Lloyds Banking Group plc · LSE:LLOY
Lloyds Banking — Investor Presentation (November 2020)
36 slides from Lloyds Banking's investor presentation, Nov 9, 2020
Slide 1: Board Corporate Governance Event 2020
Board Corporate Governance Event 2020 9 November 2020
Slide 2: Company representation: today's presenters
Classification: Public Company representation Today’s presenters In attendance Lord Blackwell Alan Dickinson Chairman Deputy Chairman Chair of the Nomination & Governance Committee Senior Independent Director Sara Weller, CBE Robin Budenberg Independent Director Independent Director Chair of the Res
Slide 3: Agenda – Board Corporate Governance Event
Classification: Public Agenda – Board Corporate Governance Event Presentation Presenter 12.30 Introduction and Group Board Lord Blackwell 12.55 Responsible Business Committee Sara Weller 13.20 Board Risk Committee Nick Prettejohn 13.40 Remuneration Committee Stuart Sinclair 14.00 Audit Committee Sar
Slide 4: Strategic challenges and our response
Classification: Public Strategic challenges and our response Strategic challenges Our response External challenges ▪ Strategic transformation to “bank of the future” ▪ Macro-environment: Covid economic uncertainty; regulatory constraints on dividends; low interest rate - Unique multi-brand, integrat
Slide 5: Board's focus areas in 2020 and emerging priorities for 2021
Classification: Public Board’s focus areas in 2020 and emerging priorities for 2021 2020 2021 COVID-19 response, customers and colleagues Strategic update – SR21 Review strategic plan (separate strategy sessions in Helping Britain Recover – customer support and June and November) conduct issues Cust
Slide 6: Our response to Covid-19 – Part of the Solution
Classification: Public Our response to Covid-19 – “Part of the Solution” Rapid response – working closely with the Government and regulators Beyond the crisis ▪ Circa £11bn lending to businesses through Government-backed schemes Remain focused on working with all Customers ▪ Around 1.2m customers su
Slide 7: Leadership succession
Classification: Public Leadership succession CEO search underway NomCo initiated a Robin Budenberg search process for a joined the Board on Search for António’s successor initiated new Chairman October 1st and will take over as Chair on January 1st 2021 António completely focused with the executive
Slide 8: Our governance structure
Classification: Public Our governance structure Board Committees Committee members Remuneration Nomination & Governance Responsible Nomination & business Joined Governance Audit Risk Committee Audit Speak Up Sub Lord Blackwell 2012 ✓ ✓ ✓ C Committee Committee Alan Dickinson 2014 ✓ ✓ ✓ ✓ ✓ Board IT a
Slide 9: Board skills and diversity
Classification: Public Board skills and diversity Board skills matrix Board diversity (Skills and experience, non-executive directors only) Gender Age Retail/Commercial banking 9 out of 10 A B C Financial markets/wholesale A 8 out of 10 B banking/corporate clients Insurance 8 out of 10 A Male (8) A
Slide 10: Q&A – Lord Blackwell
Classification: Public Q&A Lord Blackwell Chairman Chair of the Nomination & Governance Committee 10
Slide 11: Responsible Business Committee
Classification: Public Responsible Business Committee Sara Weller Chair of the Responsible Business Committee 11
Slide 12: Our approach to responsible business – Helping Britain Prosper
Classification: Public Our approach to responsible business – Helping Britain Prosper Our approach Helping Britain Prosper focus areas ▪ Embracing responsibility to help address UK’s ▪ Helping the transition to a sustainable, low social, economic and environmental challenges carbon economy ▪ Operati
Slide 13: Focus areas in 2020 and emerging priorities for 2021
Classification: Public Focus areas in 2020 and emerging priorities for 2021 2020 2021 Helping Britain Prosper plan How we look to Help Britain Recover Societal response to Covid-19 pandemic Society of the Future Environmental sustainability Environmental sustainability Mental health Mental health Et
Slide 14: Our stand for racial equality
Classification: Public Our stand for racial equality Our targets Race Action Plan Announced in July our Race Action Plan ▪ Colleague advisory boards made up of with commitment to increase Black, Asian & Minority Ethnic colleagues Black representation in senior roles from 0.6% to at least 3% by ▪ Wor
Slide 15: Environmental sustainability
Classification: Public Environmental sustainability Our targets Actions taken ▪ Provided >£6bn in green finance since 2016 through sustainable finance initiatives Ambitious goal to reduce the carbon emissions ▪ Supported >40 renewable energy projects, equalling power generation for 5.1m homes we fin
Slide 16: Sector statements
Classification: Public Sector statements Managing our sector risk appetite Existing sector statements Power ▪ Managing our risk appetite to a number of sectors is a critical part of our sustainability strategy Coal ▪ Our 12 external sector statements set out our risk Oil and Gas appetite for lending
