Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — H1 2010 Earnings Presentation
16 slides from Lloyds Banking's earnings presentation, Aug 4, 2010
Slide 1: 2010 Interim Results
2010 INTERIM RESULTS 4 August 2010 Eric Daniels Group Chief Executive
Slide 2: A Strong and Growing Business: First Half Overview and Context
A STRONG AND GROWING BUSINESS FIRST HALF OVERVIEW AND CONTEXT BUILDING SUSTAINABLE GROWTH
Slide 3: First Half Business Highlights
FIRST HALF BUSINESS HIGHLIGHTS Continued good progress Strong first half profit of £1.6 billion(1); statutory profit of £1.3 billion – Continued to build positive momentum across all key line items Strong growth in customer relationship businesses – Further deepening relationships Integration
Slide 4: Divisional Performance
DIVISIONAL PERFORMANCE Profit of £2,495 million Income up 18% Operating expenses down 5% RETAIL Asset quality ratio improved to 72bps Customer deposit growth of £6.6 billion 880,000 new current accounts and 2.6m new savings accounts £14.9 billion gross new mortgage lending Profit of
Slide 5: Divisional Performance
DIVISIONAL PERFORMANCE Loss of £1,609 million Income up 4% WEALTH & Operating expenses down 3% INTERNATIONAL Impairments up 52% Customer deposit growth of £1.3 billion 13,000 new UK private banking customers Profit of £469 million Income down 10% INSURANCE Operating expenses down 1
Slide 6: Strong Performance on Integration
STRONG PERFORMANCE ON INTEGRATION On track to deliver £2 billion target MAJOR PROGRAMMES H1 2010 2011 £m Run-rate Run-rate Run-rate £m 2,000 Organisational design 480 600 Systems and c.1,300 processes 360 900 1,084 766 Property consolidation 64 160 Procurement 180 340 Dec H1 End End Total 2009 2010
Slide 7: Guidance
GUIDANCE Performing in line with, or better than, our guidance GUIDANCE H1 2010 TREND(1) High single digit growth REVENUE GROWTH within 2 years 9 Margin expected to MARGINS increase to c.2% 99 c.200 pa basis points COST:INCOME RATIO improvement 99 Run rate savings of INTEGRATION BENEFITS £2 billion
Slide 8: A Strong and Growing Business: Building Sustainable Growth
A STRONG AND GROWING BUSINESS FIRST HALF OVERVIEW AND CONTEXT BUILDING SUSTAINABLE GROWTH
Slide 9: Economic Outlook
ECONOMIC OUTLOOK Gradual recovery remains the most likely scenario GDP GROWTH IN CENTRAL SCENARIO NEAR TERM IMPACT % change on year earlier House prices 0% in 2010 2.7 2.7 2.6 2.1 +3% in 2011 1.3 Commercial property values +6% in 2010 (0.1) +2% in 2011 Company failures Peak in 2010
Slide 10: External Backdrop
EXTERNAL BACKDROP Challenging environment Markets – Sovereign risk and bank funding markets Prudential regulation – Basel III and Solvency II – Stress testing New regulatory structures – Role of the Bank of England and the Consumer Protection and Markets Authority – European changes External
Slide 11: The Building Blocks for a Strong Business
THE BUILDING BLOCKS FOR A STRONG BUSINESS Driving customer value, earnings, capital and returns Value SUSTAINABLE GROWTH creation Efficiency, effectiveness Customer value Deep relationships Quality market share PROFITABILITY Complete integration Drive elements of profit model CONTROL L
Slide 12: Delivering Sustainable Growth: How We Will Create Value
DELIVERING SUSTAINABLE GROWTH How we will create value A UNIQUE …DESIGNED TO DELIVER …DRIVING LONG TERM BUSINESS MODEL… CUSTOMER VALUE… SHAREHOLDER VALUE Industry-leading efficiency and Better customer effectiveness understanding Stronger growth Better product Lower risk alignment to need
Slide 13: Delivering Sustainable Growth: How We Will Measure Progress
DELIVERING SUSTAINABLE GROWTH How we will measure and report progress BUSINESS MODEL CUSTOMER VALUE SHAREHOLDER VALUE METRICS METRICS METRICS Operating leverage Cost:income Investment levels Net promoter score Loss ratios (customer Return on equity satisfaction) + Service quality EPS
Slide 14: Our Longer Term Guidance
OUR LONGER TERM GUIDANCE Linking our strategy to our financials STRATEGY EXPECTED RESULT Relationship deepening Growth 6-7%(1) REVENUE GROWTH Appropriate pricing for risk Margin above 2.5% Integration Cost:income ratio c.40% EFFICIENCY Operating leverage Investment in growth Effici
Slide 15: Summary
SUMMARY Building sustainable growth A strong first half – £1.6 billion profit(1) – Continued momentum across the business Putting in place the building blocks for a strong business – Control – Profitability – Growth Building the UK’s most customer-focused franchise – Using our efficiency and e
Slide 16: Forward Looking Statements
FORWARD LOOKING STATEMENTS This announcement contains forward looking statements with respect to the business, strategy and plans of the Lloyds Banking Group, its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, incl