Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — Debt Investor Presentation (2019)
27 slides from Lloyds Banking's debt investor presentation, 2019
Slide 1: Fixed Income Investor Presentation FY 2018
FIXED INCOME INVESTOR PRESENTATION FY 2018
Slide 2: Group Overview & Strategy
LLOYDS Group Overview & Strategy
Slide 3: New Group structure with multiple issuance points across products and currencies
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity New Group structure with multiple issuance points across products and currencies • Over 95% of Group loans & advances within Ring- HoldCo Fenced sub-group Main Entities Lloyds Banking Group • Capital and MREL issued out of HoldCo
Slide 4: Well diversified loan book of £444.4bn
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Well diversified loan book of £444.4bn YE2018 Loans & Advances (£bn, %) Commercial Banking other, £4bn, 1% Wealth and other, £4bn, 1% Global Corporates and Financial Institutions, £34bn, 8% Mid Markets, £32bn, 7% • Retail lending
Slide 5: Opportunities for growth in targeted key segments
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Opportunities for growth in targeted key segments Iconic brands Strong franchise across key channels and products Channels market share Digital new business volumes(1) 21% Branch new business volumes(1) 20% Number of branches(2)
Slide 6: Clear strategic plan, delivering new sources of competitive advantage
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Clear strategic plan, delivering new sources of competitive advantage and future proofing our business model • Number of deliverables achieved within first 12 months: OUR Helping Britain Prosper PURPOSE - Largest digital bank in
Slide 7: UK economy remains resilient despite heightened uncertainty
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity UK economy remains resilient despite heightened uncertainty GDP and investment growth(1) CPI inflation and pay growth(1) (%) (%) 2 4 1 3 +1% 0 2 -1 1 -2 0 2016 2017 2018 2016 2017 2018 GDP Business investment CPI inflation Regula
Slide 8: A number of key opportunities exist in 2019
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity A number of key opportunities exist in 2019, building on our progress to date • Well positioned to accelerate strategic delivery: OUR Helping Britain Prosper - Open Banking aggregation functionality extended to all active PURPOSE
Slide 9: 2018 Results
LLOYDS 2018 Results
Slide 10: Strong financial performance with continued growth in profits and returns
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Strong financial performance with continued growth in profits and returns Statutory profit after £4.4bn tax +24% • Statutory profit after tax of £4.4bn up 24%, with EPS 27% higher 5.5p Earnings per share +27% • Underlying profit
Slide 11: Balance sheet – quality of the portfolio continues to improve
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Balance sheet – quality of the portfolio continues to improve Loans and advances (£bn) • Loans and advances £444bn, stable in 2018 2018 267 21 51 64 39 444 ‐ Loan growth in targeted segments offsetting sale of the Irish mortgage
Slide 12: Credit quality remains strong reflecting a continued prudent approach to risk
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Credit quality remains strong reflecting a continued prudent approach to risk Asset quality ratio (bps) -13 -10 -7 • Gross AQR flat at 28bps with net AQR of 21bps up due to expected lower releases and write-backs 28 28 28 21 18 1
Slide 13: Diversified, high quality portfolios with new to arrears stable
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Diversified, high quality portfolios with new to arrears stable Mortgages and credit cards – new to arrears as proportion of total book 2.0% • No deterioration in credit seen across mortgage 1.5% portfolio with new to arrears rem
Slide 14: Asset pricing and mix: mortgage pricing remains competitive but margin resilient
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Asset pricing and mix: mortgage pricing remains competitive but margin resilient (Book size £bn, Gross margin %(1)) Mortgage book UK consumer finance 2.0% 1.9% 7.2% 7.0% • Mortgage pricing remains competitive 291 288 39 41 and fo
Slide 15: Operating costs continue to provide competitive advantage
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Operating costs continue to provide competitive advantage despite increased strategic investment Operating costs(1) Operating costs(1) (£m) (£m) 8,184 8,165 -0.2% 1,141 1,235 8,184 51 8,165 775 +10% 201 882 82 (353) 6,268 6,048 -
Slide 16: Market leading efficiency creates capacity for increased investment
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Market leading efficiency creates capacity for increased investment Continued focus on BAU cost reduction Operating costs(1), £bn Net cost Cost:income Low 55.3 51.8 49.3 reduction to ratio (%)(1): 40s <£8bn in 2019 BAU Costs CAGR
Slide 17: Capital, Funding & Liquidity
Capital, Funding & Liquidity 17
Slide 18: Robust capital buffers supported by strong capital build in 2018
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Robust capital buffers supported by strong capital build in 2018 • CET1 ratio of 13.9%4 post dividend accrual & share buyback 13.9% 13.9% c.13% + c.1% • 210bps of CET1 build (195bps from underlying performance); Management Buffer
Slide 19: MREL ratio ahead of interim requirement, well on-track for end-state
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity MREL ratio ahead of interim requirement, well on-track for end-state Transitional MREL Ratio HoldCo Issuance (£bn) 2019e 5 32.6% 2018 12 • Strong total capital ratio of 23.1% 2017 9 means minimal additional capital 26.0% 2016 3 n
Slide 20: Successful year across capital markets, validating diversified funding model
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Successful year across capital markets, validating diversified funding model 9 2018 Funding by Product1 (£bn) All Funding by Maturity • £21.4bn raised during 2018 versus 8 2 steady state requirements of £15-20bn 7 < 1 Year (MM) 2
Slide 21: Appendix
Appendix , | i
Slide 22: Strong mortgage portfolio with continued low LTVs
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Strong mortgage portfolio with continued low LTVs £289bn gross lending; total market share 21% and 19% of open book Dec 2018 Dec 2017 Dec 2010 Mainstream Buy to let Specialist Total Total Total(1) Average LTVs 42.5% 52.1% 45.8% 4
Slide 23: Creating a market leading wealth proposition for customers
Overview & Capital, Funding & 2018 Results Appendix Strategy Liquidity Creating a market leading wealth proposition for customers Clear rationale for strategic partnership between Mass Market two of UK’s strongest financial services businesses ‐ Digitally enabled direct Financial Planning & Unique c
Slide 24: Notes
Notes LLOYDS 24
Slide 25: Forward looking statements and basis of presentation
Forward looking statements and basis of presentation Forward looking statements This document contains certain forward looking statements with respect to the business, strategy, plans and /or results of the Group and its current goals and expectations relating to its future financial condition and p
Slide 26: Debt Investor Relations Contacts
Debt Investor Relations Contacts Website: www.lloydsbankinggroup.com/investors/fixed-income-investors INVESTOR RELATIONS LONDON Douglas Radcliffe Edward Sands Group Investor Relations Director Director, Investor Relations +44 (0)20 7356 1571 +44 (0)20 7356 1585 douglas.radcliffe@lloydsbanking.com ed
Slide 27: Lloyds
LLoyDs
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