Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — Q1 2023 Earnings Presentation
17 slides from Lloyds Banking's earnings presentation, May 3, 2023
Slide 1: Statement
Classification: Public Statement Lloyds Banking Group 3 May 2023 1
Slide 2: Robust business performance
Classification: Public Robust business performance Purpose • Purpose driven business model, enabling continued Helping support for customers and colleagues Britain • Continued delivery against strategic objectives • Solid financial performance, supporting strong capital generation • 2023 guidance ma
Slide 3: Solid financial performance
Classification: Public Solid financial performance Financial performance (£m) Q1 2023 Q1 2022 YoY Net interest income 3,535 2,945 20% Other income 1,257 1,182 6% • Strong net income, up 15%; NIM 322bps Operating lease depreciation (140) (94) (49)% • Operating costs up 5% given investment and Net inc
Slide 4: Customer franchise resilience
Classification: Public Customer franchise resilience Q1 lending change (£bn) Q1 deposit change (£bn) Retail Commercial Retail Commercial -£2.5bn/0.7% -£0.6bn/0.6% -£4.3bn/1.4% +£2.7bn/1.6% • Mortgage balances down £3.7bn in Q1 including £2.5bn legacy portfolio exit • Unsecured lending growth in cred
Slide 5: Strong income performance
Classification: Public Strong income performance Net interest income and banking margin (£bn, bps) £3.6bn 6 £3.5bn • NII £3.5bn with stable AIEAs and resilient NIM 7 o Q1 AIEAs £454.2bn, broadly stable vs Q4 (9) (2) (2) o NIM 322bps, in line with Q4; mortgage 322 322 completion margins c.50bps in Q1
Slide 6: Operating costs in line with expectations
Classification: Public Operating costs in line with expectations Operating costs (£m) +5% 106 4 55 2,170 • Q1 operating costs £2.2bn, up 5% YoY given (54) 2,059 investment, new businesses and inflation • Q1 cost:income ratio 47.1%; 46.6% excluding Q1 2022 Cost Pay & Investment, Other Q1 2023 remedia
Slide 7: Resilient asset quality
Classification: Public Resilient asset quality Impairment1 (£m) Q1 Q4 Q1 QoQ YoY 2023 2022 2022 Charge pre updated MES2 322 383 (61) 150 172 • Resilient observed asset quality Retail 271 253 18 149 122 o Retail credit performance remains resilient; all Commercial Banking 53 121 (68) 1 52 portfolios
Slide 8: Resilience across portfolios
Classification: Public Resilience across portfolios New to arrears as a proportion of total balances (3 month rolling average, %) 1.00% • Modest increase in new to arrears in some portfolios, from a low base; still at or below pre- 0.75% pandemic levels 0.50% o Mortgage increase driven by legacy boo
Slide 9: Diversified deposit base; strong liquidity position
Classification: Public Diversified deposit base; strong liquidity position Loan to deposit ratio 96%, Net stable funding ratio 129%, Liquidity coverage ratio 143% c.65% of deposits in Retail; diversified Commercial >90% of deposit growth since 2019 in diversified Retail3 (£bn) balances (£bn) 451 476
Slide 10: TNAV build and strong capital generation
Classification: Public TNAV build and strong capital generation Tangible net asset value per share (pence) +3.1p 0.8 0.4 2.3 (0.4) (5.4) • TNAV 49.6p, up 3.1p since restated year end 51.9 49.6 46.5 • RWAs flat in Q1 at £211bn; expect update on CRD IV later this year Q4 IFRS 17 Q4 Attributable Cashfl
Slide 11: Robust business performance
Classification: Public Robust business performance Purpose • Solid financial performance, supporting strong capital generation Helping • 2023 guidance maintained, delivering higher, more Britain sustainable returns o Banking NIM to be greater than 305bps o Operating costs to be c.£9.1bn o Asset qual
Slide 12: Q&A
Classification: Public Q&A 12
Slide 13: Appendix
Classification: Public Appendix 13
Slide 14: Quarterly P&L and key ratios
Classification: Public Quarterly P&L and key ratios (£m) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Net interest income 3,535 3,643 3,394 3,190 2,945 Other income 1,257 1,128 1,171 1,185 1,182 Operating lease depreciation (140) (78) (82) (119) (94) Net income 4,652 4,693 4,483 4,256 4,033 Operating cos
Slide 15: Updated economic scenarios
Classification: Public Updated economic scenarios Scenario ECL (£m) Measure (%) 2023 vs Q4 2022 2024 2025 2026 2027 Ave. 23-27 GDP 0.6 0.5 1.8 1.9 1.8 1.7 1.5 Unemployment rate 3.0 0.2 2.8 2.9 2.9 3.0 2.9 HPI growth (3.1) (0.3) 4.9 7.1 5.9 4.8 3.8 Upside (30%) 3,814 CRE price growth 6.9 (1.6) 3.3 2.
Slide 16: Disclaimer
Classification: Public 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 Pr
Slide 17: Investor Relations contacts
Classification: Public Investor Relations contacts Douglas Radcliffe, Group Investor Relations Director +44 (0)20 7356 1571 Douglas.Radcliffe@lloydsbanking.com Edward Sands, Director, Investor Relations +44 (0)20 7356 1585 Edward.Sands@lloydsbanking.com Nora Thoden, Director, Investor Relations – ES