Lloyds Banking Group Plc · LSE:LLOY
Lloyds Banking — FY2009 Earnings Presentation
71 slides from Lloyds Banking's earnings presentation, Feb 26, 2010
Slide 1: 2009 Results
2009 RESULTS 26 February 2010 Eric Daniels Group Chief Executive
Slide 2: Key Messages: A strong earnings outlook
KEY MESSAGES A strong earnings outlook 2009 was a year of major progress in shaping the future Group The core business will deliver strong financial performance Our relationship-focused model offers significant, additional, growth potential
Slide 3: 2009: Shaping the Future Lloyds Banking Group
2009: SHAPING THE FUTURE LLOYDS BANKING GROUP Delivered strong core business growth Exceeded 2009 integration objectives – synergy run-rate target increased to £2 billion Embedded Lloyds TSB risk management standards across HBOS portfolios Improved Group funding position – including £88 bill
Slide 4: 2009 Financial Overview
2009 FINANCIAL OVERVIEW Combined businesses – £m 2008 2009 % Change Total income(1) 21,355 23,964 12 Expenses (12,236) (11,609) 5 Trading surplus 9,119 12,355 35 Impairment (14,880) (23,988) (61) Joint ventures/fair value unwind (952) 5,333 Loss before tax (6,713) (6,300) 6 Statutory profit 760 1,04
Slide 5: Core Business Performance
CORE BUSINESS PERFORMANCE Strong new business growth from the operating divisions 2 million new personal current accounts RETAIL 5 million new savings accounts Gross new mortgage lending £35 billion £35 billion gross committed lending to SME/Corporate customers WHOLESALE 100,000 new Commer
Slide 6: Building Strong Core Business Momentum: Performing in line with guidance
BUILDING STRONG CORE BUSINESS MOMENTUM Performing in line with or better than recent guidance RECENT GUIDANCE 2009H2 TREND High single digit growth REVENUE GROWTH within 2 years 9 Lower in 2009H2, MARGINS rising in 2010 99 c.200 p.a. basis points COST:INCOME RATIO improvement 99 >£1.5 billion run ra
Slide 7: Building Strong Core Business Momentum
BUILDING STRONG CORE BUSINESS MOMENTUM 1. Margin outlook improving 2. Cost synergy target STRONG FINANCIAL increased PERFORMANCE 3. Impairments improving in line with guidance
Slide 8: Economic Outlook
ECONOMIC OUTLOOK Weak recovery remains most likely scenario GDP GROWTH IN CENTRAL SCENARIO House prices % change on year earlier − 5% in 2009 − 0% in 2010 2.6 1.8 2.2 Commercial property values 0.7 − (6)% in 2009 − 1% in 2010 Company failures − Peak in 2010 − Lower rate than last recession (4.
