Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — Debt Investor Presentation (2020)
26 slides from Lloyds Banking's debt investor presentation, 2020
Slide 1: Fixed Income Investor Presentation Q1 2020
FIXED INCOME INVESTOR PRESENTATION Q1 2020
Slide 2: Group Overview & Strategy
Classification: Limited Group Overview & Strategy 2
Slide 3: Simple group structure with multiple issuance points
Capital, Funding & Classification:Results Group Overview Limited Liquidity Appendix Simple group structure with multiple issuance points HoldCo Lloyds Banking Group Main Entities A3 / BBB+ / A+ Ratings P-2 / A-2 / F1 Neg / Neg / Neg Example Products Senior Unsecured - Capital Ring-Fenced Sub-Group N
Slide 4: Market shares at FY 2019
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Market shares at FY 2019 Channels market share Digital new business volumes1 18% Branch new business volumes1 22% Product market share Consumer credit card balances 24% PCA deposit balances 22% Mortgage balances (ope
Slide 5: Actively supporting customers and colleagues in difficult times
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Actively supporting customers and colleagues in difficult times • Active support for customers - Flexible and sensitive treatment of retail customers with 880k payment holidays granted to date2 OUR Helping Britain PU
Slide 6: Actively supporting customers, including through Government initiatives
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Actively supporting customers, including through Government initiatives Supporting our personal customers Supporting small businesses and corporates • Debt payment holidays of up to 3 months to help • Payment holiday
Slide 7: Challenging and uncertain economic outlook
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Challenging and uncertain economic outlook GDP forecasts for 2020-221 (% change vs same period a year earlier) 2020 2021 2022 • Significant uncertainty remains with a 3.5 challenging economic outlook 3.0 • Final impa
Slide 8: Well placed to play our part
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Well placed to play our part • Strong balance sheet benefitting from prudent approach to lending Low risk - Core loan book of c.£440bn remaining stable over last 10 years and >80% secured1 balance sheet - More than 7
Slide 9: Q1 2020 Results
Classification: Limited Q1 2020 Results 9
Slide 10: Resilient business model in a challenged economic environment
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Resilient business model in a challenged economic environment Statutory profit £74m • Statutory profit before tax £74m after higher impairment charge before tax (95)% • Pre-provision operating profit of £2.0bn £4.0bn
Slide 11: Solid pre-provision profit
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Solid pre-provision profit Net interest income and margin1 Operating costs (£m) (£m) 2.91% (4)bps (3)bps (5)bps 2.79% (4)% (4)% 1,957 26 4 3,083 1,877 2,950 (61) (31) (49) (30) (72) Q1 2019 Asset spread Liability Who
Slide 12: Increased impairment charge reflecting economic assumptions
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Increased impairment charge reflecting economic assumptions Impairment charges (£m) Q1 2020 Q1 2019 Increase • Underlying credit quality robust but significant Underlying charges 368 275 93 uncertainty exists Retail
Slide 13: Balance sheet well positioned, AQRs driven by increase in ECL
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Balance sheet well positioned, AQRs driven by increase in ECL Group loans and advances of which (£bn) corona- of which Net AQR virus under- Net AQR 27 (bps) Q1 2020 ECL5 lying Q1 2019 Increase Retail secured1 Retail
Slide 14: Retail book focused on prime portfolios
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Retail book focused on prime portfolios Mortgages and credit cards – new to arrears as proportion of total book1 1.5% • No net expansion and significant de-risking of core 1.0% loan book over the last 10 years • Sign
Slide 15: Commercial portfolio benefits from diverse client base and sector limits
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Commercial portfolio benefits from diverse client base and sector limits Lending in key coronavirus-impacted sectors1 (£bn) • <3% of Group lending, or c.12% of Commercial, Retail non-food 2.6 1.2 exposed to most impa
Slide 16: Capital, Funding & Liquidity
Classification: Limited Capital, Funding & Liquidity 16
Slide 17: Capital position remains strong, significant resources to support customers
Capital, Funding & Classification:Results Group Overview Limited Liquidity Appendix Capital position remains strong, significant resources to support customers while absorbing potential credit losses CET1 Ratio • Robust CET1 ratio of 14.2% (13.9% on Fully Loaded basis) • Increased certainty on capit
Slide 18: Interim MREL requirement met at 1 Jan 2020; on track for end-state
Capital, Funding & Classification:Results Group Overview Limited Liquidity Appendix Interim MREL requirement met at 1 Jan 2020; on track for end-state Transitional MREL Ratio • No change currently to BoE MREL timeline; Final 34.5% requirement to be set in 2020 by the BoE following 29.4% planned MREL
Slide 19: Strong liquidity position and LDR supported by robust core deposit base
Capital, Funding & Classification:Results Group Overview Limited Liquidity Appendix Strong liquidity position and LDR supported by robust core deposit base LCR well above regulatory minimum Deposits 128% 137% 138% 2018 150 125% 3% • Average LCR % has remained flat to 131 132 18% 125 126 100% 100 31%
Slide 20: Solid progress on 2020 funding plan, minimal residual funding needs remain
Capital, Funding & Classification:Results Group Overview Limited Liquidity Appendix Solid progress on 2020 funding plan, minimal residual funding needs remain 3 Funding Portfolio by Maturity at Q1 2020 2019 Public Funding by Product £bn 7 • 2020 funding requirements had been 1 6 < 1 Year (MM) guided
Slide 21: Appendix
Classification: Limited Appendix 21
Slide 22: Legal entity balance sheet analysis (FY 2019)
Capital, Funding & Classification:Results Group Overview Limited Liquidity Appendix Legal entity balance sheet analysis (FY 2019) Lloyds Bank Plc (RFB) Lloyds Bank Corporate Markets Plc (NRFB) £581bn £581bn £80bn £80bn Other 15 Other 52 10 Derivatives Other Other 1 2 Derivatives 8 8 Financial 2 Liab
Slide 23: Economic scenarios
Capital, Funding & Group Overview Classification:Results Limited Liquidity Appendix Economic scenarios Current scenario (%) Probability Expected credit Scenario weighting (%) loss (£m) Economic measure 2020 2021 2022 2020-22 GDP (5.0) 3.0 3.5 1.2 Interest rate 0.10 0.25 0.25 0.20 Base case 30 4,929
Slide 24: Notes
Classification: Limited Notes 24
Slide 25: Debt Investor Relations Contacts
Classification: Limited Debt Investor Relations Contacts Website: www.lloydsbankinggroup.com/investors/fixed-income-investors INVESTOR RELATIONS LONDON Douglas Radcliffe Edward Sands Group Investor Relations Director Director, Investor Relations +44 (0)20 7356 1571 +44 (0)20 7356 1585 Douglas.Radcli
Slide 26: Forward looking statements
Classification: Limited Forward looking statements This document contains certain forward looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and section 27A of the US Securities Act of 1933, as amended, with respect to the business, strategy,
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