate of its full liability,
albeit uncertainties remain. Following the FCA's Motor Market review, the
Group continues to receive complaints and claims and is engaging with the
Financial Ombudsman Service in respect of past motor commission arrangements.
Discussions are continuing, with the remediation and financial impact, if any,
remaining uncertain.
Asset quality remains resilient with credit performance across portfolios
largely stable in the quarter and remaining similar or favourable to
pre-pandemic experience. The underlying impairment in the nine months was
£849 million, (nine months to 30 September 2022: £1,045 million), including
£187 million in the third quarter, resulting in an asset quality ratio of
25 basis points. The charge is after a net £69 million multiple economic
scenarios (MES) release in the first nine months (nine months to 30 September
2022: £513 million charge), including a £74 million release in the third
quarter, given modest revisions to the Group's economic outlook. Reflecting
the portfolio resilience, the Group now expects the asset quality ratio to be
less than 30 basis points in 2023.
The pre-updated MES impairment charge was £918 million in the period (nine
months to 30 September 2022: £532 million), equivalent to an asset quality
ratio of 27 basis points. This reflects only modest deterioration from a low
base, primarily in legacy variable rate UK mortgage portfolios and higher
charges on existing Stage 3 clients in Commercial Banking. It also includes
the impact of higher discount rates on future recoveries, as well as the
expected credit loss (ECL) allowance build from Stage 1 loans rolling forward
into a deteriorating economic outlook. The pre-updated MES asset quality ratio
of 23 basis points in the third quarter includes a calibration benefit from
the resilient performance in unsecured portfolios relative to expected adverse
impacts from higher unemployment and affordability pressures.
In UK mortgages, new to arrears are broadly stable in the third quarter.
Increases in flows to default driven by legacy variable rate customers have
also slowed, but remain slightly above pre-pandemic levels. Unsecured and
Commercial Banking portfolios continue to exhibit stable new to arrears and
default trends broadly at, or below, pre-pandemic levels. The Commercial Real
Estate portfolio is demonstrating resilience and is well diversified with no
speculative development lending. Committed drawn CRE lending stood at £11.0
billion as at 31 August 2023 (net of £3.4 billion exposures subject to
protection through Significant Risk Transfer (SRT) securitisations).
Stage 3 assets at £11.0 billion, have increased slightly in the third
quarter, although remain broadly flat relative to year end (31 December 2022:
£10.8 billion). Stage 2 assets have reduced in the year to £62.9 billion
(31 December 2022: £65.7 billion), with 92 per cent of Stage 2 loans up to
date (31 December 2022: 93 per cent). Movements in staged assets include the
impact from the exit of £2.5 billion of legacy Retail mortgage loans in the
first quarter, including a reduction of £0.9 billion in Stage 2 and
£0.4 billion in Stage 3.
Restructuring costs year to date are £69 million (nine months to 30 September
2022: £69 million) and include costs relating to the integration of Embark
and Tusker. Volatility and other items were a net loss of £266 million for
the first nine months of 2023 (nine months to 30 September 2022: net loss of
£1,528 million). This comprised negative market volatility and asset sales
of £145 million, £53 million for the amortisation of purchased intangibles
(nine months to 30 September 2022: £52 million) and £68 million relating
to fair value unwind (nine months to 30 September 2022: £90 million). Market
volatility and asset sales included negative impacts from insurance
volatility, partly offset by positive banking volatility. Volatility and other
items in 2022 included an exceptional charge under IFRS 17 from contract
modifications in Insurance, Pensions and Investments, predominantly in the
second half, following the addition of a drawdown feature to existing
long-standing and workplace pensions as a significant customer enhancement.
The Group's statutory profit before tax for the first nine months of 2023 was
£5,728 million, up from £3,725 million in the same period in 2022. Statutory
profit after tax was £4,284 million (nine months to 30 September
2022: £2,941 million). In the third quarter of the year, statutory profit
before tax was £1,858 million and statutory profit after tax was £1,420
million, both up on the second quarter.
REVIEW OF PERFORMANCE (continued)
The return on tangible equity for the first nine months of 2023 was 16.6 per
cent (nine months to 30 September 2022: 9.6 per cent), reflecting the
Group's robust financial performance. The Group expects the return on tangible
equity for 2023 to be greater than 14 per cent. Earnings per share were
5.9 pence in the period (nine months to 30 September 2022: 3.7 pence).
