Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — Q1 2024 Earnings Presentation
18 slides from Lloyds Banking's earnings presentation, Apr 24, 2024
Slide 1: Q1 Interim Management Statement
Classification: Public Q1 Interim Management Statement Lloyds Banking Group 24 April 2024
Slide 2: Delivering in line with expectations
Classification: Public Delivering in line with expectations Purpose Helping • Continuing to deliver against strategic outcomes Britain • Robust financial performance in line with expectations Prosper • Confidence in 2024 and 2026 guidance 2
Slide 3: Robust financial performance in line with expectations
Classification: Public Robust financial performance in line with expectations Financial performance (£m) Q1 2024 Q4 2023 QoQ % Q1 2023 YoY % Net interest income 3,184 3,317 (4) 3,535 (10) Other income 1,340 1,286 4 1,257 7 Operating lease depreciation (283) (371) 24 (140) • Stat profit after tax £1.
Slide 4: Resilience in customer franchise
Classification: Public Resilience in customer franchise Q1 lending change (£bn) Q1 deposit change (£bn) Retail Commercial Retail Commercial • Mortgage balances down £1.6bn in Q1 driven by -£0.1bn/0% -£0.8bn/-1% +£1.3bn/0% -£3.5bn/-2% expected roll over of Q4 refinancing 0.7 0.4 • Growth across cards
Slide 5: Solid income performance
Classification: Public Solid income performance Net interest income and banking net interest margin (£bn, bps) £3.3bn £3.2bn 4 • NII £3.2bn; NIM 295bps - (3) (4) o NIM 3bps lower in Q1, quarterly decline slowing 298 as expected 295 o Q1 AIEAs £449bn, down £4bn vs Q4 o Hedge notional of £244bn, down
Slide 6: Continued cost discipline
Classification: Public Continued cost discipline Operating costs (£bn) +6% 0.1 0.1 • Operating costs £2.4bn, +11% YoY; +6% ex. BoE levy 0.1 2.4 o Includes expected higher severance charge 2.3 2.2 0.1 • Q1 cost:income ratio 57.2%; 54.4% ex. remediation and BoE levy Q1 2023 Cost Pay & Investment, Q1 2
Slide 7: Strong asset quality
Classification: Public Strong asset quality Impairment (£m) Q1 Q4 Q1 • Strong asset quality QoQ YoY 2024 2023 2023 Charge (credit) pre updated MES1 249 (353) 602 322 (73) o Mortgage new to arrears and default rates Retail 303 277 26 271 32 improving; all other portfolios stable Commercial Banking (4
Slide 8: RoTE robust, TNAV building
Classification: Public RoTE robust, TNAV building Statutory profit (£m) Q1 Q4 QoQ Q1 YoY 2024 2023 % 2023 % Underlying profit 1,757 1,746 1 2,220 (21) Restructuring (12) (85) 86 (12) - • RoTE 13.3%; continue to expect c.13% RoTE in 2024 Volatility and other items (117) 114 52 Statutory profit before
Slide 9: Strong capital generation
Classification: Public Strong capital generation Risk weighted assets (£bn) 2.0 2.2 0.3 - (0.8) 222.8 • RWAs £222.8bn, up £3.7bn in Q1 219.1 o Includes a c.£1.5bn temporary RWA increase expected to reverse in Q2 Q4 2023 Underlying Credit / CRDIV1 Optimisation Market risk Q1 2024 • Strong 40bps capit
Slide 10: Delivering in line with expectations
Classification: Public Delivering in line with expectations • Continuing to deliver against strategic outcomes Purpose Helping • Robust financial performance in line with expectations • 2024 guidance reaffirmed Britain o NIM >290bps Prosper o Operating costs c.£9.3bn plus c.£0.1bn BoE levy o AQR <30
Slide 11: Q&A
Classification: Public Q&A 11
Slide 12: Appendix
Classification: Public Appendix 12
Slide 13: 2024 and 2026 guidance
Classification: Public 2024 and 2026 guidance 2024 2026 Income NIM >290bps c.£9.3bn operating costs plus Costs <50% cost:income ratio c.£0.1bn BoE levy Asset quality ratio <30bps Return on tangible equity c.13% >15% Risk weighted assets £220bn-£225bn Capital generation c.175bps >200bps Capital targe
Slide 14: Stable credit performance across portfolios
Classification: Public Stable credit performance across portfolios New to arrears (3 month rolling average, %) 1.00% • Mortgage book resilient with new to arrears 0.75% improving in quarter; average LTV 43% 0.50% • Consumer finance trends stable; new to arrears 0.25% broadly at, or lower than, pre-p
Slide 15: Quarterly P&L and key ratios
Classification: Public Quarterly P&L and key ratios (£m) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Net interest income 3,184 3,317 3,444 3,469 3,535 3,643 3,394 3,190 2,945 Other income 1,340 1,286 1,299 1,281 1,257 1,128 1,171 1,185 1,182 Operating lease depreciation (
Slide 16: Updated economic scenarios
Classification: Public Updated economic scenarios Scenario ECL (£m) Measure (%) 2024 vs Q4 2023 2025 2026 2027 2028 Ave. 24-28 GDP 1.1 (0.4) 2.0 1.7 1.6 1.6 1.6 Unemployment rate 3.2 (0.1) 3.0 3.0 2.9 2.9 3.0 HPI growth 3.7 2.9 6.7 6.5 5.3 4.9 5.4 Upside (30%) 2,837 CRE price growth 6.5 (2.5) 4.8 1.
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 Nora Thoden, Director, Investor Relations – ESG +44 (0)20 7356 2334 Nora.Thoden@lloydsbanking.com Sarah Robson, Senior Manager, Investor Rel
Slide 18: 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