2025 results

About this update from Lloyds Banking Group Plc

[{"type":"text","content":"\n \n   \n   \n   \n   \n   \n   \n   \n   \n Lloyds Banking Group plc \n 2025 results \n 29 January 2026 \n   \n   \n   \n \n \n \n CONTENTS \n \n \n \n \n Results for the full year \n \n \n 1 \n \n \n \n \n Income statement (underlying basis) A and key balance sheet metrics \n \n \n 3 \n \n \n \n \n Quarterly information A \n \n \n 4 \n \n \n \n \n Balance sheet analysis \n \n \n 5 \n \n \n \n \n Group results - statutory basis \n \n \n 6 \n \n \n \n \n Group Chief Executive's statement \n \n \n 7 \n \n \n \n \n Summary of Group results A \n \n \n 9 \n \n \n \n \n \n \n \n   \n \n \n \n \n Divisional results \n \n \n   \n \n \n \n \n Segmental analysis - underlying basis A \n \n \n 18 \n \n \n \n \n Retail \n \n \n 19 \n \n \n \n \n Commercial Banking \n \n \n 21 \n \n \n \n \n Insurance, Pensions and Investments \n \n \n 23 \n \n \n \n \n Equity Investments and Central Items \n \n \n 27 \n \n \n \n \n \n \n \n   \n \n \n \n \n Risk management \n \n \n   \n \n \n \n \n Principal risks and uncertainties \n \n \n 29 \n \n \n \n \n Capital risk \n \n \n 30 \n \n \n \n \n Credit risk \n \n \n 35 \n \n \n \n \n Liquidity risk \n \n \n 48 \n \n \n \n \n Interest rate sensitivity \n \n \n 50 \n \n \n \n \n \n \n \n   \n \n \n \n \n Statutory information \n \n \n   \n \n \n \n \n Condensed consolidated financial statements (unaudited) \n \n \n 51 \n \n \n \n \n Consolidated income statement (unaudited) \n \n \n 51 \n \n \n \n \n Consolidated statement of comprehensive income (unaudited) \n \n \n 52 \n \n \n \n \n Consolidated balance sheet (unaudited) \n \n \n 53 \n \n \n \n \n Consolidated statement of changes in equity (unaudited) \n \n \n 54 \n \n \n \n \n Consolidated cash flow statement (unaudited) \n \n \n 56 \n \n \n \n \n Notes to the condensed consolidated financial statements (unaudited) \n \n \n 57 \n \n \n \n \n \n \n \n   \n \n \n \n \n Key dates \n \n \n 61 \n \n \n \n \n Basis of presentation \n \n \n 61 \n \n \n \n \n Alternative performance measures \n \n \n 62 \n \n \n \n \n Forward-looking statements \n \n \n 68 \n \n \n \n \n Contacts \n \n \n   \n \n \n \n \n Preliminary results \n The financial information contained in this document is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. \n Forward-looking statements \n This news release contains forward-looking statements. For further details, reference should be made to page 68 . \n Alternative performance measures \n The Group uses a number of alternative performance measures, including underlying profit, in the description of its business performance and financial position. These measures are labelled with a superscript 'A' throughout this document, with the exception of content on pages 1 to 2 and pages 7 to 8 which is, unless otherwise stated, presented on an underlying basis. Further information on these measures is set out on page 62 . \n \n \n \n RESULTS FOR THE FULL YEAR \n \"In 2025, we entered the second phase of our five year strategy and continued to deliver for customers, shareholders and wider stakeholders. As our strategic transformation accelerates into 2026, we remain guided by our purpose of Helping Britain Prosper in driving positive change in areas where we can have impact at scale and create value. \n The Group demonstrated sustained strength in financial performance in 2025, including in the final quarter, with continued balance sheet and income growth, as well as strong cost discipline and credit performance. This performance enables total shareholder distributions of c.£3.9 billion for the year.  \n Looking ahead to 2026 and the culmination of the five year strategy we set out in 2022, our continued business momentum and strategic delivery enable us to upgrade guidance. The sustained strength in performance means we are well positioned for 2026 and beyond. Having entered this year on a positive trajectory, I look forward to sharing more detail on the next stage of the Group's strategy, beyond the current plan, in July.\" \n Charlie Nunn, Group Chief Executive \n Delivering on our purpose-driven strategy, confident in delivering 2026 strategic outcomes \n •  Diversified revenue growth across the business through focusing on building the core franchise, deeper customer relationships, developing high value business areas and cross-Group collaboration \n •  Delivered £1.4 billion of annualised additional revenues from strategic initiatives in 2025; now confident in delivering c.£2 billion by the end of 2026 (ahead of previous target of c.