Tangible net assets per share as at 30 September 2023 were 47.2 pence,
slightly higher than 46.5 pence at 31 December 2022. The increase resulted
from higher profits, along with a reduction in the number of shares following
the share buyback programme, announced in February 2023, partly offset by a
negative market impact on the pensions accounting surplus, combined with
distributions. Tangible net assets per share were 1.5 pence higher than at 30
June 2023 given the higher profits, the reduction in the number of shares and
movements in the cash flow hedge reserve, partly offset by pensions surplus
changes and distributions. The share buyback programme in respect of 2022
completed on 25 August 2023, with c.4.4 billion (c.7 per cent) ordinary shares
repurchased.
Balance sheet
Loans and advances to customers fell by £2.8 billion in the first nine months
of 2023 to £452.1 billion, as a result of the exit of £2.5 billion of
legacy Retail mortgage loans (including £2.1 billion in the closed mortgage
book) during the first quarter. Excluding this, loans and advances to
customers were broadly stable, with £3.7 billion growth in other Retail
lending (principally unsecured and the European retail business) as well as
£1.3 billion growth in Corporate and Institutional Banking lending. This was
offset by a net reduction of £0.9 billion in the open mortgage book,
£1.4 billion in the closed mortgage book and a £3.5 billion reduction in
Small and Medium Businesses, largely from repayment of government-backed
lending. During the third quarter, loans and advances to customers grew by
£1.4 billion with increased balances in the open mortgage book, Retail
unsecured and the European retail business and foreign exchange movements in
Corporate and Institutional Banking.
Customer deposits at £470.3 billion decreased by £5.0 billion (1.0 per
cent) since the end of 2022. This includes decreases in Retail current account
balances of £9.4 billion as a result of tax payments, higher spend and a more
competitive savings market, including the Group's own savings offers. In
Retail savings and Wealth, balances have increased by a combined
£5.2 billion, partly from transfers from the Group's current account
customer base. Commercial Banking deposits were stable during the first nine
months of 2023, albeit with some move towards higher rate paying accounts. The
trend of deposit mix change in a higher rate environment was evident again in
the third quarter and is likely to continue in both Retail and Commercial
Banking. Overall, customer deposits in the third quarter increased by £0.5
billion, predominantly from flows into Retail savings, from both Retail
current accounts and new customers.
The Group has a large, high quality liquid asset portfolio held mainly in cash
and government bonds, with all assets hedged for interest rate risk. The
Group's liquid assets continue to significantly exceed regulatory requirements
and internal risk appetite, with a stable and strong liquidity coverage ratio
of 142 per cent (31 December 2022: 144 per cent) and a strong net stable
funding ratio of 130 per cent (31 December 2022: 130 per cent). The loan to
deposit ratio of 96 per cent, stable on 2022, continues to reflect robust
funding and liquidity and the potential for lending growth.
Capital
The Group's CET1 capital ratio at 30 September 2023 was 14.6 per cent (31
December 2022: 14.1 per cent pro forma). Capital generation before regulatory
headwinds during the first nine months was 165 basis points (54 basis points
in the third quarter), primarily reflecting strong banking build, partially
offset by risk-weighted asset increases (before CRD IV model changes) and the
full year payment (£800 million) of fixed pension deficit contributions made
to the Group's three main defined benefit pension schemes. Regulatory
headwinds of 36 basis points largely reflect an adjustment for part of the
anticipated impact of CRD IV model updates. These are not yet finalised. They
also reflect the end of IFRS 9 static transitional relief and the reduction in
the transitional factor applied to IFRS 9 dynamic relief. Capital generation
after the impact of these headwinds was 129 basis points. The impact of the
interim ordinary dividend paid and the foreseeable ordinary dividend accrual
equated to 65 basis points. The acquisition of Tusker utilised 21 basis points
of capital.
The Group continues to expect 2023 capital generation to be c.175 basis points
after in-year regulatory headwinds (comprising CRD IV and transitional
headwinds).
