Lloyds Banking Group plc · LSE:LLOY
Lloyds Banking — Q1 2011 Earnings Presentation
16 slides from Lloyds Banking's earnings presentation, May 5, 2011
Slide 1: Q1 2011 Results
Q1 2011 RESULTS 5 May 2011 Tim Tookey Group Finance Director
Slide 2: Agenda
AGENDA Context Q1 2011 key highlights Further balance sheet de-risking Payment Protection Insurance provision Combined businesses trading performance 2
Slide 3: Q1 2011 Key Highlights
Q1 2011 KEY HIGHLIGHTS Significant further progress in reducing the Group’s risk profile £21bn reduction in non-core assets Funding position further secured through deposit growth and term issuance £26bn reduction in government and central bank funding Appropriate Payment Protection Insura
Slide 4: Good progress on non-core asset reductions
GOOD PROGRESS ON NON-CORE ASSET REDUCTIONS NON-CORE ASSETS £bn 300 £126bn Further £21 billion reduction in non-core assets 236 Reduction includes sales of 195 £21bn treasury assets of £10.7 billion 174 Sales of treasury assets headline losses of £426 million broadly offset by accelerated f
Slide 5: Further progress in our wholesale funding with maturity profile maintained
FURTHER PROGRESS IN OUR WHOLESALE FUNDING WITH MATURITY PROFILE MAINTAINED PUBLIC TERM ISSUANCE WHOLESALE FUNDING MATURITY PROFILE £bn £bn 343 326 298 303 £30bn 44% > 1 yr 50% 50% 49% £13.5bn 56% < 1 yr 50% 50% 51% 2010 Q1 2011 December December December March 2008 2009 2010 2011 5
Slide 6: Growing customer deposit base
GROWING CUSTOMER DEPOSIT BASE CUSTOMER DEPOSITS £bn 2% 389.3 Increase in customer 382.5 deposits of £6.8 billion in Q1 371.2 Continuing to build current account and savings franchises Market for customer deposits remains competitive December December March 2009 2010 2011 6
Slide 7: Further improvements in our loan to deposit ratio
FURTHER IMPROVEMENTS IN OUR LOAN TO DEPOSIT RATIO LOAN TO DEPOSIT RATIO Reported 169% 154% Loan to deposit ratio continues 148% to improve due to: – Non-core assets reduction – Excellent relationship Core 128% deposit growth 119% 116% Loan to deposit ratio on core book improves further to 116% D
Slide 8: Reduction in government and central bank funding
REDUCTION IN GOVERNMENT AND CENTRAL BANK FUNDING GOVERNMENT & CENTRAL BANK FUNDING £bn 157.2 Substantial reduction in liquidity support from government and central bank sources of Other(1) 96.6 26.2 £26.2 billion 107.2 Other(2) 70.4 £70.4 billion of government and 51.2 Other central bank funding
Slide 9: Payment Protection Insurance provision
PAYMENT PROTECTION INSURANCE PROVISION 20 April 2011 - High Court dismisses BBA application to seek judicial review Discussions with the FSA have also increased clarity around the implementation of Policy Statement on customer complaints and redress We have concluded that customer contact and
Slide 10: A strong capital position
A STRONG CAPITAL POSITION CORE TIER 1 RATIO RISK-WEIGHTED ASSETS % £bn 10.2% 10.0% 493.3 8.1% 406.4 390.9 Non- 188.7 core 141.0 130.7 Core 304.6 265.4 260.2 December December March December December March 2009 2010 2011 2009 2010 2011 10
Slide 11: Business performance - income
BUSINESS PERFORMANCE - INCOME Q1 2011 Q4 2010 Change Total income(1) £4,805m £5,437m (12)% Underlying income(2) £5,203m £5,748m (9)% Underlying income excluding loss on (2)% sale of treasury assets Average interest earning £612bn £629bn (3)% banking assets Margin 2.07% 2.12% (1) Net of insurance cla
Slide 12: Business performance
BUSINESS PERFORMANCE Q1 2011 Q4 2010 Change Operating expenses £2,751m £2,787m 1% Integration savings run-rate £1,570m £1,379m Impairment £2,608m £3,755m 31% Profit before tax(1) £284m £276m 3% Statutory loss before tax (£3,470m) £(1,686)m (1) Combined businesses basis 12
Slide 13: Impairment charge
IMPAIRMENT CHARGE DIVISIONAL BREAKDOWN £m 3,755 Impairments charge in Q1 2,093 2011 c. £500 million above 2,608 2,415 expectation, due to Ireland 1,144 Ireland 699 Impairment charge in the Other W&I 151 462 remainder of the portfolio in 297 Wholesale 983 431 line with expectations 581 769 Retail
Slide 14: Summary
SUMMARY Significant further progress in reducing the Group’s risk profile £21bn reduction in non-core assets Funding position further secured through deposit growth and term issuance £26bn reduction in government and central bank funding Appropriate Payment Protection Insurance provision
Slide 15: Forward looking statements
FORWARD LOOKING STATEMENTS This announcement contains forward looking statements with respect to the business, strategy and plans of the Lloyds Banking Group, its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, incl
Slide 16: 2011 Q1 Results
2011 Q1 RESULTS 5 May 2011 Tim Tookey Group Finance Director