Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — Q3 2024 Earnings Presentation
18 slides from Lloyds Banking's earnings presentation, Oct 23, 2024
Slide 1: Q3 Interim Management Statement
Q3 Interim Management Statement Lloyds Banking Group 23 October 2024
Slide 2: Helping Britain Prosper
Purpose driven strategy benefitting all stakeholders Purpose Helping • Strategic transformation building momentum, delivering for customers Britain • Robust financial performance Prosper • Reaffirming 2024 guidance; confident in 2026 2
Slide 3: Robust financial performance
Robust financial performance Financial summary (£m) Q3 2024 Q3 2023 YoY Q3 Q2 QoQ YTD YTD % 2024 2024 % Net interest income 9,569 10,448 (8) 3,231 3,154 2. • YTD statutory PAT £3.8bn; RoTE 14.0% Other income 4,164 3,837 9. 1,430 1,394 3. Operating lease depreciation (994) (585) (70) (315) (396) 20.
Slide 4: Continued growth in customer franchise
Continued growth in customer franchise Q3 lending increase (£bn) Q3 deposit increase (£bn) Retail Commercial Retail Commercial +£3.5bn/1% -£0.2bn/0% +£1.7bn/1% -£0.5bn/0% • Group lending £457.0bn, up £4.6bn in Q3; up 2% YTD o Retail up £3.5bn in Q3; Mortgages up £3.2bn o Growth in Credit Cards and U
Slide 5: Income growth across NII and OOI
Income growth across NII and OOI Net interest income and banking margin (bps) £3.15bn £3.23bn • Q3 NII £3.2bn, up 2% QoQ 10 o NIM 295bps, up 2bps QoQ (4) (1) o Q3 AIEAs £451.1bn, up £1.7bn QoQ; YTD £449.9bn (3) 295 293 o Q3 non-banking NII charge £118m, stable vs. Q2 • Structural hedge notional £242
Slide 6: Continued cost discipline
Continued cost discipline Operating costs (£bn) +4% (+2% ex. accelerated severance) 0.1 0.1 0.1 7.0 0.3 6.9 • Q3 operating costs £2.3bn, stable on Q2 6.7 • YTD operating costs £7.0bn, up 5% YoY, 4% (0.3) excluding BoE levy o Includes accelerated severance taken YTD Q3 2023 Cost Pay & Investment, Oth
Slide 7: Strong asset quality
Strong asset quality Impairment (£m) Q3 2024 Q3 2023 YoY Q3 Q2 QoQ YTD YTD £m 2024 2024 £m Charge (credit) pre updated MES1 597 918 (321) 172 176 (4) Retail 592 787 (195) 129 160 (31) • Strong asset quality, reflected in continued resilient Commercial Banking 16 139 (123) 44 21 23 Group credit perfo
Slide 8: Robust RoTE, TNAV building
Robust RoTE, TNAV building Statutory profit (£m) Q3 2024 Q3 2023 YoY Q3 Q2 QoQ YTD YTD % 2024 2024 % Underlying profit 5,350 6,063 (12) 1,853 1,740 6 • Q3 RoTE 15.2%; YTD 14.0% Restructuring (21) (69) 70 (6) (3) (100) • Q3 restructuring £6m, YTD £21m Volatility and other items (182) (266) 32 (24) (4
Slide 9: Strong capital generation in line with expectations
Strong capital generation in line with expectations Risk weighted assets (£bn) 2.4 0.7 0.8 4.6 (4.3) 223.3 • Strong YTD capital generation of 132bps 219.1 • RWAs £223.3bn, up £4.2bn YTD, incl. £1.3bn in Q3 o Lending offset by optimisation Q4 2023 Underlying Credit / CRD IV1 Market risk Optimisation
Slide 10: Helping Britain Prosper
Purpose driven strategy benefitting all stakeholders Purpose Helping • Strategic transformation building momentum, delivering for customers Britain • Robust financial performance Prosper • Reaffirming 2024 guidance; confident in 2026 10
Slide 11: Q&A
Q&A 11
Slide 12: Appendix
Appendix 12
Slide 13: 2024 and 2026 guidance
2024 and 2026 guidance 2024 2026 Income NIM >290bps c.£9.4bn operating costs inc c.£0.1bn Costs <50% cost:income ratio BoE levy Asset quality ratio <20bps Return on tangible equity c.13% >15% Risk weighted assets £220bn - £225bn Capital generation c.175bps >200bps Capital target Expect to pay down t
Slide 14: Consistently reassuring performance across portfolios
Consistently reassuring performance across portfolios New to arrears (3 month rolling average, %) 1.00% • Improvement in Mortgages new to arrears and 0.75% default rates in Q3 and YTD; average LTV 43% 0.50% • Resilient performance in other portfolios 0.25% • Stable SME working capital utilisation tr
Slide 15: Quarterly P&L and key ratios
Quarterly P&L and key ratios (£m) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Net interest income 3,231 3,154 3,184 3,317 3,444 3,469 3,535 Other income 1,430 1,394 1,340 1,286 1,299 1,281 1,257 Operating lease depreciation (315) (396) (283) (371) (229) (216) (140) Net income 4,346 4,152
Slide 16: Updated economic scenarios
Updated economic scenarios Scenario ECL1 (£m) Measure (%) 2024 vs. Q2 2024 2025 2026 2027 2028 Ave. 24-28 GDP 1.2 0.1 2.4 1.9 1.5 1.4 1.7 Unemployment rate 4.2 0.1 3.3 2.8 2.7 2.8 3.1 HPI growth 3.5 1.3 4.6 7.1 6.4 5.1 5.3 Upside (30%) 2,806 CRE price growth 1.6 (0.6) 9.0 4.2 1.8 0.7 3.4 UK Bank Rat
Slide 17: Investor relations contacts
Investor relations contacts Douglas Radcliffe, Group Investor Relations Director +44 (0)20 7356 1571 Douglas.Radcliffe@lloydsbanking.com Nora Thoden, Director, Investor Relations – ESG +44 (0)20 7356 2334 Nora.Thoden@lloydsbanking.com Sarah Robson, Senior Manager, Investor Relations +44 (0)7494 513
Slide 18: Disclaimer
Disclaimer Important notice The information, statements, views and opinions contained in this document and accompanying discussion (“this Presentation”) are for informational and reference purposes only. This Presentation has been provided by the Group (defined below). This Presentation does not pur