REVIEW OF PERFORMANCE (continued)
Risk-weighted assets have increased by £6.8 billion during the first nine
months of the year to £217.7 billion at 30 September 2023 (31 December
2022: £210.9 billion). This includes the adjustment noted above for CRD IV
model updates. Excluding this, lending and market risk increases, a modest
uplift from credit and model calibrations and other movements, were partly
offset by capital efficient securitisation and other optimisation activity.
The CRD IV model updates reflect a further iteration of model development.
The models remain subject to further development and final approval by the
PRA. On that basis final impacts remain uncertain and further increases are
likely to be required. The Group's risk-weighted assets guidance remains
unchanged at between £220 billion and £225 billion at the end of 2024.
In July 2023 the Group's countercyclical capital buffer (CCyB) rate increased
to around 1.8 per cent (from 0.9 per cent) in total following the increase in
the UK CCyB rate to 2 per cent (from 1 per cent). As a result, the Group's
regulatory CET1 capital requirement is now around 12 per cent. The Board's
view of the ongoing level of CET1 capital required to grow the business, meet
current and future regulatory requirements and cover uncertainties continues
to be around 12.5 per cent, plus a management buffer of around 1 per cent.
Pensions
The Group has substantially agreed the triennial valuation as at 31 December
2022 for the Group's three main defined benefit pension schemes with the
Trustee. After allowing for the fixed contribution of £800 million in the
first half of 2023, there is a residual aggregate deficit of £250 million.
The Group has agreed to pay off this deficit by the end of March 2024.
Thereafter there will be no further contributions, fixed or variable, for this
triennial period.
ADDITIONAL INFORMATION
CAPITAL GENERATION
Pro forma CET1 ratio as at 31 December 2022(1) 14.1%
Banking build (including impairment charge) (bps) 192
Risk-weighted assets (bps) (28)
Fixed pension deficit contributions (bps) (30)
Other movements (bps) 31
Capital generation (bps) 165
CRD IV and transitional headwinds (bps)(2) (36)
Capital generation (post CRD IV and transitional headwinds) (bps) 129
Tusker acquisition (bps) (21)
Ordinary dividend (bps) (65)
CET1 ratio as at 30 September 2023 14.6%
(1) 31 December 2022 reflects the interim ordinary dividend received from
the Insurance business in February 2023 and the full impact of the announced
share buyback, but excludes the impact of the phased unwind of IFRS 9 relief
on 1 January 2023.
(2) Phased unwind of IFRS 9 relief and an adjustment for the anticipated
impact of CRD IV models.
IMPAIRMENT DETAIL
Nine Nine Change Three Three Change
months
months
ended months %
ended months %
30 Sep
30 Sep
2023 ended
2023 ended
£m
£m
30 Sep 30 Sep
2022 2022
£m £m
Charges pre-updated MES(1)
Retail 787 520 (51) 236 235
Commercial Banking 139 1 31 8
Other (8) 11 (6) 7
918 532 (73) 261 250 (4)
Updated economic outlook
Retail (30) 541 (71) 370
Commercial Banking (39) 372 (3) 248
Other - (400) - (200)
(69) 513 (74) 418
Underlying impairment charge(A) 849 1,045 19 187 668 72
Asset quality ratio(A) 0.25% 0.30% (5)bp 0.17% 0.57% (40)bp
Total expected credit loss allowance(A) 5,389 5,017 (7)
(at end of period)
(1) Impairment charges excluding the impact from updated economic outlook
taken each quarter.