Slide 9: Building Revenue Momentum: Margin outlook improving
BUILDING REVENUE MOMENTUM Margin outlook is improving BANKING NET INTEREST MARGIN (%) DRIVERS OF FUTURE MARGIN MEDIUM 2010 TERM c.2.00% 1.83% 1.72% Asset pricing for risk 9 9 Base rate movements 9 9 Wholesale funding 8 – 2009H1 2009H2 2010 9 Positive impact 8 Negative impact – Minimal impact
Slide 10: Cost Synergy Target Increased
COST SYNERGY TARGET INCREASED £2 billion run rate per annum by the end of 2011 COST SYNERGIES KEY PROGRAMMES In year 2009 year-end 2011 target contribution run rate run rate Business model £2.0bn >£1.5bn Procurement programme £766m Property rationalisation £427m £107m IT Integration 2009H1 2
Slide 11: Impairments Improving in Line with Guidance
IMPAIRMENTS IMPROVING IN LINE WITH GUIDANCE GROUP IMPAIRMENTS (£bn) IMPAIRMENT OUTLOOK Substantial further reduction expected in (21)% 2010 and beyond 13.4 Wealth and International 1.5 2010 2011 10.6 Retail 2.2 2.6 Wholesale 9 9 2.0 Wholesale 9.7 Retail 9 9 6.0 Wealth and International 9 9 2009H1 20
Slide 12: Realising the Full Potential of the New Group
REALISING THE FULL POTENTIAL OF THE NEW GROUP OUR BUSINESS MODEL WHY WE WILL OUTPERFORM ACQUIRE NEW CUSTOMERS Continue our relationship model in the Lloyds TSB franchise BROADEN DEEPEN REACH AND OFFER RELATIONSHIP Extend the Lloyds TSB model to the enlarged franchise
Slide 13: Deepening Customer Relationships: Retail acquisition
DEEPENING CUSTOMER RELATIONSHIPS Retail – Acquiring and developing new customer relationships BETTER CROSS-SELL BETTER RELATIONSHIP AT CUSTOMER ACQUISITION DEEPENING OVER TIME Average number of product groups Product group holding over time of bought by new customers(1) customers acquired in 2007(1)
Slide 14: Deepening Customer Relationships: Existing HBOS customers
DEEPENING CUSTOMER RELATIONSHIPS Retail – Deepening relationships with existing HBOS customers SALES EFFECTIVENESS IS KEY TO IMPROVING HBOS RELATIONSHIP DEPTH For every HBOS lead-driven sale, Lloyds TSB achieves 13 sales Income opportunity from better cross sell to new HBOS sales from leads 1 HBOS
Slide 15: Deepening Customer Relationships: Existing Lloyds TSB customers
DEEPENING CUSTOMER RELATIONSHIPS Retail – deepening relationships with existing Lloyds TSB customers PERCENTAGE OF CUSTOMERS HOLDING TWO OR MORE PRODUCT GROUPS Lloyds TSB 48% 45% 47% Income opportunity from sustaining trend Lloyds TSB growth in relationship depth to achieve 55% multiple product ho
Slide 16: Deepening Customer Relationships: Wholesale corporate opportunity
DEEPENING CUSTOMER RELATIONSHIPS Wholesale – The opportunity in Corporate POTENTIAL UPLIFT IN ‘TRUSTED ADVISOR/SPECIALIST’ CUSTOMER NUMBERS Indexed, current Trusted Advisor/ Specialist customer numbers = 100 With improved product capability, ‘Trusted 200 Advisor/Specialist’ customers generate 6 ti
Slide 17: Deepening Customer Relationships: Opportunities across the Group
DEEPENING CUSTOMER RELATIONSHIPS Opportunities across the Group EXAMPLE OPPORTUNITY POTENTIAL GROUP INCOME Retail Greater relationship depth with new and ~ £500 million existing HBOS customers Sustained trend in growth of multiple ~ £250 million product holdings in Lloyds TSB franchise Wholesale
Slide 18: Key Messages: A strong earnings outlook
KEY MESSAGES A strong earnings outlook In 2009 we shaped the future Group BUILDING – Risk THE BASE – Integration – Capital and funding The core business will deliver strong financial performance DELIVERING EARNINGS – Margin outlook improving GROWTH – Cost synergy target increased – Impairments i
Slide 19: 2009 Results: Tim Tookey, Group Finance Director
2009 RESULTS 26 February 2010 Tim Tookey Group Finance Director
Slide 20: Overview: Building strong earnings momentum
OVERVIEW Building strong earnings momentum Core business in good shape; excellent progress with integration Resilient revenue performance in difficult economic environment Excellent cost performance Cost synergies target increased Lending portfolios performing in line with expectations O