Slide 17: Impact in our communities
Classification: Public Impact in our communities Our targets Actions taken during the pandemic ▪ Donated >£25m to our four independent Guaranteed £25.5m of funding charitable Foundations in 2020 to our charitable Foundations ▪ 500 colleagues volunteered at 75 Foundation in 2021 to continue vital wor
Slide 18: Committed to take action
Classification: Public Committed to take action Immediate action required ESG at the heart of the Group purpose ▪ Environmental sustainability remains an existential ▪ Board is fully engaged and committed threat to the economy and the whole world ▪ Oversight through the Board’s Responsible - We rema
Slide 19: Q&A – Sara Weller
Classification: Public Q&A Sara Weller Chair of the Responsible Business Committee 19
Slide 20: Board Risk Committee
Classification: Public Board Risk Committee Nick Prettejohn Chair of the Board Risk Committee 20
Slide 21: Focus areas in 2020 and emerging priorities for 2021
Classification: Public Focus areas in 2020 and emerging priorities for 2021 2020 2021 Impact of Covid-19 Support for customers impacted by Covid-19 Climate risk Climate risk Stress testing Stress testing Customers in financial difficulty Data risk Operational resilience Technology risk People risk M
Slide 22: Credit impact of Covid-19
Classification: Public Credit impact of Covid-19 Payment holidays Lending in key impacted sectors (% of total matured balances) (£bn) 4% 6% 2% 7% Oil & gas 70% 1.4 2.7 15% 14% 15% 10% Matured payment holidays Retail non-food 2.3 1.7 19% Auto. dealerships1 1.7 2.2 2% Construction 1.3 1.7 34% 82% 80%
Slide 23: Cyber threat during Covid-19
Classification: Public Cyber threat during Covid-19 No material change to cyber threat Looking forward ▪ Covid-19 related phishing campaigns and malware, Continue to monitor for any change in particularly in H1 the threat or attackers’ methods, ▪ Increase in internal low-level data loss prevention i
Slide 24: Climate risk
Classification: Public Climate risk Climate risk now incorporated into our Climate risk assessed as part of a risk management framework broader, new ESG rating framework ▪ Climate risk established as a new primary risk type ▪ A new climate risk assessment indicator tool is in pilot to help better un
Slide 25: Q&A – Nick Prettejohn
Classification: Public Q&A Nick Prettejohn Chair of the Board Risk Committee 25
Slide 26: Remuneration Committee
Classification: Public Remuneration Committee Stuart Sinclair Chair of the Remuneration Committee 26
Slide 27: Key points of the new remuneration policy
Classification: Public Key points of the new remuneration policy Core aims for the new policy Key changes ✓ Pensions allowances reduced for all Executive Directors to 15%, aligned with the workforce ✓ 8% reduction in fixed pay and c.30% reduction in Simpler reward package total remuneration potentia
Slide 28: Reflecting on shareholder feedback
Classification: Public Reflecting on shareholder feedback Market feedback Our response ▪ LTSP opportunity provides insufficient discount ✓ Consultations to commence with broad from previous LTIP selection of stakeholders ahead of 2021 implementation ▪ Pre-grant test in LTSP is considered unnecessary
Slide 29: 2020 remuneration in context
Classification: Public 2020 remuneration in context ▪ No annual bonus awards for Executive Directors and Group Executive Committee for 2020 ▪ No softening of performance conditions of in-flight GOS (LTIP) awards to reflect Covid-19 ▪ Committee will be looking at all factors including shareholder exp
Slide 30: Q&A – Stuart Sinclair
Classification: Public Q&A Stuart Sinclair Chair of the Remuneration Committee 30
Slide 31: Audit Committee
Classification: Public Audit Committee Sarah Legg Chair of the Audit Committee 31
Slide 32: Audit committee governance structure
Classification: Public Audit committee governance structure Committee of the Boards of: Committee of the Boards of: ▪ Lloyds Banking Group plc ▪ Lloyds Bank plc ▪ HBOS plc ▪ Bank of Scotland plc Alignment in membership Group Audit Committee RFB Audit Committee and meetings where possible Insurance N
Slide 33: Focus areas in 2020
Classification: Public Focus areas in 2020 Key accounting issues Risk and other issues Portfolio impairment review Group audit Coronavirus implications Speak up Conduct and litigation (incl. PPI) FRC audit quality inspection Pension scheme assumptions Audit reform Deferred tax assets and tax uncerta
Slide 34: External audit & change of auditors
Classification: Public External audit & change of auditors External audit Audit fees ▪ PWC to complete YE2020 audit and then step ▪ Rigorous process requiring approval of non-audit down as required by the Companies Act 2006 assignments with fees above a “de minimis” limit ▪ Fees are closely controll
Slide 35: Q&A – Sarah Legg
Classification: Public Q&A Sarah Legg Chair of the Audit Committee 35
Slide 36: Thank you for joining the event!
Classification: Public Thank you for joining the event! 36
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