(
)
ADDITIONAL INFORMATION (continued)
IMPAIRMENT DETAIL (continued)
Loans and advances to customers and expected credit loss allowance (underlying
basis)(A)
At 30 September 2023 Stage 1 Stage 2 Stage 3 Total Stage 2 Stage 3
£m £m £m £m as % of as % of
total total
Loans and advances to customers
UK mortgages 254,680 46,382 6,928 307,990 15.1 2.2
Credit cards 12,154 3,277 308 15,739 20.8 2.0
Loans and overdrafts 9,172 1,729 240 11,141 15.5 2.2
UK Motor Finance 12,985 2,246 113 15,344 14.6 0.7
Other 15,460 525 146 16,131 3.3 0.9
Retail(1) 304,451 54,159 7,735 366,345 14.8 2.1
Small and Medium Businesses 28,543 4,705 1,475 34,723 13.6 4.2
Corporate and Institutional Banking 52,874 3,993 1,745 58,612 6.8 3.0
Commercial Banking 81,417 8,698 3,220 93,335 9.3 3.4
Equity Investments and Central Items(2) (2,579) - 6 (2,573)
Total gross lending 383,289 62,857 10,961 457,107 13.8 2.4
ECL allowance on drawn balances (848) (1,750) (2,430) (5,028)
Net balance sheet carrying value 382,441 61,107 8,531 452,079
Customer related ECL allowance (drawn and undrawn)
UK mortgages 149 628 855 1,632
Credit cards 202 428 130 760
Loans and overdrafts 211 332 131 674
UK Motor Finance(3) 119 77 57 253
Other 21 20 49 90
Retail(1) 702 1,485 1,222 3,409
Small and Medium Businesses 131 232 180 543
Corporate and Institutional Banking 163 200 1,026 1,389
Commercial Banking 294 432 1,206 1,932
Equity Investments and Central Items - - 4 4
Total 996 1,917 2,432 5,345
Customer related ECL allowance (drawn and undrawn) as a percentage of loans
and advances to customers(4)
UK mortgages 0.1 1.4 12.3 0.5
Credit cards 1.7 13.1 52.8 4.8
Loans and overdrafts 2.3 19.2 67.2 6.1
UK Motor Finance 0.9 3.4 50.4 1.6
Other 0.1 3.8 33.6 0.6
Retail(1) 0.2 2.7 16.0 0.9
Small and Medium Businesses 0.5 4.9 15.6 1.6
Corporate and Institutional Banking 0.3 5.0 58.8 2.4
Commercial Banking 0.4 5.0 41.6 2.1
Equity Investments and Central Items 66.7
Total 0.3 3.0 23.1 1.2
(1 ) Retail balances exclude the impact of the HBOS
acquisition-related adjustments.
(2 ) Contains centralised fair value hedge accounting adjustments.
(3 ) UK Motor Finance for Stages 1 and 2 include £116 million relating
to provisions against residual values of vehicles subject to finance leasing
agreements. These provisions are included within the calculation of coverage
ratios.
(4 ) Total and Stage 3 ECL allowances as a percentage of drawn balances
exclude loans in recoveries in Credit cards of £62 million, Loans and
overdrafts of £45 million and Small and Medium Businesses of £321 million.
ADDITIONAL INFORMATION (continued)
IMPAIRMENT DETAIL (continued)
Loans and advances to customers and expected credit loss allowance (underlying
basis)(A) (continued)
At 31 December 2022 Stage 1 Stage 2 Stage 3 Total Stage 2 Stage 3
£m £m £m £m as % of as % of
total total
Loans and advances to customers
UK mortgages 259,843 46,347 6,529 312,719 14.8 2.1
Credit cards 11,416 3,287 289 14,992 21.9 1.9
Loans and overdrafts 8,357 1,713 247 10,317 16.6 2.4
UK Motor Finance 12,174 2,245 154 14,573 15.4 1.1
Other 13,990 643 157 14,790 4.3 1.1
Retail(1) 305,780 54,235 7,376 367,391 14.8 2.0
Small and Medium Businesses 30,781 5,654 1,760 38,195 14.8 4.6
Corporate and Institutional Banking 49,728 5,839 1,611 57,178 10.2 2.8
Commercial Banking 80,509 11,493 3,371 95,373 12.1 3.5
Equity Investments and Central Items(2) (2,972) - 6 (2,966)
Total gross lending 383,317 65,728 10,753 459,798 14.3 2.3
ECL allowance on drawn balances (700) (1,936) (2,263) (4,899)
Net balance sheet carrying value 382,617 63,792 8,490 454,899
Customer related ECL allowance (drawn and undrawn)
UK mortgages 92 681 817 1,590
Credit cards 173 477 113 763
Loans and overdrafts 185 367 126 678
UK Motor Finance(3) 95 76 81 252
Other 16 18 52 86
Retail(1) 561 1,619 1,189 3,369
Small and Medium Businesses 129 271 149 549
Corporate and Institutional Banking 144 231 925 1,300
Commercial Banking 273 502 1,074 1,849
Equity Investments and Central Items - - 4 4
Total 834 2,121 2,267 5,222
Customer related ECL allowance (drawn and undrawn) as a percentage of loans
and advances to customers(4)
UK mortgages - 1.5 12.5 0.5
Credit cards 1.5 14.5 50.9 5.1
Loans and overdrafts 2.2 21.4 64.6 6.6
UK Motor Finance 0.8 3.4 52.6 1.7
Other 0.1 2.8 33.1 0.6
Retail(1) 0.2 3.0 16.4 0.9
Small and Medium Businesses 0.4 4.8 12.9 1.5
Corporate and Institutional Banking 0.3 4.0 57.5 2.3
Commercial Banking 0.3 4.4 38.9 2.0
Equity Investments and Central Items 66.7
Total 0.2 3.2 22.6 1.1
(1 ) Retail balances exclude the impact of the HBOS acquisition-related
adjustments.