Slide 21: Business Performance 2009
BUSINESS PERFORMANCE 2009(1) Resilient revenues; solid cost performance £m 2008 2009 % Change Total income, net of insurance claims 21,355 23,964 12 Expenses (12,236) (11,609) 5 Trading surplus 9,119 12,355 35 Impairment (14,880) (23,988) (61) Joint ventures/associates (952) (767) Fair value unwind
Slide 22: Combined Businesses Performance 2009
COMBINED BUSINESSES PERFORMANCE 2009 A statutory profit of over £1 billion £m 2008 2009 % Change Profit before tax – combined businesses (6,713) (6,300) 6 Integration costs – (1,096) Volatility (2,349) 478 GAPS payment – (2,500) Negative goodwill credit – 11,173 Results of BankWest and St Andrews 90
Slide 23: Divisional Performance
DIVISIONAL PERFORMANCE An improved second half performance Profit before tax £m 2008 H1 2009 H2 2009 2009 Retail 2,542 360 1,022 1,382 Wholesale (10,479) (3,208) (1,495) (4,703) Wealth and International 277 (342) (2,014) (2,356) Insurance 1,540 397 578 975 Group Operations and Central items (593) (1
Slide 24: Key Revenue Trends
KEY REVENUE TRENDS A resilient performance in a challenging economic environment £m +12% 1,498 3,452 24,807 23,964 21,355 (1,230) (403) (708) 2008 Absence Sub Liability Year-on-year PPI Other 2009 of mark-to- Total management Margin market reduction losses
Slide 25: Group Net Interest Margin
GROUP NET INTEREST MARGIN Improved margin delivered in second half 15bp 2.01% (16)bp 15bp 4bp 1.83% 1.72% (8)bp (28)bp 2008H2 Asset Lower Wholesale 2009H1 Asset Lower Wholesale 2009H2 pricing Deposit Funding pricing deposit Funding spread costs spread costs
Slide 26: Expectations for Future Margins
EXPECTATIONS FOR FUTURE MARGINS Margins expected to increase in 2010 and beyond H1 2009 H2 2009 2010 Medium term BASE RATE MOVEMENTS ASSET PRICING COST OF WHOLESALE FUNDING OVERALL MARGIN IMPACT x 9 9 9
Slide 27: Cost Trends
COST TRENDS Excellent cost management £m (5)% 12,236 2010 and 2011: Significant and (180) 430 11,609 increased cost (534) synergies (343) available Cost:income ratio targeted to improve by c. 200 basis points per 2008 US Dollar Cost Operating Business 2009 annum payment synergies lease as usual
Slide 28: Excellent Progress with Integration
EXCELLENT PROGRESS WITH INTEGRATION Ahead of schedule – cost synergy target increased In year contribution Run rate Integration benefits continue to run £m ahead of schedule 2,000 Benefits so far driven by non-IT dependent initiatives 1,250 Over 11,500 role reductions 766 £126 million procur
Slide 29: Impairment Trends Improving in Line with Guidance
IMPAIRMENT TRENDS IMPROVING IN LINE WITH GUIDANCE Overall Group impairments peaked GROUP IMPAIRMENT CHARGES (£24.0bn) RETAIL IMPAIRMENT CHARGES (£4.2bn) Run-rate of impairments has slowed in 2009H2 Significant reduction in mortgage impairment run-rate Continue to expect 2010 charge to be signi
Slide 30: Impairment Trends: Wholesale and Wealth & International
IMPAIRMENTS TRENDS IMPROVING IN LINE WITH GUIDANCE Overall Group impairments peaked WHOLESALE WEALTH & INTERNATIONAL IMPAIRMENT CHARGES (£15.7bn) IMPAIRMENT CHARGES (£4.1bn) Significant reduction in impairment charge High level of impairments in 2009H1 run-rate as expected continued into 2009H2
Slide 31: Impairment Guidance Reconfirmed
IMPAIRMENT GUIDANCE RECONFIRMED Overall Group impairments peaked RECENT 2009H2 2010 GUIDANCE PERFORMANCE OUTLOOK (1) 2010 impairments Expected to have GROUP peaked in 2009H1 9 significantly lower than 2009. Half yearly run-rate to continue RETAIL Expected to peak in 2009H2 9 2009H2 2010 impairments
Slide 32: Secured Portfolio
SECURED PORTFOLIO All new business written within risk appetite 31 Dec 09 30 Jun 09 >100% LTV >100% LTV Portfolio and >3 months and >3 months £346bn >100% LTV in arrears in arrears Specialist £32bn £5.4bn £0.7bn £1.0bn HBOS Buy to let £35bn £6.2bn £0.5bn £0.7bn LTSB £9bn Buy to let £0.9bn £0.1bn £0.
