Lloyds Banking Group Plc · LSE:LLOY

Lloyds Banking — Q3 2014 Earnings Presentation

16 slides from Lloyds Banking's earnings presentation, Oct 28, 2014

  1. Slide 1: Q3 Interim Management Statement

    Q3 INTERIM MANAGEMENT STATEMENT Presentation to analysts and investors 28 October 2014

  2. Slide 2: Highlights for the First Nine Months of 2014

    HIGHLIGHTS FOR THE FIRST NINE MONTHS OF 2014 Continued successful execution of our strategy and further improvement in financial performance  Further strategic progress – Lending growth in key customer segments, deposit growth driven by relationship brands – Reshaping of Group substantially complet

  3. Slide 3: Financial Performance 2014 to Date

    FINANCIAL PERFORMANCE 2014 TO DATE Profit and returns substantially improved and balance sheet further strengthened  Income growth driven by 11% increase in net interest Income £13.9bn income (excl SJP) +3% – Net interest margin of 2.44%, up 38bps – Loan growth in key customer segments Underlying £

  4. Slide 4: Supporting Our Customers and the UK Economy

    SUPPORTING OUR CUSTOMERS AND THE UK ECONOMY Continued loan growth in key customer segments and deposit growth in relationship brands Net lending growth (%) Deposit growth (%) Last Last 9 months Last 12 months annualised 12 months Retail Mortgages(1) 2 2% 4 relationship brands Unsecured personal Comm

  5. Slide 5: Financial Performance: Net Interest Income and Other Income

    FINANCIAL PERFORMANCE Strong net interest income performance, resilient other income given the challenging environment Net interest income(1) (£m)  Strong improvement in NII year on year reflects further margin expansion and loan 11% growth in key segments 227 153 8,838 7,966 78 1,323  Margin incr

  6. Slide 6: Financial Performance: Costs and Impairment

    FINANCIAL PERFORMANCE Continued cost improvement; reduction in impairment resulting in enhanced AQR guidance Total costs (£m) Impairment (£m) (3)% (6)% 0.80% 7,110 189 6,907 1,002 150 6,718 (357) 93 90 811 21% 670 (368) 0.57% 521 0.51% 431 327 259 0.40% 0.35% 0.26% 0.20% Q3 Disposals Simplifi- Pay G

  7. Slide 7: Legacy Issues

    LEGACY ISSUES An additional charge of £900m in Q3 in relation to PPI claims Average complaint volumes per month(1) (15)%  Additional charge of £900m in Q3 primarily 140,000 (24)% (18)% (28)% 105,000 (12)% driven by higher than expected reactive (8)% complaint volumes (24)% 70,000 13% (7)% 3%  Redu

  8. Slide 8: Financial Performance: Statutory Profit Before Tax

    FINANCIAL PERFORMANCE Statutory profit before tax of £1.6bn after restructuring and legacy charges YTD Q3 YTD Q3 (£m) 2014 2013  Asset sales and volatile items includes loss on ECN exchange offset by pension credit; Underlying profit 5,974 4,426 2013 includes gain on sale of government bonds Asset

  9. Slide 9: Further Strengthening the Balance Sheet

    FURTHER STRENGTHENING THE BALANCE SHEET Common equity tier 1 and leverage ratios further strengthened Fully loaded common equity tier 1 ratio (%)  Stronger capital position principally driven by underlying 1.0 0.2 2.4 0.2 profit and RWA reduction (0.5) 12.0 (0.9) 10.3 (0.7)  Fully loaded CET1 rati

  10. Slide 10: Summary

    SUMMARY Supporting and benefiting from the UK economic recovery  Continued successful execution of strategy – Continued loan growth in key customer segments – 35% increase in underlying profit to £6.0bn; statutory PAT of £1.4bn – Substantial increase in returns, with RoRWA of 3.05%  Well positione

  11. Slide 11: Appendix

    APPENDIX

  12. Slide 12: Further Strengthening the Balance Sheet: Strong Balance Sheet

    FURTHER STRENGTHENING THE BALANCE SHEET Strong balance sheet Sept Dec YTD Q3 (£bn) 2014 2013 Change (£bn) 2014 ASSETS SOURCE OF FUNDS Loans and advances(1)(2) 468 468 – Deposit growth 7 Run-off asset reduction 10 Global Corporates 33 38 (13)% TSB 22 24 (6)% Other movement 6 Other loans and advances

  13. Slide 13: Strong Capital Position with AT1 Requirement Met

    FURTHER STRENGTHENING THE BALANCE SHEET Strong capital position with medium term AT1 requirement met through ECN exchange Capital composition (%)(1) £bn 21.0 52.4 18.8 Tier 2 4.2 10.4  Strong total capital ratio of 21.0% Tier 2 4.4 ECN tier 2 1.2 3.0 Tier 1 1.5 3.7  Substantially improved quality

  14. Slide 14: Run-off Portfolio

    RUN-OFF PORTFOLIO Reduction of £10bn in the first nine months of 2014 Run-off portfolio (£bn) 32% Total assets 33 International retail 8  Run-off assets reduced 32% to 23 Treasury assets 3 £23bn <20 7 7 UK CRE Int’l retail c.6 2 4  Underlying loss decreased to Other corporate 11 £303m Non-retail c

  15. Slide 15: Net Tangible Assets

    NET TANGIBLE ASSETS Net tangible assets per share (p) – Jun to Sept 2.4 1.0 51.8 49.4 (1.0) Jun Underlying Legacy Reserve Sept 2014 earnings movements 2014 and other Net tangible assets per share (p) – Dec to Sept 6.6 0.4 51.8 (2.2) 48.5 (1.5) Dec Underlying Legacy ECN Reserve Sept 2013 earnings exc

  16. Slide 16: 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 and plans of Lloyds Banking Group and its current goals and expectations relating to its future financial condition and per

Lloyds Banking Group — Q3 2014 Earnings Presentation on 6ix