(2 ) Contains centralised fair value hedge accounting adjustments.
(3 ) UK Motor Finance for Stages 1 and 2 include £92 million relating to
provisions against residual values of vehicles subject to finance leasing
agreements. These provisions are included within the calculation of coverage
ratios.
(4 ) Total and Stage 3 ECL allowances as a percentage of drawn balances
exclude loans in recoveries in Credit cards of £67 million, Loans and
overdrafts of £52 million, Small and Medium Businesses of £607 million and
Corporate and Institutional Banking of £1 million.
(
)
ADDITIONAL INFORMATION (continued)
IMPAIRMENT DETAIL (continued)
Total ECL allowance by scenario (underlying basis)(A)
The table below shows the Group's ECL for the probability-weighted, upside,
base case, downside and severe downside scenarios, the severe downside
scenario incorporating adjustments made to CPI inflation and UK Bank Rate
paths.
Probability- Upside Base case Downside Severe
weighted £m £m £m downside
£m £m
At 30 September 2023 5,389 3,986 4,733 5,884 10,076
At 31 December 2022 5,284 3,903 4,593 5,773 10,032
Base case and MES economic assumptions
The Group's base case scenario is for slow gross domestic product growth
alongside a gradual rise in the unemployment rate. Past increases in UK Bank
Rate in response to persistent inflationary pressures result in further
declines in residential and commercial property prices. Risks around this base
case economic view lie in both directions and are largely captured by the
range of alternative economic scenarios.
The Group 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 in the
third quarter of 2023. Actuals for this period, or restatements of past data,
may have since emerged prior to publication.
The Group's approach to generating alternative economic scenarios is set out
in detail in note 19 to the financial statements for the year ended 31
December 2022. For September 2023, the Group continues to judge it appropriate
to include a non-modelled severe downside scenario for Group ECL calculations.
This adjusted scenario is considered to better reflect the risks around the
Group's base case view in an economic environment where past supply shocks
continue to unwind slowly, implying the prospect of more persistent inflation
and corresponding need for tighter monetary policy.
UK economic assumptions - base case scenario by quarter
Key quarterly assumptions made by the Group in the base case scenario are
shown below. Gross domestic product is presented quarter-on-quarter. House
price growth, commercial real estate price growth and CPI inflation are
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 September 2023 First Second Third Fourth First Second Third Fourth
quarter quarter quarter quarter quarter quarter quarter quarter
2023 2023 2023 2023 2024 2024 2024 2024
% % % % % % % %
Gross domestic product 0.1 0.2 0.1 0.1 0.1 0.1 0.1 0.2
Unemployment rate 3.9 4.2 4.5 4.7 4.8 4.9 5.0 5.0
House price growth 1.6 (2.6) (5.8) (4.7) (8.5) (8.7) (5.7) (2.4)
Commercial real estate price growth (18.8) (21.2) (19.7) (4.2) (1.2) (2.2) 1.3 1.0
UK Bank Rate 4.25 5.00 5.25 5.25 5.25 5.25 5.25 5.00
CPI inflation 10.2 8.4 6.7 5.2 4.7 3.7 4.1 3.9
UK economic assumptions - scenarios by year
Key annual assumptions made by the Group are shown below. Gross domestic
product 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 within the period.
Unemployment rate and UK Bank Rate are averages for the period.