Slide 33: Trend in Secured Portfolio Arrears
TREND IN SECURED PORTFOLIO ARREARS Mortgage portfolio arrears continue to improve CUSTOMERS NEW TO ARREARS PORTFOLIO BALANCES 3 MONTHS+ IN ARREARS Volume ‘000’s % of total cases >3 months in arrears 8% 7% 6% 5% 181 196 4% 166 158 3% 2% 1% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 H1 08 H2 08 H1 09 H2 0
Slide 34: Expected Unwind of Acquisition Related Adjustments
EXPECTED UNWIND OF ACQUISITION RELATED ADJUSTMENTS £bn 6.1 £6.1 billion unwind during 2009 c£2.5 billion expected to c2.5 unwind in 2010 Smaller level of expected unwind in 2011 - 2013 c0.5 c0.5 Future unwind subject to c0.2 variation according to timing of future legacy 2009 2010 2011 2012
Slide 35: Summary: Earnings Outlook
SUMMARY Earnings outlook Improved outlook for margins IMPROVING OUR Substantial cost synergies targeted EARNINGS Impairments to reduce substantially OUTLOOK Financial performance expected to improve significantly RIGHTSIZING OUR BALANCE SHEET IMPROVING OUR FUNDING AND LIQUIDITY POSITION MAIN
Slide 36: Rightsizing Our Balance Sheet: £60 billion asset reduction
RIGHTSIZING OUR BALANCE SHEET £60 billion asset reduction in 2009 £bn 300 (15) (15) 240 (30) £200 billion expected to run-off over 5 years £60 billion asset reduction 170 during 2009 2008 Impairments Other Treasury 2009 net Assets reductions
Slide 37: Rightsizing Our Balance Sheet: £300 billion run-off portfolio
RIGHTSIZING OUR BALANCE SHEET £300 billion portfolio of assets in run-off £bn 300 Treasury 100 240 Further reduction of Assets c £140 billion by end 70 of 2014 Flexibility to reduce 100 wholesale funding Customer Assets 200 30 levels, improve 170 capital ratios or 70 grow customer relationship l
Slide 38: Summary: Rightsizing Our Balance Sheet
SUMMARY Rightsizing our balance sheet Improved outlook for margins IMPROVING OUR Substantial cost synergies targeted EARNINGS Impairments to reduce substantially OUTLOOK Financial performance expected to improve significantly RIGHTSIZING £200 billion non-core asset reduction over 5 years O
Slide 39: Reducing Our Wholesale Funding Requirement
REDUCING OUR WHOLESALE FUNDING REQUIREMENT Asset run-off to reduce our wholesale funding requirements Funding our banking assets(1) £bn 877 Asset run-off expected to significantly reduce wholesale funding requirement over next 804 few years Customer 381 deposits 371 Refinancing of wholesale fund
Slide 40: Diverse Funding Sources with Prudent Maturity Profile
REDUCING OUR WHOLESALE FUNDING REQUIREMENT Diverse funding sources with prudent maturity profile 31 Dec 31 Dec WHOLESALE £325.5bn £bn 2008 2009 Bank deposits(1) 54.9 48.6 Less than 1 year £161.8bn Certificates of deposit 77.5 50.9 Medium-term notes 63.5 89.7 Covered bonds 29.1 28.1 Commercial paper
Slide 41: Improving Our Wholesale Funding Maturity Profile
REDUCING OUR WHOLESALE FUNDING REQUIREMENT Improving our wholesale funding maturity profile WHOLESALE FUNDING MATURITY PROFILE TERM ISSUANCE £bn Expected public term issuance of 343 c. £20–25 billion p.a. over next 3 years 326 2010 term issuance already completed: 151 > 1 yr – December 2009 $2 b
Slide 42: Improving Our Liquidity Position
