Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — UBS Global Financial Services Conference 2009
19 slides from Lloyds Banking's conference presentation, May 12, 2009
Slide 1: UBS Global Financial Services Conference
UBS GLOBAL FINANCIAL SERVICES CONFERENCE 12 May 2009 New York Tim Tookey Group Finance Director
Slide 2: Overview
OVERVIEW Strongly capitalised De-risked balance sheet Significant synergy opportunities Opportunity to redeploy capital Diverse funding sources with an improving maturity profile Experienced management team A compelling case for long term growth 2
Slide 3: Driving a Smooth Integration Process
DRIVING A SMOOTH INTEGRATION PROCESS Pre-acquisition Appointed executive management team Comprehensive due diligence completed Over 7,000 tasks undertaken Strong initial view of synergies 16 JANUARY 2009 – ACQUISITION COMPLETED Post-acquisition Appointed Top 500 executives – now managing c
Slide 4: The UK's Leading Financial Services Company
THE UK’S LEADING FINANCIAL SERVICES COMPANY Lloyds TSB HBOS Lloyds Banking Group Share Position Share Position Share Position Current accounts 17% #1 14% #4 31% #1 Savings 8% #5 15% #2 23% #1 Credit cards 12% #3 12% #3 24% #1 Mortgages 11% #4 19% #1 30% #1 Personal lending 14% #1 5% #3 19% #1 SME’s
Slide 5: Core Businesses Will Drive Low Risk Growth
CORE BUSINESSES WILL DRIVE LOW RISK GROWTH 2008 Pro forma: core vs non-core* (£bn) Growth drivers 21.6 2.3 Growth in core markets 19.3 8.3 Cost synergies 4.5 Revenue synergies 6.5 Redeployed capital Normalised impairments Total Non-core Core Core Core Core profit † income revenue revenues
Slide 6: Strong Progress on Delivering Cost Synergy Value
STRONG PROGRESS ON DELIVERING COST SYNERGY VALUE Delivery 2011 run rate commenced 1. Procurement rationalisation 300 9 2. Business unit consolidation 200 9 3. Rationalisation of IT 130 9 4. Management & support (ex branch) 115 9 5. Business discontinuance 100 9 c.845 c.55% of total run rate 6
Slide 7: We Have Identified Significant Revenue Synergies
WE HAVE IDENTIFIED SIGNIFICANT REVENUE SYNERGIES Preliminary estimate Selected examples PBT impact (£m) 1. Increasing cross-sell in HBOS retail 80 – 120 2. Conversion of HBOS retail customers to SME 80 – 120 3. Increase cross-sell in HBOS commercial 40 – 80 4. Extend private banking services to Lloy
Slide 8: The Economic Environment Will Remain Difficult
THE ECONOMIC ENVIRONMENT WILL REMAIN DIFFICULT GDP growth forecast 2009 (%) Consensus vs Lloyds Banking Group House prices will continue to fall (0.2) through 2009 (1.6) Unemployment will (2.6) (2.5) continue to rise (3.0) (3.3) Consumer spending will slow further Oct 2008 Feb 2009 Mar 2009 Co
Slide 9: Understanding the HBOS Loan Book
UNDERSTANDING THE HBOS LOAN BOOK £bn Retail Corporate International Total Total loans 255 116 61 432 Outside Lloyds TSB ~65 ~80 ~20 ~165 risk appetite 9
Slide 10: Group Wide Actions Taken to Manage Risk
GROUP WIDE ACTIONS TAKEN TO MANAGE RISK In divisions At Group level Stopped flow of new high risk Applying Lloyds TSB risk lending governance, appetite and sanctioning Identified the higher risk assets Conducting central checks of Undertaking detailed review of divisional risk activities t
Slide 11: Asset Protection Scheme – Key Details
ASSET PROTECTION SCHEME – KEY DETAILS De-risks circa £260 billion Group The initial portfolio comprises: assets £bn Approximately £194 billion RWA relief Retail – mortgages 74 Retail – unsecured personal loans 18 Increases pro-forma adjusted* core tier 1 capital ratio to 14.5%, Corporate/Comme
Slide 12: A Significantly De-risked and Improved Capital Position
A SIGNIFICANTLY DE-RISKED AND IMPROVED CAPITAL POSITION At 31 December 2008 Before* After* Change Risk-weighted assets (£bn) 498 304 (39%) Core tier 1 capital (£bn)† 32.1 44.0 37% Core tier 1 capital ratio (%)† 6.4 14.5 +810bps Tier 1 capital (£bn) 48.8 56.7 16% Tier 1 capital ratio (%) 9.8 18.7 +89
Slide 13: A Diverse Funding Profile
A DIVERSE FUNDING PROFILE Core customer deposit base Diverse wholesale funding profile Measured use of Government schemes Strong funding and liquidity Significant Central Bank eligible collateral profile Continuing full access to global markets Extending maturity 13
Slide 14: Diverse Funding Sources with Prudent Maturity Profile
DIVERSE FUNDING SOURCES WITH PRUDENT MATURITY PROFILE 31 Dec 31 Dec £bn 2008 2008 Bank deposits 41.6 Customer deposits 72.7 Less than one year 285.9 Certificates of deposit 72.4 Medium-term notes 61.5 Covered bonds 29.1 One to two years 30.9 Commercial paper 28.8 Securitisation 45.6 Two to five year
Slide 15: Interim Management Statement – May 2009
INTERIM MANAGEMENT STATEMENT – 7 MAY 2009 A good revenue performance Some net interest margin erosion Strong cost management, with first quarter costs marginally lower than last year Corporate impairment levels are rising significantly. Vast majority covered by Asset Protection Scheme Exce
Slide 16: Summary
SUMMARY Market leading positions throughout the UK Financial Services market – a powerful franchise Strengthened capital base Significantly de-risked balance sheet Excellent synergy opportunities, both cost and revenue Substantial opportunity to redirect capital to more productive areas
Slide 17: Disclaimer
DISCLAIMER This presentation does not constitute an offer to sell, or a solicitation of an offer to subscribe for, the securities being issued in any jurisdiction in which such offer or solicitation is unlawful. This presentation is not for distribution, directly or indirectly, in or into Australia,
Slide 18: Disclaimer
DISCLAIMER Examples of such forward looking statements include, but are not limited to, projections or expectations of the Group’s future financial position including profit attributable to shareholders, provisions, economic profit, dividends, capital structure, expenditures or any other financial i
Slide 19: UBS Global Financial Services Conference
UBS GLOBAL FINANCIAL SERVICES CONFERENCE 12 May 2009 New York Tim Tookey Group Finance Director
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