ADDITIONAL INFORMATION (continued)
IMPAIRMENT DETAIL (continued)
Base case and MES economic assumptions (continued)
At 30 September 2023 2023 2024 2025 2026 2027 2023-2027
% % % % % average
%
Upside
Gross domestic product 0.8 2.0 1.5 1.8 2.1 1.6
Unemployment rate 3.9 2.9 2.8 3.1 3.1 3.1
House price growth (3.4) 1.4 9.5 9.7 7.6 4.8
Commercial real estate price growth (0.4) 9.5 3.2 2.3 2.0 3.3
UK Bank Rate 5.06 6.61 6.27 5.76 5.59 5.86
CPI inflation 7.6 4.2 3.4 3.2 3.6 4.4
Base case
Gross domestic product 0.4 0.5 1.0 1.7 2.1 1.2
Unemployment rate 4.3 4.9 5.1 5.1 5.0 4.9
House price growth (4.7) (2.4) 2.3 4.0 4.1 0.6
Commercial real estate price growth (4.2) 1.0 0.5 1.2 1.8 0.0
UK Bank Rate 4.94 5.19 4.38 3.75 3.50 4.35
CPI inflation 7.6 4.1 2.9 2.1 2.3 3.8
Downside
Gross domestic product 0.0 (1.4) 0.5 1.7 2.2 0.6
Unemployment rate 4.8 7.1 7.5 7.4 7.0 6.7
House price growth (5.7) (5.6) (4.5) (2.0) 0.2 (3.6)
Commercial real estate price growth (7.7) (7.7) (3.0) (1.1) 0.3 (3.9)
UK Bank Rate 4.83 3.69 2.34 1.61 1.27 2.75
CPI inflation 7.6 4.0 2.4 1.1 0.9 3.2
Severe downside
Gross domestic product (0.4) (3.1) 0.1 1.5 2.1 0.0
Unemployment rate 5.4 9.8 10.5 10.1 9.5 9.1
House price growth (7.4) (10.1) (12.9) (9.4) (5.4) (9.1)
Commercial real estate price growth (12.9) (19.3) (9.4) (5.6) (2.3) (10.1)
UK Bank Rate - modelled 4.66 1.87 0.42 0.13 0.05 1.42
UK Bank Rate - adjusted(1) 5.44 7.00 4.94 3.88 3.50 4.95
CPI inflation - modelled 7.6 3.8 1.6 (0.3) (0.9) 2.4
CPI inflation - adjusted(1) 8.1 6.3 5.4 4.2 3.9 5.6
Probability-weighted
Gross domestic product 0.4 0.0 0.9 1.7 2.1 1.0
Unemployment rate 4.4 5.5 5.7 5.7 5.5 5.3
House price growth (4.9) (3.0) 0.9 2.6 3.0 (0.3)
Commercial real estate price growth (5.0) (1.1) (0.7) 0.1 1.0 (1.2)
UK Bank Rate - modelled 4.91 4.83 3.94 3.35 3.11 4.03
UK Bank Rate - adjusted(1) 4.99 5.35 4.39 3.72 3.46 4.38
CPI inflation - modelled 7.6 4.1 2.8 1.9 2.0 3.7
CPI inflation - adjusted(1) 7.7 4.3 3.2 2.3 2.4 4.0
(1) The adjustment to UK Bank Rate and CPI inflation in the severe downside
is considered to better reflect the risks around the Group's base case view in
an economic environment where supply shocks are the principal concern.
ALTERNATIVE PERFORMANCE MEASURES
The statutory results are supplemented with a number of metrics that are used
throughout the banking and insurance industries on an underlying basis. A
description of these measures and their calculation, which remain unchanged
since the year-end, is set out on pages 27 to 32 of the Group's 2023 Half-Year
Results News Release.
Nine Nine
months months
ended ended
30 Sep 30 Sep
2023 2022(1)
Banking net interest margin(A)
Underlying net interest income (£m) 10,448 9,529
Remove non-banking underlying net interest expense (£m) 231 69
Banking underlying net interest income (£m) 10,679 9,598
Statutory net loans and advances to customers (£bn) 452.1 456.3
Add back expected credit loss allowance (drawn) (£bn) 4.7 4.3
Add back acquisition related fair value adjustments (£bn) 0.3 0.4
Underlying gross loans and advances to customers (£bn) 457.1 461.0
Adjustment for non-banking and other items:
Fee-based loans and advances (£bn) (8.6) (8.1)
Other (£bn) 6.0 4.4
Interest-earning banking assets (£bn) 454.5 457.3
Averaging (£bn) (1.0) (5.9)
Average interest-earning banking assets (£bn)(A) 453.5 451.4
Banking net interest margin(A) 3.15% 2.84%
(1) 2022 comparatives have been restated to reflect the impact of IFRS 17.