IMPROVING OUR LIQUIDITY POSITION A material increase in our liquid assets £bn 150.8 62.4 Liquidity buffer of 19% of total net banking assets 104.5 £88 billion primary FSA Secondary eligible liquidity liquidity 58.3 56.2 £88bn A multiple of current Excess primary liquidity 22.6 regulatory requi
Slide 43: Summary: Improving Our Funding and Liquidity Position
SUMMARY Improving our funding and liquidity position Improved outlook for margins IMPROVING OUR Substantial cost synergies targeted EARNINGS Impairments to reduce substantially OUTLOOK Financial performance expected to improve significantly RIGHTSIZING £200 billion non-core asset reduction
Slide 44: Maintaining a Robust Capital Position: Risk-weighted assets
MAINTAINING A ROBUST CAPITAL POSITION Reducing our risk-weighted assets £bn 498.5 13.8 493.3 21.0 Reduction in assets partly offset by impact of Basel procyclicality (40.0) Further risk-weighted asset reductions expected over next few years 2008 Reduction Pro Other 2009 in cyclicality assets
Slide 45: Maintaining a Robust Capital Position: Capital ratios
MAINTAINING A ROBUST CAPITAL POSITION Improving capital ratios Core Tier 1 Capital Ratio 3.4% 0.1% 0.3% 8.4% 8.1% 6.2% 31 December 2009 (1.6)% Core tier 1 8.1% Tier 1 9.6% Total 12.4% Pro-forma Capital RWA 2009 2009 Feb 2010 Adjusted Jan 2009 Raised (1) reductions Trading/ issuance Other (2) (1) Exc
Slide 46: Possible Impact of Basel Committee's Consultative Proposals
MAINTAINING A ROBUST CAPITAL POSITION Possible impact of Basel Committee’s consultative proposals Regulatory capital required Not yet calibrated Raising the quality of the capital base Remove insurance capital from core tier 1 capital Deferred tax assets Other deductions from core tier 1 capital Res
Slide 47: Summary: Maintaining a Robust Capital Position
SUMMARY Maintaining a robust capital position Improved outlook for margins IMPROVING OUR Substantial cost synergies targeted EARNINGS Impairments to reduce substantially OUTLOOK Financial performance expected to improve significantly RIGHTSIZING £200 billion non-core asset reduction over 5
Slide 48: Summary: A Challenging Year, but One of Significant Achievement
SUMMARY A challenging year, but one of significant achievement Improved outlook for margins IMPROVING OUR Substantial cost synergies targeted EARNINGS Impairments to reduce substantially OUTLOOK Financial performance expected to improve significantly RIGHTSIZING £200 billion non-core asset
Slide 49: Appendix
APPENDIX LLOYDS BANKING GROUP we
Slide 50: Loans and Advances to Corporate Customers
LOANS AND ADVANCES TO CORPORATE CUSTOMERS Loans and advances to customers £660billion(1) 31 December 2009 Personal other Property 7% companies 13% Construction 2% Financial, business Manufacturing & other services 2% 10% Corporate Other 1% Agriculture, forestry & fishing 1% Lease financing & hire pu
Slide 51: Mortgage Portfolio
MORTGAGE PORTFOLIO UK mortgage portfolio £346 billion 31 December 2009 Specialist £32bn Prime £270bn Buy to let (HBOS) £35bn Buy to let (Lloyds TSB) £9bn 4
Slide 52: Mortgage Portfolio LTVs
MORTGAGE PORTFOLIO LTVs Buy to let Buy to let Prime Lloyds TSB HBOS Specialist Group Average LTVs 51.0% 66.8% 77.8% 72.3% 54.8% New business 2009 LTVs 58.3% 61.7% 67.3% 73.7% 59.3% <= 80% LTV 61.5% 56.0% 40.1% 41.0% 57.3% > 80–90% LTV 14.3% 14.7% 20.3% 21.5% 15.6% > 90–100% LTV 12.2% 19.8% 21.8% 20.
