Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — Q1 2022 Earnings Presentation
15 slides from Lloyds Banking's earnings presentation, Apr 27, 2022
Slide 1: Q1 Interim Management Statement
Classification: Public Q1 Interim Management Statement Lloyds Banking Group 27 April 2022
Slide 2: Solid business and financial performance
Classification: Public Solid business and financial performance Summary P&L and key metrics (£m) Q1 2022 Q1 2021 YoY • Strong net income, up 12%; NIM 268bps Net interest income 2,945 2,677 10% • Operating costs1 3% higher reflecting Other income 1,261 1,135 11% planned investment with stable BAU cos
Slide 3: Continued recovery in customer activity and franchise growth
Classification: Public Continued recovery in customer activity and franchise growth Q1 lending change Q1 deposit change • Total mortgage balances up £1.2bn in Q1 (£bn) (£bn) to £308.7bn, driven by £1.7bn increase in Retail Commercial Retail Commercial open book +£2.0bn / 0.6% +£2.6bn / 2.8% +£2.5bn
Slide 4: Strong revenue performance
Classification: Public Strong revenue performance • NII £2.9bn, up 10% on Q1 2021 Net interest income (NII) and banking net interest margin (NIM) (£bn, bps) − Stronger NIM 268bps, given base rate £2.9bn £2.9bn +11bps changes, deposit growth, hedge benefits 2 and continued capital base optimisation 1
Slide 5: Maintained focus on efficiency
Classification: Public Maintained focus on efficiency Operating costs • Cost:income ratio of 52.3% and operating (£m) +3% 63 costs of £2.1bn, up 3% given planned 2,098 2,045 61 investment and new businesses costs 2,035 36 (6) • Sustained cost discipline with stable BAU (64) (37) costs, offsetting in
Slide 6: Strong asset quality and sustained low new to arrears
Classification: Public Strong asset quality and sustained low new to arrears • £177m net charge, AQR 16bps • Sustained low levels of new to arrears; Impairment underlying charges below pre-COVID level (£m) Q1 2022 Q1 2021 YoY • Updated economic outlook: stronger HPI Charges pre-updated MES1 150 99 5
Slide 7: Statutory profit after tax of £1.2bn
Classification: Public Statutory profit after tax of £1.2bn • Underlying and statutory profit converging Statutory profit (£m) following year end 2021 changes Q1 2022 Q1 2021 YoY Underlying profit 1,785 1,914 (7)% • Restructuring costs £24m following Restructuring costs (24) (16) (50)% reallocation
Slide 8: Strong capital position enabling significant accelerated pension contributions
Classification: Public Strong capital position enabling significant accelerated pension contributions Risk-weighted assets (£bn) £(2)bn • RWA regulatory inflation of £16bn on 16 212 2 1 January 210 (2) (2) • RWAs down £2bn since 1 January 196 supported by continued optimisation; limited credit impac
Slide 9: Solid performance in Q1, well positioned looking forward
Classification: Public Solid performance in Q1, well positioned looking forward • Solid business and financial performance in Q1 − Strong revenue growth supported by increased NIM, continued recovery in customer activity and focus on costs − Asset quality remains strong and well positioned for a per
Slide 10: Q&A
Classification: Public Q&A 10
Slide 11: Appendix
Classification: Public Appendix 11
Slide 12: Quarterly P&L and key ratios
Classification: Public Quarterly P&L and key ratios (£m) Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Underlying net interest income 2,945 2,893 2,852 2,741 2,677 Underlying other income 1,261 1,307 1,336 1,282 1,135 Operating lease depreciation (94) (78) (111) (123) (148) Net income 4,112 4,122 4,077 3,
Slide 13: Illustrative NII sensitivity
Classification: Public Illustrative NII sensitivity • Reflects shifts in forward rate curve • Marginal reduction in Year 1 sensitivity since year end driven by higher structural Cumulative impact of parallel shifts in interest rate curve1 hedge balance (£m) • Actual impact also depends on regulatory
Slide 14: Prudent economic scenarios
Classification: Public Prudent economic scenarios Scenario Measure (%) 2022 vs Q4 211 2023 2024 2025 2026 Ave. 22-26 GDP 3.6 (0.4) 1.0 1.8 1.6 1.6 1.9 Interest rate 1.39 (0.05) 1.80 2.00 2.02 2.05 1.85 Upside (30%) Unemployment rate 3.3 - 3.4 3.6 3.8 3.8 3.6 HPI growth 5.3 2.7 4.8 4.9 3.9 3.8 4.5 CR
Slide 15: 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