See page 16.
Nine Nine
months months
ended ended
30 Sep 30 Sep
2023 2022(1)
Return on tangible equity(A)
Profit attributable to ordinary shareholders (£m) 3,840 2,538
Average ordinary shareholders' equity (£bn) 38.5 42.1
Remove average goodwill and other intangible assets (£bn) (7.6) (6.6)
Average tangible equity (£bn) 30.9 35.5
Return on tangible equity(A) 16.6% 9.6%
(1) 2022 comparatives have been restated to reflect the impact of IFRS 17.
See page 16.
KEY DATES
Target our Corporate and Institutional offering investor seminar 28 November 2023
Full year results for 2023 22 February 2024
BASIS OF PRESENTATION
This release covers the results of Lloyds Banking Group plc together with its
subsidiaries (the Group) for the nine months ended 30 September 2023. Unless
otherwise stated, income statement commentaries throughout this document
compare the nine months ended 30 September 2023 to the nine months ended 30
September 2022 and the balance sheet analysis compares the Group balance sheet
as at 30 September 2023 to the Group balance sheet as at 31 December 2022.
The Group uses a number of alternative performance measures, including
underlying profit, in the discussion of its business performance and financial
position. These measures are labelled with a superscript 'A' throughout this
document. Further information on these measures is set out on page 15. Unless
otherwise stated, commentary on page 1 is given on an underlying basis. The
Group's Q3 2023 Interim Pillar 3 Disclosures can be found at:
www.lloydsbankinggroup.com/investors/financial-downloads.html.
Implementation of IFRS 17: The Group adopted the IFRS 17 Insurance Contracts
accounting standard from 1 January 2023. IFRS 17 does not require that
comparatives are restated other than for the year, including interim periods,
immediately prior to adoption. The Group has selected a transition date of 1
January 2022 and, as permitted by IFRS 17, will not restate comparatives for
earlier periods. Further information on the impact of this change is set out
in the Group's IFRS 17 Transition Document, which was published on 4 April
2023 and can be found at:
www.lloydsbankinggroup.com/investors/financial-downloads.html.
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 Banking Group 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; expectations about the impact of COVID-19; 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, 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; political instability
including as a result of any UK general election and any further possible
referendum on Scottish independence; acts of hostility or terrorism and
responses to those acts, or other such events; geopolitical unpredictability;
the war between Russia and Ukraine; the tensions between China and Taiwan;
market related risks, trends and developments; exposure to counterparty risk;
instability in the global financial markets, including within the Eurozone,
and 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; tightening of monetary
policy in jurisdictions in which the Group operates; natural pandemic
(including but not limited to the COVID-19 pandemic) and other disasters;
risks concerning borrower and counterparty credit quality; risks affecting
insurance business and defined benefit pension schemes; risks related to the
uncertainty surrounding the integrity and continued existence of reference
rates; 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; 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), 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; assumptions and estimates that form the
basis of the Group's financial statements; and potential changes in dividend
policy. A number of these influences and factors are beyond the Group's
control. Please refer to 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
Edward Sands
Director of Investor Relations
020 7356 1585
edward.sands@lloydsbanking.com
Nora Thoden
Director of Investor Relations - ESG
020 7356 2334
nora.thoden@lloydsbanking.com
CORPORATE AFFAIRS
Grant Ringshaw
External Relations Director
020 7356 2362
grant.ringshaw@lloydsbanking.com
Matt Smith
Head of Media Relations
07788 352 487
matt.smith@lloydsbanking.com
Copies of this News Release may be obtained from:
Investor Relations, Lloyds Banking Group plc, 25 Gresham Street, London EC2V
7HN
The statement can also be found on the Group's website -
www.lloydsbankinggroup.com
Registered office: Lloyds Banking Group plc, The Mound, Edinburgh, EH1 1YZ
Registered in Scotland No. SC095000
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