Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — Morgan Stanley Financials Conference 2017
14 slides from Lloyds Banking's conference presentation, Mar 21, 2017
Slide 1: Morgan Stanley Financials Conference
TITLE MORGAN SLIDE IS IN STANLEY SENTENCE FINANCIALS CASE. CONFERENCE • GREEN BACKGROUND. António Horta-Osório • 21 March 2017 00 Month 0000 Presenters Name
Slide 2: Delivering for our customers and shareholders
DELIVERING FOR OUR CUSTOMERS AND SHAREHOLDERS Clear strategic focus and differentiated business model providing competitive advantage • Clear strategy: UK retail and commercial focus Our business model • Multi-brand, multi-channel distribution Simple, low risk, customer focused, UK retail and commer
Slide 3: UK Economy
UK ECONOMY Resilient UK economic performance; UK economy enters 2017 from a position of strength Real GDP growth(1) (%) Debt to GDP (%) 2.5 Total UK debt to GDP(3) 2.0 257 258 263 256 250 249 253 100 1.5 1.0 90 0.5 80 0.0 70 UK Germany US Canada France Japan Italy Q4 Q4 Q4 Q4 Q4 Q4 Q3 2010 2011 2012
Slide 4: UK Economy: unsecured lending
UK ECONOMY UK unsecured lending has grown but affordability remains good and the recent consumer debt-to-income increase has been driven by student loans Unsecured lending (%) Consumer debt-to-income by product(4) (%) Underlying annual growth in UK lending balances(1) 20% 20 15 15% 10 10% 5 0 5% -5
Slide 5: Differentiated business model
DIFFERENTIATED BUSINESS MODEL Our simple, low risk, UK focused business model is now delivering increased statutory profit as well as strong capital generation Profit progression (£bn) • Simple, efficient and low risk business model provides 7.8 8.1 7.9 competitive advantage 6.2 2.6 • Business deliv
Slide 6: Simple, efficient business model
SIMPLE, EFFICIENT BUSINESS MODEL Being an efficient bank is a central element of our differentiated business model Operating costs trajectory (£bn) • Our cost management process includes a matrix (20)% management approach to operating costs and a robust 10.1 10.0 9.3 8.9 8.7 investment programme met
Slide 7: Simple, efficient business model
SIMPLE, EFFICIENT BUSINESS MODEL Longer term cost opportunities will allow the Group to become even more efficient End-to-End Process Extend approach to end-to-end journey transformations Transformation & Digitisation across the whole organisation including central functions Further Business Simplif
Slide 8: Low risk business model
LOW RISK BUSINESS MODEL Credit quality remains strong with no signs of deterioration in the portfolio Impairment charge (£m) Asset quality ratio (bps) 13,181 9,787 231(2) 192(2) 135 201 88 5,697 52 162 28 28 104 3,004 58 1,102 23 14 15 568 645 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2
Slide 9: Low risk business model
LOW RISK BUSINESS MODEL Business transformation has enabled significant de-risking of the balance sheet Top 10 global bank RWA reductions since 2010(1) CDS spreads 28 Feb % reduction £bn reduction 2017 since end 2010 since end 2010 78bps Bank A 51% £237bn 72bps Lloyds 47% £191bn 59bps Bank B 29% £68
Slide 10: Creating the best customer experience
CREATING THE BEST CUSTOMER EXPERIENCE Significant growth across the digital channel and major progress in our customer journey transformations delivered Needs met via digital(1) (%) Customer journey transformation 75 65 69 73 69 of approved applications proceed 62 59 61 55 52 54 Mortgages 55% to off
Slide 11: Delivering sustainable growth
DELIVERING SUSTAINABLE GROWTH Well positioned to grow the business where we are underrepresented LBG market shares(1) (%) MBNA acquisition rationale Current account volumes 25 • Creates a best in class UK credit card business Retail deposit balances 20 – Combined c.£16bn prime credit card portfolio
Slide 12: Strong relative positioning on key metrics
STRONG RELATIVE POSITIONING ON KEY METRICS Strong performance versus peers Underlying return on tangible equity(1) (%) Dividend yield(3) (%) 4.5 14.1 4.1 3.9 7.9 4.4 3.6 1.6 0.3 LBG Bank A Bank B Bank C Bank D UK peer LBG FTSE350 Eurostoxx average Banks Banks Evolution of price to TNAV multiple(2) T
Slide 13: Summary
SUMMARY Confidence in the Group’s future prospects is reflected in the dividend and our strong financial targets Financial targets • Our differentiated business model is delivering – Simple, efficient and low risk business model • Strong financial targets reflecting strength of provide competitive a
Slide 14: Forward looking statement and basis of presentation
FORWARD LOOKING STATEMENT 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 perf
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