Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — Q3 2023 Earnings Presentation
18 slides from Lloyds Banking's earnings presentation, Oct 23, 2023
Slide 1: Statement
Classification: Public Statement Lloyds Banking Group 25 October 2023 1
Slide 2: Consistent delivery: Helping Britain
Classification: Public Consistent delivery Purpose Helping • Supporting customers • Delivering strategic ambitions Britain • Continued robust financial performance • Reaffirming 2023 financial guidance • Well positioned to deliver for all stakeholders 2
Slide 3: Continued robust financial performance
Classification: Public Continued robust financial performance Financial performance (£m) Q3 2023 Q3 2022 YoY1 YTD YTD1 Net interest income 10,448 9,529 10% Other income 3,837 3,538 8% • Statutory PAT £4.3bn; RoTE 16.6% Operating lease depreciation (585) (295) (98)% • Strong net income, up 7%, NIM 31
Slide 4: Ongoing resilience in customer franchise
Classification: Public Ongoing resilience in customer franchise Q3 lending change1 (£bn) Q3 deposit change3 (£bn) Retail Commercial Retail Commercial +£1.2bn/0.3% -£0.6bn/0.7% +£0.7bn/0.2% +£0.1bn/0.1% • Total loans £452bn, up £1.4bn in Q3; down 0.6% YTD o Retail up £1.2bn in Q3; total mortgages sta
Slide 5: Solid income performance
Classification: Public Solid income performance Net interest income and banking margin (£bn, bps) £3.5bn £3.4bn 7 • NII £10.4bn YTD, £3.4bn in Q3 o YTD AIEAs £453bn; Q3 broadly stable vs Q2 - 314 (6) (7) o YTD NIM 315bps; 308bps in Q3, down 6bps vs Q2, 308 given expected headwinds o Structural hedge
Slide 6: Costs in line with expectations
Classification: Public Costs in line with expectations Operating costs (£m) +5% 81 236 210 6,654 (189) 6,316 • YTD operating costs £6.7bn, up 5% given planned strategic investment, new business and inflation Q3 2022 Cost Pay & Investment, Other Q3 2023 • Cost:income 49.5%; 48.6% ex. remediation YTD
Slide 7: Resilient observed asset quality
Classification: Public Resilient observed asset quality Impairment (£m) Q3 2023 Q3 2022 Q3 2023 YoY YTD YTD Charge (credit) pre updated MES1 261 918 532 386 Retail 236 787 520 267 • Q3 YTD impairment charge £849m, AQR 25bps Commercial Banking 31 139 1 138 Other (6) (8) 11 (19) o Pre-MES charge £918m
Slide 8: Reassuring performance across portfolios
Classification: Public Reassuring performance across portfolios Mortgage portfolio mix and new to arrears (Balances £bn, NTAs %, LTV %) 290 295 309 313 308 308 • Mortgage book remains resilient with arrears below 2019; average LTV 43% and new to arrears stable in 0.36% quarter 0.31% 0.27% 0.26% 0.25
Slide 9: Updated macroeconomic outlook
Classification: Public Updated macroeconomic outlook UK bank rate CPI inflation 6% 12% 5% 10% 4% 8% 3% 6% 2% 4% • Modest growth improvement, lower base rate 1% 2% o GDP now expected to strengthen 0.4% in 2023, 0% 0% Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 versus 0.2% assumed at Q2 21 2
Slide 10: Underlying and statutory profit converge, TNAV building
Classification: Public Underlying and statutory profit converge, TNAV building Statutory profit (£m) Q3 2023 Q3 2022 YoY YTD YTD Underlying profit 6,063 5,322 14% Restructuring (69) (69) • YTD restructuring £69m with £44m in Q3 Volatility and other items (266) (1,528) 83% Statutory profit before tax
Slide 11: Continued strong capital generation
Classification: Public Continued strong capital generation Risk weighted assets (£bn) 1.9 2.0 2.9 3.0 (3.0) • RWAs £217.7bn, up £6.8bn YTD incl. £2.4bn in Q3 217.7 • Strong 165bps capital generation after 30bps full 210.9 fixed pension deficit contributions; 129bps after regulatory headwinds • CET1
Slide 12: Consistent delivery: 2023 financial guidance
Classification: Public Consistent delivery Purpose • Continued robust financial performance Helping • 2023 financial guidance Britain o NIM of >310bps o Operating costs of c.£9.1bn o AQR now expected to be <30bps o RoTE of >14% o Capital generation of c.175bps • Well positioned to deliver for all st
Slide 13: Q&A
Classification: Public Q&A 13
Slide 14: Appendix
Classification: Public Appendix 14
Slide 15: Quarterly P&L and key ratios
Classification: Public Quarterly P&L and key ratios (£m) Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Net interest income 3,444 3,469 3,535 3,643 3,394 3,190 2,945 Other income 1,299 1,281 1,257 1,128 1,171 1,185 1,182 Operating lease depreciation (229) (216) (140) (78) (82) (119) (94) Ne
Slide 16: Updated economic scenarios
Classification: Public Updated economic scenarios Scenario ECL (£m) Measure (%) 2023 vs Q4 2022 2024 2025 2026 2027 Ave. 23-27 GDP 0.8 0.7 2.0 1.5 1.8 2.1 1.6 Unemployment rate 3.9 1.1 2.9 2.8 3.1 3.1 3.1 HPI growth (3.4) (0.6) 1.4 9.5 9.7 7.6 4.8 Upside (30%) 3,986 CRE price growth (0.4) (8.9) 9.5
Slide 17: 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 18: Investor Relations contacts
Classification: Public Investor Relations contacts Douglas Radcliffe, Group Investor Relations Director Sarah Robson, Senior Manager, Investor Relations +44 (0)20 7356 1571 +44 (0)7494 513 983 Douglas.Radcliffe@lloydsbanking.com Sarah.Robson2@lloydsbanking.com Edward Sands, Director, Investor Relati