Slide 53: Mortgage Portfolio
MORTGAGE PORTFOLIO 31 Dec 09 30 June 09 >100% LTV >100% LTV Portfolio and >3 months and >3 months £346bn >100% LTV in arrears in arrears Specialist £32bn-9.1% £5.4bn-17.2% £0.7bn 2.3% £1.0bn 3.1% HBOS Buy to let £35bn-10.1% £6.2bn-17.8% £0.5bn 1.3% £0.7bn 2.1% LTSB Buy to let £9bn-2.7% £0.9bn-9.4% £
Slide 54: Mortgage Arrears Trends
MORTGAGE ARREARS TRENDS % of total cases >3 months in arrears 8% 7% 6% 5% 4% Market 2.4% 3% 2% 1% 0% Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 CML total market (1) Prime Specialist HBOS buy to let Lloyds TSB buy to let (1) Source: Council of Mortgage Lenders Note: chart
Slide 55: Trend in Mortgage Portfolio Arrears
TREND IN MORTGAGE PORTFOLIO ARREARS Customers new to arrears Volume ‘000’s 196 181 166 158 H1 08 H2 08 H1 09 H2 09 8
Slide 56: Mortgage Portfolio – Properties in Possession
MORTGAGE PORTFOLIO – PROPERTIES IN POSSESSION Properties in possession New possessions (% of mortgage cases) (% total cases) 0.14% 0.09% 0.08% 0.06% CML Lloyds CML Lloyds average(1) Banking average(1) Banking Group Group 31 Dec 2009 31 Dec 2009 (1) Council of Mortgage Lenders 2009Q4 9
Slide 57: Mortgage Portfolio – Properties in Possession
MORTGAGE PORTFOLIO – PROPERTIES IN POSSESSION Properties in possession (% of mortgage cases) 0.20% Peaked in 2008 Q3 Lloyds Banking Group 0.15% 0.10% 0.05% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 10
Slide 58: Mortgage Portfolio – New Possessions
MORTGAGE PORTFOLIO – NEW POSSESSIONS New possessions (% total cases) 0.09% 0.09% 0.07% 0.06% CML(1) LBG CML(1) LBG 31 Dec 2008 31 Dec 2009 (1) Source: Council of Mortgage Lenders 11
Slide 59: Unsecured Lending Portfolio
UNSECURED LENDING PORTFOLIO Unsecured portfolio £32.1 billion 31 December 2009 Other Credit cards £0.3bn £12.3bn Transaction banking £2.6bn Loans £16.9bn Cards Loans Impairment charge as a % of average lending 11.4% 7.7% 12
Slide 60: Loans and Advances to Corporate Customers
LOANS AND ADVANCES TO CORPORATE CUSTOMERS Loans and advances to corporate customers £249 billion(1) 31 December 2009 Transport Post and distribution and communications hotels 1% 14% Property companies 35% Construction 6% Manufacturing 6% Energy and water supply 1% Agriculture, forestry and fishing F
Slide 61: Commercial/Residential Property and Housebuilder Lending
COMMERCIAL/RESIDENTIAL PROPERTY AND HOUSEBUILDER LENDING £92.2bn UK £61.8bn Overseas (1) £30.4bn 33% 67% Gross (pre FV adjustment and impairment) Includes Joint Ventures (1) Includes lending to non UK residents, and excludes residential mortgages 14
Slide 62: UK Commercial/Residential Property & Housebuilder Lending
UK COMMERCIAL/RESIDENTIAL PROPERTY & HOUSEBUILDER LENDING Commercial property (£41.0bn) Residential property (£17.3bn) Through the cycle policy, 55% Housing Associations (local supporting existing £61.8bn authority cash flows) customer franchise Larger residential property Some concentration
Slide 63: Overseas Property Lending
OVERSEAS PROPERTY LENDING (1) Ireland (£11.7bn) Australia (£6.3bn) 55% property investment of £30.4bn (1) 43% property investment of which 34% is impaired which 14% is impaired 45% property development of 46% property development of which 75% is impaired which 29% is impaired 11% Property
Slide 64: Leveraged Finance Lending
LEVERAGED FINANCE LENDING Lloyds TSB Acquisition Finance (£5.6bn) HBOS Leveraged Finance (£8.8bn) A highly selective origination Includes loans and advances strategy £17.6bn transferred from HBOS Integrated Well spread by sector Finance business during 2009 Predominantly UK focused Well sp
Slide 65: Risk Capital Portfolio at Carry Value
RISK CAPITAL PORTFOLIO AT CARRY VALUE (1) Manage for Growth Manage for Value Lloyds Development Capital (£1.1bn) Bosif Investments (£0.5bn) Direct equity business being managed for growth Portfolio of c.60 investments into UK based MBO’s Portfolio is highly diversified by sector, geography and
Slide 66: Treasury Debt Securities Portfolio
TREASURY DEBT SECURITIES PORTFOLIO Loans and Available Fair Value 31.12.09 Advances (£bn) for sale (£bn) through P&L (£bn) Total (£bn) Asset Backed Securities 29.3 12.4 1.2 42.9 Covered bonds - 3.9 - 3.9 Bank / Financial Institution 1.6 15.7 3.2 20.5 Fixed and Floating Rate Notes Bank Certificate of
Slide 67: Asset Backed Securities Portfolio
ASSET BACKED SECURITIES PORTFOLIO Net exposure Carry Value as at 31.12.2009 (£bn) 31.12.2009 (%) Mortgage backed securities – US RMBS 4.8 54 – Non-US RMBS 9.7 90 – CMBS 3.7 80 18.2 75 Collateralised Debt Obligations – Corporate 0.1 91 – Commercial Real Estate 0.5 51 – CLO 5.8 91 – Other 0.2 14 6.5 7
Slide 68: Impairment Losses on Loans and Advances to Customers
IMPAIRMENT LOSSES ON LOANS AND ADVANCES TO CUSTOMERS 2008 2009 % of Average lending Impairment £m £m 2008 2009 Retail 3,695 4,221 0.97 1.11 – Secured (mortgages) 1,295 789 0.38 0.23 – Unsecured 2,400 3,432 6.65 9.94 Wholesale 7,869 14,031 3.32 5.92 Wealth and International 695 4,058 1.05 6.04 Total
Slide 69: Impaired Asset Ratios – Group
IMPAIRED ASSET RATIOS – GROUP Wealth and 2009 Retail Wholesale International Group Loans and advances to customers (gross) £378.0bn £210.9bn £69.4bn £660.0bn Impaired assets £11,015m £35,114m £12,704m £58,833m Impaired assets as % of closing balance 2.9% 16.6% 18.3% 8.9% Impairment provisions £3,806
Slide 70: Net Tangible Assets
NET TANGIBLE ASSETS NET TANGIBLE ASSETS (£BN) NET TANGIBLE ASSETS PER SHARE (P) 13.1 37.1 4.0 (3.7) 140 23.7 (38) (38) 58 (6) 31 Dec Placing Rights 2009 31Dec 31 Dec Placing Rights 2009 31 Dec 2008 & open Issue earnings 2009 2008 & open Issue earnings 2009 offer impact offer impact 23
Slide 71: 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