£1.5 billion) \n •  Enhancing operating leverage through transforming delivery capabilities and capitalising on scale, driving gross cost savings of £1.9 billion since 2021 \n •  Progress in digital capabilities to innovate at scale and reinforce competitive strength, driving revenue and efficiency opportunities, as highlighted at the Digital and AI seminar in November 2025. Focused on extending leadership position across new and emerging technologies including Generative AI (Gen AI) and digital assets \n Sustained strength in financial performance 1 \n •  Statutory profit before tax of £6.7 billion (2024: £6.0 billion) benefitting from higher total income, partially offset by higher operating expenses and a higher impairment charge. Return on tangible equity of 12.9%, or 14.8% excluding a charge for motor finance commission arrangements in the third quarter. Fourth quarter return on tangible equity of 15.7% \n •  Underlying net interest income of £13.6 billion, up 6% compared to 2024. This reflects a banking net interest margin of 3.06%, up 11 basis points year-on-year (up 4 basis points in the fourth quarter to 3.10%), alongside higher average interest-earning banking assets of £462.9 billion \n •  Underlying other income of £6.1 billion, 9% higher than 2024 (2% higher in the fourth quarter versus the third), driven by strengthening customer activity and the benefit of strategic initiatives \n •  Operating lease depreciation of £1,454 million, up 10%, due to fleet growth, the depreciation of higher value vehicles and declines in used electric car prices, partially offset by risk mitigation actions \n •  Operating costs of £9.8 billion, up 3% versus the prior year, reflecting strategic investment (including increased severance expense), business growth costs and inflationary pressures, partially offset by cost savings from investment and continued business-as-usual cost discipline \n •  Remediation costs of £968 million, of which £800 million related to the potential impact of motor finance commission arrangements taken in the third quarter \n •  Underlying impairment charge of £795 million, reflecting strong and stable credit performance and an asset quality ratio of 17 basis points \n Growth in the customer franchise \n •  Underlying loans and advances to customers of £481.1 billion increased by £22.0 billion (5%) in the year, with growth across Retail of £18.8 billion and Commercial Banking of £2.7 billion. Balances increased by £4.0 billion in the fourth quarter, significantly driven by an increase in UK mortgages, Retail unsecured products and the European retail business \n •  Customer deposits of £496.5 billion increased by £13.8 billion (3%) in the year, with £5.5 billion growth in Retail and £8.5 billion in Commercial Banking. Customer deposits reduced by £0.2 billion in the fourth quarter, with £1.0 billion growth in Retail current accounts, more than offset by a reduction in Commercial Banking balances \n RESULTS FOR THE FULL YEAR (continued) \n Strong capital generation driving increased capital returns \n •  Strong capital generation of 147 basis points, or 178 basis points excluding the third quarter charge for motor finance. Pro forma CET1 ratio of 13.2% after increased ordinary dividend and announced share buyback \n •  Risk-weighted assets of £235.5 billion, up £10.9 billion in 2025, reflecting lending growth and Retail secured CRD IV increases, partially offset by ongoing optimisation activity \n •  Tangible net assets per share of 57.0 pence, up 4.6 pence in 2025, benefitting from attributable profit, the unwind of the cash flow hedge reserve and a reduction in the number of shares following the share buyback programme. This was partially offset by capital distributions, a lower pension surplus and higher intangible assets \n •  The Board has recommended a final ordinary dividend of 2.43 pence per share, resulting in a total ordinary dividend for 2025 of 3.65 pence per share, up 15% on the prior year and in line with the Group's progressive and sustainable ordinary dividend policy \n •  Given the Group's strong capital position, the Board has also announced its intention to implement an ordinary share buyback programme of up to £1.75 billion. Going forward, the Group will now review excess capital distributions in addition to the ordinary dividend every half year \n •  Total capital returns in respect of 2025 of up to £3.9 billion \n 2026 guidance \n Based on our sustained strength in financial performance and our current macroeconomic assumptions, for 2026 the Group expects: \n •  Underlying net interest income of c.£14.9 billion \n •  Cost:income ratio of less than 50% (including operating costs of less than £9.9 billion) \n •  Asset quality ratio of c.25 basis points \n •  Return on tangible equity now of greater than 16% \n •  Capital generation of greater than 200 basis points 2 \n •  To pay down to a CET1 ratio of c.13.0% \n 1     See the basis of presentation on page 61 . \n 2     Excludes capital distributions. \n   \n \n \n \n INCOME STATEMENT (UNDERLYING BASIS) A AND KEY BALANCE SHEET METRICS \n \n \n \n \n   \n \n \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n 2024 \n £m \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying net interest income \n \n \n 13,635 \n \n \n   \n \n \n   \n \n \n 12,845 \n \n \n   \n \n \n   \n \n \n 6 \n \n \n \n \n Underlying other income \n \n \n 6,120 \n \n \n   \n \n \n   \n \n \n 5,597 \n \n \n   \n \n \n   \n \n \n 9 \n \n \n \n \n Operating lease depreciation \n \n \n (1,454) \n \n \n   \n \n \n   \n \n \n (1,325) \n \n \n   \n \n \n   \n \n \n (10) \n \n \n \n \n Net income \n \n \n 18,301 \n \n \n   \n \n \n   \n \n \n 17,117 \n \n \n   \n \n \n   \n \n \n 7 \n \n \n \n \n Operating costs \n \n \n (9,761) \n \n \n   \n \n \n   \n \n \n (9,442) \n \n \n   \n \n \n   \n \n \n (3) \n \n \n \n \n Remediation \n \n \n (968) \n \n \n   \n \n \n   \n \n \n (899) \n \n \n   \n \n \n   \n \n \n (8) \n \n \n \n \n Total costs \n \n \n (10,729) \n \n \n   \n \n \n   \n \n \n (10,341) \n \n \n   \n \n \n   \n \n \n (4) \n \n \n \n \n Underlying profit before impairment \n \n \n 7,572 \n \n \n   \n \n \n   \n \n \n 6,776 \n \n \n   \n \n \n   \n \n \n 12 \n \n \n \n \n Underlying impairment charge \n \n \n (795) \n \n \n   \n \n \n   \n \n \n (433) \n \n \n   \n \n \n   \n \n \n (84) \n \n \n \n \n Underlying profit \n \n \n 6,777 \n \n \n   \n \n \n   \n \n \n 6,343 \n \n \n   \n \n \n   \n \n \n 7 \n \n \n \n \n Restructuring \n \n \n (46) \n \n \n   \n \n \n   \n \n \n (40) \n \n \n   \n \n \n   \n \n \n (15) \n \n \n \n \n Volatility and other items \n \n \n (70) \n \n \n   \n \n \n   \n \n \n (332) \n \n \n   \n \n \n   \n \n \n 79 \n \n \n \n \n Statutory profit before tax \n \n \n 6,661 \n \n \n   \n \n \n   \n \n \n 5,971 \n \n \n   \n \n \n   \n \n \n 12 \n \n \n \n \n Tax expense \n \n \n (1,904) \n \n \n   \n \n \n   \n \n \n (1,494) \n \n \n   \n \n \n   \n \n \n (27) \n \n \n \n \n Statutory profit after tax \n \n \n 4,757 \n \n \n   \n \n \n   \n \n \n 4,477 \n \n \n   \n \n \n   \n \n \n 6 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Earnings per share \n \n \n 7.0p \n \n \n   \n \n \n   \n \n \n 6.3p \n \n \n   \n \n \n   \n \n \n 0.7p \n \n \n \n \n Dividends per share - ordinary \n \n \n 3.65p \n \n \n   \n \n \n   \n \n \n 3.17p \n \n \n   \n \n \n   \n \n \n 15 \n \n \n \n \n Share buyback value \n \n \n £1.75bn \n \n \n   \n \n \n   \n \n \n £1.70bn \n \n \n   \n \n \n   \n \n \n 3 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Banking net interest margin A \n \n \n 3.06% \n \n \n   \n \n \n   \n \n \n 2.95% \n \n \n   \n \n \n   \n \n \n 11bp \n \n \n \n \n Average interest-earning banking assets A \n \n \n £462.9bn \n \n \n   \n \n \n   \n \n \n £451.2bn \n \n \n   \n \n \n   \n \n \n 3 \n \n \n \n \n Cost:income ratio A \n \n \n 58.6% \n \n \n   \n \n \n   \n \n \n 60.4% \n \n \n   \n \n \n   \n \n \n (1.8)pp \n \n \n \n \n Asset quality ratio A \n \n \n 0.17% \n \n \n   \n \n \n   \n \n \n 0.10% \n \n \n   \n \n \n   \n \n \n 7bp \n \n \n \n \n Return on tangible equity A \n \n \n 12.9% \n \n \n   \n \n \n   \n \n \n 12.3% \n \n \n   \n \n \n   \n \n \n 0.6pp \n \n \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n At 31 Dec 2025 \n \n \n   \n \n \n   \n \n \n At 31 Dec 2024 \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying loans and advances to customers A \n \n \n £481.1bn \n \n \n   \n \n \n   \n \n \n £459.1bn \n \n \n   \n \n \n   \n \n \n 5 \n \n \n \n \n Customer deposits \n \n \n £496.5bn \n \n \n   \n \n \n   \n \n \n £482.7bn \n \n \n   \n \n \n   \n \n \n 3 \n \n \n \n \n Loan to deposit ratio A \n \n \n 97% \n \n \n   \n \n \n   \n \n \n 95% \n \n \n   \n \n \n   \n \n \n 2pp \n \n \n \n \n CET1 ratio \n \n \n 14.0% \n \n \n   \n \n \n   \n \n \n 14.2% \n \n \n   \n \n \n   \n \n \n (0.2)pp \n \n \n \n \n Pro forma CET1 ratio A,1 \n \n \n 13.2% \n \n \n   \n \n \n   \n \n \n 13.5% \n \n \n   \n \n \n   \n \n \n (0.3)pp \n \n \n \n \n UK leverage ratio \n \n \n 5.4% \n \n \n   \n \n \n   \n \n \n 5.5% \n \n \n   \n \n \n   \n \n \n (0.1)pp \n \n \n \n \n Risk-weighted assets \n \n \n £235.5bn \n \n \n   \n \n \n   \n \n \n £224.6bn \n \n \n   \n \n \n   \n \n \n 5 \n \n \n \n \n Wholesale funding 2 \n \n \n £99.4bn \n \n \n   \n \n \n   \n \n \n £92.5bn \n \n \n   \n \n \n   \n \n \n 7 \n \n \n \n \n Liquidity coverage ratio 3 \n \n \n 145% \n \n \n   \n \n \n   \n \n \n 146% \n \n \n   \n \n \n   \n \n \n (1)pp \n \n \n \n \n Net stable funding ratio 4 \n \n \n 124% \n \n \n   \n \n \n   \n \n \n 129% \n \n \n   \n \n \n   \n \n \n (5)pp \n \n \n \n \n Tangible net assets per share A \n \n \n 57.0p \n \n \n   \n \n \n   \n \n \n 52.4p \n \n \n   \n \n \n   \n \n \n 4.6p \n \n \n \n \n A    See page 62 . \n 1    31 December 2025 and 31 December 2024 pro forma CET1 ratios reflect the full impact of the share buybacks announced in respect of 2025 and 2024. 31 December 2024 pro forma CET1 ratio also reflects the ordinary dividend received from the Insurance business in February 2025. The CET1 and pro forma CET1 ratios at 31 December 2025 both reflect an ordinary dividend received from the Insurance business in December 2025, that would previously have been received in February of the following year. \n 2     Excludes balances relating to cash collateral of £1.5 billion (31 December 2024: £2.8 billion). \n 3     The liquidity coverage ratio is calculated as a simple average of month-end observations over the previous 12 months. \n 4     The net stable funding ratio is calculated as a simple average of month-end observations over the previous four quarter-ends. \n \n \n \n QUARTERLY INFORMATION A \n \n \n \n \n   \n \n \n Quarter \n ended \n 31 Dec \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n Quarter \n ended \n 30 Sep \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n   \n \n \n Quarter \n ended \n 30 Jun \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n Quarter \n ended \n 31 Mar \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n Quarter \n ended \n 31 Dec \n 2024 \n £m \n \n \n   \n \n \n   \n \n \n Quarter \n ended \n 30 Sep \n 2024 \n £m \n \n \n   \n \n \n   \n \n \n Quarter \n ended \n 30 Jun \n 2024 \n £m \n \n \n   \n \n \n   \n \n \n Quarter \n ended \n 31 Mar \n 2024 \n £m \n \n \n   \n \n \n \n \n Underlying net interest income \n \n \n 3,529 \n \n \n   \n \n \n   \n \n \n 3,451 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n   \n \n \n 3,361 \n \n \n   \n \n \n   \n \n \n 3,294 \n \n \n   \n \n \n   \n \n \n 3,276 \n \n \n   \n \n \n   \n \n \n 3,231 \n \n \n   \n \n \n   \n \n \n 3,154 \n \n \n   \n \n \n   \n \n \n 3,184 \n \n \n   \n \n \n \n \n Underlying other income \n \n \n 1,594 \n \n \n   \n \n \n   \n \n \n 1,557 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n   \n \n \n 1,517 \n \n \n   \n \n \n   \n \n \n 1,452 \n \n \n   \n \n \n   \n \n \n 1,433 \n \n \n   \n \n \n   \n \n \n 1,430 \n \n \n   \n \n \n   \n \n \n 1,394 \n \n \n   \n \n \n   \n \n \n 1,340 \n \n \n   \n \n \n \n \n Operating lease depreciation \n \n \n (379) \n \n \n   \n \n \n   \n \n \n (365) \n \n \n   \n \n \n   \n \n \n (4) \n \n \n   \n \n \n (355) \n \n \n   \n \n \n   \n \n \n (355) \n \n \n   \n \n \n   \n \n \n (331) \n \n \n   \n \n \n   \n \n \n (315) \n \n \n   \n \n \n   \n \n \n (396) \n \n \n   \n \n \n   \n \n \n (283) \n \n \n   \n \n \n \n \n Net income \n \n \n 4,744 \n \n \n   \n \n \n   \n \n \n 4,643 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n   \n \n \n 4,523 \n \n \n   \n \n \n   \n \n \n 4,391 \n \n \n   \n \n \n   \n \n \n 4,378 \n \n \n   \n \n \n   \n \n \n 4,346 \n \n \n   \n \n \n   \n \n \n 4,152 \n \n \n   \n \n \n   \n \n \n 4,241 \n \n \n   \n \n \n \n \n Operating costs \n \n \n (2,585) \n \n \n   \n \n \n   \n \n \n (2,302) \n \n \n   \n \n \n   \n \n \n (12) \n \n \n   \n \n \n (2,324) \n \n \n   \n \n \n   \n \n \n (2,550) \n \n \n   \n \n \n   \n \n \n (2,450) \n \n \n   \n \n \n   \n \n \n (2,292) \n \n \n   \n \n \n   \n \n \n (2,298) \n \n \n   \n \n \n   \n \n \n (2,402) \n \n \n   \n \n \n \n \n Remediation \n \n \n (56) \n \n \n   \n \n \n   \n \n \n (875) \n \n \n   \n \n \n   \n \n \n 94 \n \n \n   \n \n \n (37) \n \n \n   \n \n \n   \n \n \n - \n \n \n   \n \n \n   \n \n \n (775) \n \n \n   \n \n \n   \n \n \n (29) \n \n \n   \n \n \n   \n \n \n (70) \n \n \n   \n \n \n   \n \n \n (25) \n \n \n   \n \n \n \n \n Total costs \n \n \n (2,641) \n \n \n   \n \n \n   \n \n \n (3,177) \n \n \n   \n \n \n   \n \n \n 17 \n \n \n   \n \n \n (2,361) \n \n \n   \n \n \n   \n \n \n (2,550) \n \n \n   \n \n \n   \n \n \n (3,225) \n \n \n   \n \n \n   \n \n \n (2,321) \n \n \n   \n \n \n   \n \n \n (2,368) \n \n \n   \n \n \n   \n \n \n (2,427) \n \n \n   \n \n \n \n \n Underlying profit before impairment \n \n \n 2,103 \n \n \n   \n \n \n   \n \n \n 1,466 \n \n \n   \n \n \n   \n \n \n 43 \n \n \n   \n \n \n 2,162 \n \n \n   \n \n \n   \n \n \n 1,841 \n \n \n   \n \n \n   \n \n \n 1,153 \n \n \n   \n \n \n   \n \n \n 2,025 \n \n \n   \n \n \n   \n \n \n 1,784 \n \n \n   \n \n \n   \n \n \n 1,814 \n \n \n   \n \n \n \n \n Underlying impairment charge \n \n \n (177) \n \n \n   \n \n \n   \n \n \n (176) \n \n \n   \n \n \n   \n \n \n (1) \n \n \n   \n \n \n (133) \n \n \n   \n \n \n   \n \n \n (309) \n \n \n   \n \n \n   \n \n \n (160) \n \n \n   \n \n \n   \n \n \n (172) \n \n \n   \n \n \n   \n \n \n (44) \n \n \n   \n \n \n   \n \n \n (57) \n \n \n   \n \n \n \n \n Underlying profit \n \n \n 1,926 \n \n \n   \n \n \n   \n \n \n 1,290 \n \n \n   \n \n \n   \n \n \n 49 \n \n \n   \n \n \n 2,029 \n \n \n   \n \n \n   \n \n \n 1,532 \n \n \n   \n \n \n   \n \n \n 993 \n \n \n   \n \n \n   \n \n \n 1,853 \n \n \n   \n \n \n   \n \n \n 1,740 \n \n \n   \n \n \n   \n \n \n 1,757 \n \n \n   \n \n \n \n \n Restructuring \n \n \n (30) \n \n \n   \n \n \n   \n \n \n (7) \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n (5) \n \n \n   \n \n \n   \n \n \n (4) \n \n \n   \n \n \n   \n \n \n (19) \n \n \n   \n \n \n   \n \n \n (6) \n \n \n   \n \n \n   \n \n \n (3) \n \n \n   \n \n \n   \n \n \n (12) \n \n \n   \n \n \n \n \n Volatility and other items \n \n \n 87 \n \n \n   \n \n \n   \n \n \n (109) \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n (37) \n \n \n   \n \n \n   \n \n \n (11) \n \n \n   \n \n \n   \n \n \n (150) \n \n \n   \n \n \n   \n \n \n (24) \n \n \n   \n \n \n   \n \n \n (41) \n \n \n   \n \n \n   \n \n \n (117) \n \n \n   \n \n \n \n \n Statutory profit before tax \n \n \n 1,983 \n \n \n   \n \n \n   \n \n \n 1,174 \n \n \n   \n \n \n   \n \n \n 69 \n \n \n   \n \n \n 1,987 \n \n \n   \n \n \n   \n \n \n 1,517 \n \n \n   \n \n \n   \n \n \n 824 \n \n \n   \n \n \n   \n \n \n 1,823 \n \n \n   \n \n \n   \n \n \n 1,696 \n \n \n   \n \n \n   \n \n \n 1,628 \n \n \n   \n \n \n \n \n Tax expense \n \n \n (548) \n \n \n   \n \n \n   \n \n \n (396) \n \n \n   \n \n \n   \n \n \n (38) \n \n \n   \n \n \n (577) \n \n \n   \n \n \n   \n \n \n (383) \n \n \n   \n \n \n   \n \n \n (124) \n \n \n   \n \n \n   \n \n \n (490) \n \n \n   \n \n \n   \n \n \n (467) \n \n \n   \n \n \n   \n \n \n (413) \n \n \n   \n \n \n \n \n Statutory profit after tax \n \n \n 1,435 \n \n \n   \n \n \n   \n \n \n 778 \n \n \n   \n \n \n   \n \n \n 84 \n \n \n   \n \n \n 1,410 \n \n \n   \n \n \n   \n \n \n 1,134 \n \n \n   \n \n \n   \n \n \n 700 \n \n \n   \n \n \n   \n \n \n 1,333 \n \n \n   \n \n \n   \n \n \n 1,229 \n \n \n   \n \n \n   \n \n \n 1,215 \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Earnings per share \n \n \n 2.2p \n \n \n   \n \n \n   \n \n \n 1.0p \n \n \n   \n \n \n   \n \n \n 1.2p \n \n \n   \n \n \n 2.1p \n \n \n   \n \n \n   \n \n \n 1.7p \n \n \n   \n \n \n   \n \n \n 1.0p \n \n \n   \n \n \n   \n \n \n 1.9p \n \n \n   \n \n \n   \n \n \n 1.7p \n \n \n   \n \n \n   \n \n \n 1.7p \n \n \n   \n \n \n \n \n Banking net interest margin A \n \n \n 3.10% \n \n \n   \n \n \n   \n \n \n 3.06% \n \n \n   \n \n \n   \n \n \n 4bp \n \n \n   \n \n \n 3.04% \n \n \n   \n \n \n   \n \n \n 3.03% \n \n \n   \n \n \n   \n \n \n 2.97% \n \n \n   \n \n \n   \n \n \n 2.95% \n \n \n   \n \n \n   \n \n \n 2.93% \n \n \n   \n \n \n   \n \n \n 2.95% \n \n \n   \n \n \n \n \n Average interest-earning banking assets A (£bn) \n \n \n 470.3 \n \n \n   \n \n \n   \n \n \n 465.5 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n   \n \n \n 460.0 \n \n \n   \n \n \n   \n \n \n 455.5 \n \n \n   \n \n \n   \n \n \n 455.1 \n \n \n   \n \n \n   \n \n \n 451.1 \n \n \n   \n \n \n   \n \n \n 449.4 \n \n \n   \n \n \n   \n \n \n 449.1 \n \n \n   \n \n \n \n \n Cost:income ratio A \n \n \n 55.7% \n \n \n   \n \n \n   \n \n \n 68.4% \n \n \n   \n \n \n   \n \n \n (12.7)pp \n \n \n   \n \n \n 52.2% \n \n \n   \n \n \n   \n \n \n 58.1% \n \n \n   \n \n \n   \n \n \n 73.7% \n \n \n   \n \n \n   \n \n \n 53.4% \n \n \n   \n \n \n   \n \n \n 57.0% \n \n \n   \n \n \n   \n \n \n 57.2% \n \n \n   \n \n \n \n \n Asset quality ratio A \n \n \n 0.14% \n \n \n   \n \n \n   \n \n \n 0.15% \n \n \n   \n \n \n   \n \n \n (1)bp \n \n \n   \n \n \n 0.11% \n \n \n   \n \n \n   \n \n \n 0.27% \n \n \n   \n \n \n   \n \n \n 0.14% \n \n \n   \n \n \n   \n \n \n 0.15% \n \n \n   \n \n \n   \n \n \n 0.05% \n \n \n   \n \n \n   \n \n \n 0.06% \n \n \n   \n \n \n \n \n Return on tangible equity A \n \n \n 15.7% \n \n \n   \n \n \n   \n \n \n 7.5% \n \n \n   \n \n \n   \n \n \n 8.2pp \n \n \n   \n \n \n 15.5% \n \n \n   \n \n \n   \n \n \n 12.6% \n \n \n   \n \n \n   \n \n \n 7.1% \n \n \n   \n \n \n   \n \n \n 15.2% \n \n \n   \n \n \n   \n \n \n 13.6% \n \n \n   \n \n \n   \n \n \n 13.3% \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n At \n 31 Dec \n 2025 \n \n \n   \n \n \n   \n \n \n At \n 30 Sep \n 2025 \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n   \n \n \n At \n 30 Jun \n 2025 \n \n \n   \n \n \n   \n \n \n At \n 31 Mar 2025 \n \n \n   \n \n \n   \n \n \n At \n 31 Dec \n 2024 \n \n \n   \n \n \n   \n \n \n At \n 30 Sep 2024 \n \n \n   \n \n \n   \n \n \n At \n 30 Jun 2024 \n \n \n   \n \n \n   \n \n \n At \n 31 Mar 2024 \n \n \n   \n \n \n \n \n Underlying loans and advances to customers A,1 (£bn) \n \n \n 481.1 \n \n \n   \n \n \n   \n \n \n 477.1 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n   \n \n \n 471.0 \n \n \n   \n \n \n   \n \n \n 466.2 \n \n \n   \n \n \n   \n \n \n 459.1 \n \n \n   \n \n \n   \n \n \n 457.0 \n \n \n   \n \n \n   \n \n \n 452.4 \n \n \n   \n \n \n   \n \n \n 448.5 \n \n \n   \n \n \n \n \n Customer deposits (£bn) \n \n \n 496.5 \n \n \n   \n \n \n   \n \n \n 496.7 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n 493.9 \n \n \n   \n \n \n   \n \n \n 487.7 \n \n \n   \n \n \n   \n \n \n 482.7 \n \n \n   \n \n \n   \n \n \n 475.7 \n \n \n   \n \n \n   \n \n \n 474.7 \n \n \n   \n \n \n   \n \n \n 469.2 \n \n \n   \n \n \n \n \n Loan to deposit ratio A \n \n \n 97% \n \n \n   \n \n \n   \n \n \n 96% \n \n \n   \n \n \n   \n \n \n 1.0pp \n \n \n   \n \n \n 95% \n \n \n   \n \n \n   \n \n \n 96% \n \n \n   \n \n \n   \n \n \n 95% \n \n \n   \n \n \n   \n \n \n 96% \n \n \n   \n \n \n   \n \n \n 95% \n \n \n   \n \n \n   \n \n \n 96% \n \n \n   \n \n \n \n \n CET1 ratio \n \n \n 14.0% \n \n \n   \n \n \n   \n \n \n 13.8% \n \n \n   \n \n \n   \n \n \n 0.2pp \n \n \n   \n \n \n 13.8% \n \n \n   \n \n \n   \n \n \n 13.5% \n \n \n   \n \n \n   \n \n \n 14.2% \n \n \n   \n \n \n   \n \n \n 14.3% \n \n \n   \n \n \n   \n \n \n 14.1% \n \n \n   \n \n \n   \n \n \n 13.9% \n \n \n   \n \n \n \n \n Pro forma CET1 ratio A,2 \n \n \n 13.2% \n \n \n   \n \n \n   \n \n \n 13.8% \n \n \n   \n \n \n   \n \n \n (0.6)pp \n \n \n   \n \n \n 13.8% \n \n \n   \n \n \n   \n \n \n 13.5% \n \n \n   \n \n \n   \n \n \n 13.5% \n \n \n   \n \n \n   \n \n \n 14.3% \n \n \n   \n \n \n   \n \n \n 14.1% \n \n \n   \n \n \n   \n \n \n 13.9% \n \n \n   \n \n \n \n \n UK leverage ratio \n \n \n 5.4% \n \n \n   \n \n \n   \n \n \n 5.2% \n \n \n   \n \n \n   \n \n \n 0.2pp \n \n \n   \n \n \n 5.4% \n \n \n   \n \n \n   \n \n \n 5.5% \n \n \n   \n \n \n   \n \n \n 5.5% \n \n \n   \n \n \n   \n \n \n 5.5% \n \n \n   \n \n \n   \n \n \n 5.4% \n \n \n   \n \n \n   \n \n \n 5.6% \n \n \n   \n \n \n \n \n Risk-weighted assets (£bn) \n \n \n 235.5 \n \n \n   \n \n \n   \n \n \n 232.3 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n   \n \n \n 231.4 \n \n \n   \n \n \n   \n \n \n 230.1 \n \n \n   \n \n \n   \n \n \n 224.6 \n \n \n   \n \n \n   \n \n \n 223.3 \n \n \n   \n \n \n   \n \n \n 222.0 \n \n \n   \n \n \n   \n \n \n 222.8 \n \n \n   \n \n \n \n \n Wholesale funding (£bn) \n \n \n 99.4 \n \n \n   \n \n \n   \n \n \n 103.5 \n \n \n   \n \n \n   \n \n \n (4) \n \n \n   \n \n \n 92.2 \n \n \n   \n \n \n   \n \n \n 89.4 \n \n \n   \n \n \n   \n \n \n 92.5 \n \n \n   \n \n \n   \n \n \n 93.3 \n \n \n   \n \n \n   \n \n \n 97.6 \n \n \n   \n \n \n   \n \n \n 99.9 \n \n \n   \n \n \n \n \n Liquidity coverage ratio 3 \n \n \n 145% \n \n \n   \n \n \n   \n \n \n 145% \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n 145% \n \n \n   \n \n \n   \n \n \n 145% \n \n \n   \n \n \n   \n \n \n 146% \n \n \n   \n \n \n   \n \n \n 144% \n \n \n   \n \n \n   \n \n \n 144% \n \n \n   \n \n \n   \n \n \n 143% \n \n \n   \n \n \n \n \n Net stable funding ratio 4 \n \n \n 124% \n \n \n   \n \n \n   \n \n \n 126% \n \n \n   \n \n \n   \n \n \n (2)pp \n \n \n   \n \n \n 127% \n \n \n   \n \n \n   \n \n \n 128% \n \n \n   \n \n \n   \n \n \n 129% \n \n \n   \n \n \n   \n \n \n 129% \n \n \n   \n \n \n   \n \n \n 130% \n \n \n   \n \n \n   \n \n \n 130% \n \n \n   \n \n \n \n \n Tangible net assets per share A \n \n \n 57.0p \n \n \n   \n \n \n   \n \n \n 55.0p \n \n \n   \n \n \n   \n \n \n 2.0p \n \n \n   \n \n \n 54.5p \n \n \n   \n \n \n   \n \n \n 54.4p \n \n \n   \n \n \n   \n \n \n 52.4p \n \n \n   \n \n \n   \n \n \n 52.5p \n \n \n   \n \n \n   \n \n \n 49.6p \n \n \n   \n \n \n   \n \n \n 51.2p \n \n \n   \n \n \n \n \n 1     The increases between 31 March 2024 and 30 June 2024 and between 30 September 2024 and 31 December 2024 are net of the impact of the securitisations of primarily legacy Retail mortgages, of £0.9 billion and £1.0 billion respectively. \n 2    31 December 2025 and 31 December 2024 pro forma CET1 ratios reflect the full impact of the share buybacks announced in respect of 2025 and 2024. 31 December 2024 and 30 June 2025 ratios also reflect the ordinary dividends received from the Insurance business in February 2025 and July 2025 respectively. The CET1 and pro forma CET1 ratios at 31 December 2025 both reflect an ordinary dividend received from the Insurance business in December 2025, that would previously have been received in February of the following year. \n 3     The liquidity coverage ratio is calculated as a simple average of month-end observations over the previous 12 months. \n 4     The net stable funding ratio is calculated as a simple average of month-end observations over the previous four quarter-ends. \n \n \n \n BALANCE SHEET ANALYSIS \n \n \n \n \n   \n \n \n At 31 Dec \n 2025 \n £bn \n \n \n   \n \n \n   \n \n \n At 30 Sep 2025 \n £bn \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n At 30 Jun \n 2025 \n £bn \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n   \n \n \n At 31 Dec 2024 \n £bn \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n UK mortgages \n \n \n 323.1 \n \n \n   \n \n \n   \n \n \n 321.0 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n 317.9 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n   \n \n \n 312.3 \n \n \n   \n \n \n   \n \n \n 3 \n \n \n \n \n Credit cards \n \n \n 17.3 \n \n \n   \n \n \n   \n \n \n 16.8 \n \n \n   \n \n \n   \n \n \n 3 \n \n \n 16.4 \n \n \n   \n \n \n   \n \n \n 5 \n \n \n   \n \n \n 15.7 \n \n \n   \n \n \n   \n \n \n 10 \n \n \n \n \n UK Retail unsecured loans \n \n \n 10.5 \n \n \n   \n \n \n   \n \n \n 10.3 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n 9.9 \n \n \n   \n \n \n   \n \n \n 6 \n \n \n   \n \n \n 9.1 \n \n \n   \n \n \n   \n \n \n 15 \n \n \n \n \n UK Motor Finance 1 \n \n \n 16.4 \n \n \n   \n \n \n   \n \n \n 16.1 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n 16.0 \n \n \n   \n \n \n   \n \n \n 3 \n \n \n   \n \n \n 15.3 \n \n \n   \n \n \n   \n \n \n 7 \n \n \n \n \n Overdrafts \n \n \n 1.3 \n \n \n   \n \n \n   \n \n \n 1.2 \n \n \n   \n \n \n   \n \n \n 8 \n \n \n 1.2 \n \n \n   \n \n \n   \n \n \n 8 \n \n \n   \n \n \n 1.2 \n \n \n   \n \n \n   \n \n \n 8 \n \n \n \n \n Retail Europe 2 \n \n \n 20.4 \n \n \n   \n \n \n   \n \n \n 19.9 \n \n \n   \n \n \n   \n \n \n 3 \n \n \n 19.0 \n \n \n   \n \n \n   \n \n \n 7 \n \n \n   \n \n \n 16.8 \n \n \n   \n \n \n   \n \n \n 21 \n \n \n \n \n Retail other 2 \n \n \n 1.3 \n \n \n   \n \n \n   \n \n \n 1.4 \n \n \n   \n \n \n   \n \n \n (7) \n \n \n 1.2 \n \n \n   \n \n \n   \n \n \n 8 \n \n \n   \n \n \n 1.1 \n \n \n   \n \n \n   \n \n \n 18 \n \n \n \n \n Business and Commercial Banking \n \n \n 28.3 \n \n \n   \n \n \n   \n \n \n 28.8 \n \n \n   \n \n \n   \n \n \n (2) \n \n \n 29.1 \n \n \n   \n \n \n   \n \n \n (3) \n \n \n   \n \n \n 29.7 \n \n \n   \n \n \n   \n \n \n (5) \n \n \n \n \n Corporate and Institutional Banking \n \n \n 62.0 \n \n \n   \n \n \n   \n \n \n 61.3 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n 59.7 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n   \n \n \n 57.9 \n \n \n   \n \n \n   \n \n \n 7 \n \n \n \n \n Central Items 3 \n \n \n 0.5 \n \n \n   \n \n \n   \n \n \n 0.3 \n \n \n   \n \n \n   \n \n \n 67 \n \n \n 0.6 \n \n \n   \n \n \n   \n \n \n 17 \n \n \n   \n \n \n - \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying loans and advances to customers A \n \n \n 481.1 \n \n \n   \n \n \n   \n \n \n 477.1 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n 471.0 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n   \n \n \n 459.1 \n \n \n   \n \n \n   \n \n \n 5 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Retail current accounts \n \n \n 102.8 \n \n \n   \n \n \n   \n \n \n 101.8 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n 100.6 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n   \n \n \n 101.3 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n \n \n Retail savings accounts \n \n \n 212.5 \n \n \n   \n \n \n   \n \n \n 212.4 \n \n \n   \n \n \n   \n \n \n   \n \n \n 213.1 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n 208.2 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n \n \n Wealth \n \n \n 9.9 \n \n \n   \n \n \n   \n \n \n 9.5 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n 9.7 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n   \n \n \n 10.2 \n \n \n   \n \n \n   \n \n \n (3) \n \n \n \n \n Commercial Banking \n \n \n 171.1 \n \n \n   \n \n \n   \n \n \n 172.6 \n \n \n   \n \n \n   \n \n \n (1) \n \n \n 170.2 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n   \n \n \n 162.6 \n \n \n   \n \n \n   \n \n \n 5 \n \n \n \n \n Central Items \n \n \n 0.2 \n \n \n   \n \n \n   \n \n \n 0.4 \n \n \n   \n \n \n   \n \n \n (50) \n \n \n 0.3 \n \n \n   \n \n \n   \n \n \n (33) \n \n \n   \n \n \n 0.4 \n \n \n   \n \n \n   \n \n \n (50) \n \n \n \n \n Customer deposits \n \n \n 496.5 \n \n \n   \n \n \n   \n \n \n 496.7 \n \n \n   \n \n \n   \n \n \n   \n \n \n 493.9 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n   \n \n \n 482.7 \n \n \n   \n \n \n   \n \n \n 3 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Total assets \n \n \n 944.1 \n \n \n   \n \n \n   \n \n \n 937.5 \n \n \n   \n \n \n   \n \n \n   \n \n \n 919.3 \n \n \n   \n \n \n   \n \n \n 3 \n \n \n   \n \n \n 906.7 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n \n \n Total liabilities \n \n \n 896.2 \n \n \n   \n \n \n   \n \n \n 891.8 \n \n \n   \n \n \n   \n \n \n   \n \n \n 872.4 \n \n \n   \n \n \n   \n \n \n 3 \n \n \n   \n \n \n 860.8 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Ordinary shareholders' equity \n \n \n 41.8 \n \n \n   \n \n \n   \n \n \n 40.2 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n 40.4 \n \n \n   \n \n \n   \n \n \n 3 \n \n \n   \n \n \n 39.5 \n \n \n   \n \n \n   \n \n \n 6 \n \n \n \n \n Other equity instruments \n \n \n 5.9 \n \n \n   \n \n \n   \n \n \n 5.2 \n \n \n   \n \n \n   \n \n \n 13 \n \n \n 6.3 \n \n \n   \n \n \n   \n \n \n (6) \n \n \n   \n \n \n 6.2 \n \n \n   \n \n \n   \n \n \n (5) \n \n \n \n \n Non-controlling interests \n \n \n 0.2 \n \n \n   \n \n \n   \n \n \n 0.2 \n \n \n   \n \n \n   \n \n \n   \n \n \n 0.2 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n 0.2 \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Total equity \n \n \n 47.9 \n \n \n   \n \n \n   \n \n \n 45.6 \n \n \n   \n \n \n   \n \n \n 5 \n \n \n 46.9 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n   \n \n \n 45.9 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Ordinary shares in issue, excluding own shares \n \n \n 58,799m \n \n \n   \n \n \n   \n \n \n 59,196m \n \n \n   \n \n \n   \n \n \n (1) \n \n \n 59,938m \n \n \n   \n \n \n   \n \n \n (2) \n \n \n   \n \n \n 60,491m \n \n \n   \n \n \n   \n \n \n (3) \n \n \n \n \n 1     UK Motor Finance balances on an underlying basis A exclude a finance lease gross up. See page 62 . \n 2     Within underlying loans and advances, Retail Europe, previously presented within Retail other, is reported separately. The comparatives are represented on a consistent basis. Retail other primarily includes the Wealth business. \n 3     Central Items includes central fair value hedge accounting adjustments. \n \n \n \n GROUP RESULTS - STATUTORY BASIS \n The results below are prepared in accordance with the recognition and measurement principles of IFRS ®  Accounting Standards. The underlying basis results are shown on page 3 . \n \n \n \n \n \n \n \n Summary income statement \n \n \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n 2024 \n £m \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Net interest income \n \n \n 13,230 \n \n \n   \n \n \n   \n \n \n 12,277 \n \n \n   \n \n \n   \n \n \n 8 \n \n \n \n \n Other income 1 \n \n \n 6,192 \n \n \n   \n \n \n   \n \n \n 5,726 \n \n \n   \n \n \n   \n \n \n 8 \n \n \n \n \n Total income 1 \n \n \n 19,422 \n \n \n   \n \n \n   \n \n \n 18,003 \n \n \n   \n \n \n   \n \n \n 8 \n \n \n \n \n Operating expenses \n \n \n (11,966) \n \n \n   \n \n \n   \n \n \n (11,601) \n \n \n   \n \n \n   \n \n \n (3) \n \n \n \n \n Impairment \n \n \n (795) \n \n \n   \n \n \n   \n \n \n (431) \n \n \n   \n \n \n   \n \n \n (84) \n \n \n \n \n Profit before tax \n \n \n 6,661 \n \n \n   \n \n \n   \n \n \n 5,971 \n \n \n   \n \n \n   \n \n \n 12 \n \n \n \n \n Tax expense \n \n \n (1,904) \n \n \n   \n \n \n   \n \n \n (1,494) \n \n \n   \n \n \n   \n \n \n (27) \n \n \n \n \n Profit after tax \n \n \n 4,757 \n \n \n   \n \n \n   \n \n \n 4,477 \n \n \n   \n \n \n   \n \n \n 6 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Profit attributable to ordinary shareholders \n \n \n 4,196 \n \n \n   \n \n \n   \n \n \n 3,923 \n \n \n   \n \n \n   \n \n \n 7 \n \n \n \n \n Profit attributable to other equity holders \n \n \n 463 \n \n \n   \n \n \n   \n \n \n 498 \n \n \n   \n \n \n   \n \n \n (7) \n \n \n \n \n Profit attributable to non-controlling interests \n \n \n 98 \n \n \n   \n \n \n   \n \n \n 56 \n \n \n   \n \n \n   \n \n \n 75 \n \n \n \n \n Profit after tax \n \n \n 4,757 \n \n \n   \n \n \n   \n \n \n 4,477 \n \n \n   \n \n \n   \n \n \n 6 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Ordinary shares in issue (weighted-average - basic) \n \n \n 59,790m \n \n \n   \n \n \n   \n \n \n 62,413m \n \n \n   \n \n \n   \n \n \n (4) \n \n \n \n \n Basic earnings per share \n \n \n 7.0p \n \n \n   \n \n \n   \n \n \n 6.3p \n \n \n   \n \n \n   \n \n \n 0.7p \n \n \n \n \n 1     Net finance expense in respect of insurance and investment contracts, previously shown separately, is now included within other income as part of total income. The comparative period is represented on a consistent basis. \n \n \n \n \n \n \n \n Summary balance sheet \n \n \n At 31 Dec \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n At 31 Dec 2024 \n £m \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n Assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cash and balances at central banks \n \n \n 56,661 \n \n \n   \n \n \n   \n \n \n 62,705 \n \n \n   \n \n \n   \n \n \n (10) \n \n \n \n \n Financial assets at fair value through profit or loss \n \n \n 240,413 \n \n \n   \n \n \n   \n \n \n 215,925 \n \n \n   \n \n \n   \n \n \n 11 \n \n \n \n \n Derivative financial instruments \n \n \n 19,727 \n \n \n   \n \n \n   \n \n \n 24,065 \n \n \n   \n \n \n   \n \n \n (18) \n \n \n \n \n Financial assets at amortised cost \n \n \n 553,672 \n \n \n   \n \n \n   \n \n \n 531,777 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n \n \n Financial assets at fair value through other comprehensive income \n \n \n 36,320 \n \n \n   \n \n \n   \n \n \n 30,690 \n \n \n   \n \n \n   \n \n \n 18 \n \n \n \n \n Other assets \n \n \n 37,279 \n \n \n   \n \n \n   \n \n \n 41,535 \n \n \n   \n \n \n   \n \n \n (10) \n \n \n \n \n Total assets \n \n \n 944,072 \n \n \n   \n \n \n   \n \n \n 906,697 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n \n \n Liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Deposits from banks \n \n \n 5,779 \n \n \n   \n \n \n   \n \n \n 6,158 \n \n \n   \n \n \n   \n \n \n (6) \n \n \n \n \n Customer deposits \n \n \n 496,457 \n \n \n   \n \n \n   \n \n \n 482,745 \n \n \n   \n \n \n   \n \n \n 3 \n \n \n \n \n Repurchase agreements at amortised cost \n \n \n 38,570 \n \n \n   \n \n \n   \n \n \n 37,760 \n \n \n   \n \n \n   \n \n \n 2 \n \n \n \n \n Financial liabilities at fair value through profit or loss \n \n \n 27,909 \n \n \n   \n \n \n   \n \n \n 27,611 \n \n \n   \n \n \n   \n \n \n 1 \n \n \n \n \n Derivative financial instruments \n \n \n 16,132 \n \n \n   \n \n \n   \n \n \n 21,676 \n \n \n   \n \n \n   \n \n \n (26) \n \n \n \n \n Debt securities in issue at amortised cost \n \n \n 78,271 \n \n \n   \n \n \n   \n \n \n 70,834 \n \n \n   \n \n \n   \n \n \n 10 \n \n \n \n \n Liabilities arising from insurance and participating investment contracts \n \n \n 135,284 \n \n \n   \n \n \n   \n \n \n 122,064 \n \n \n   \n \n \n   \n \n \n 11 \n \n \n \n \n Liabilities arising from non-participating investment contracts \n \n \n 61,640 \n \n \n   \n \n \n   \n \n \n 51,228 \n \n \n   \n \n \n   \n \n \n 20 \n \n \n \n \n Other liabilities \n \n \n 26,269 \n \n \n   \n \n \n   \n \n \n 30,644 \n \n \n   \n \n \n   \n \n \n (14) \n \n \n \n \n Subordinated liabilities \n \n \n 9,894 \n \n \n   \n \n \n   \n \n \n 10,089 \n \n \n   \n \n \n   \n \n \n (2) \n \n \n \n \n Total liabilities \n \n \n 896,205 \n \n \n   \n \n \n   \n \n \n 860,809 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n \n \n Total equity \n \n \n 47,867 \n \n \n   \n \n \n   \n \n \n 45,888 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n \n \n Total equity and liabilities \n \n \n 944,072 \n \n \n   \n \n \n   \n \n \n 906,697 \n \n \n   \n \n \n   \n \n \n 4 \n \n \n \n \n   \n \n \n \n GROUP CHIEF EXECUTIVE'S STATEMENT \n 2025 was a key year for the Group, entering the second phase of our strategy, investing for the benefit of our customers and wider stakeholders and guided by our purpose of Helping Britain Prosper. As we enter 2026, our transformation is accelerating, supported by strong business momentum as well as enhanced digital capabilities and innovative propositions that are driving growth and efficiency across the franchise. \n The Group demonstrated sustained strength in financial performance in 2025, with franchise, balance sheet and income growth. Strong business performance drove capital generation across the year of 147 basis points allowing total shareholder distributions of £3.9 billion, even after an additional £800 million charge for motor finance in the third quarter. \n Given our continued strategic execution and sustained strength in financial performance, we remain confident in meeting our 2026 commitments (including our upgraded target for return on tangible equity) and the Group's outlook beyond 2026. We look forward to setting out the next phase of the Group's strategy, beyond the current plan, in July. \n Sustained strength in financial performance \n Statutory profit before tax was £6.7 billion, up 12% year-on-year, with higher underlying profit of £6.8 billion, driven by 7% growth in net income, partially offset by higher operating costs and a higher underlying impairment charge. Net income of £18.3 billion benefitted from a higher banking net interest margin of 3.06% and continued broad-based growth in underlying other income of 9%. Operating costs of £9.8 billion increased by 3%, reflecting strategic investment (including an increased severance charge), business growth costs and inflationary pressures, partially offset by increasing cost savings from investment and business-as-usual cost discipline. The impairment charge remained low at £795 million, with strong and stable credit performance across our portfolios. Overall, this resulted in a return on tangible equity of 12.9%, or 14.8% excluding the motor finance charge. \n The Group's franchise and balance sheet grew during 2025. Underlying loans and advances to customers of £481.1 billion were up £22.0 billion (5%), reflecting growth across all Retail areas including UK mortgages and the European business, alongside growth in Corporate and Institutional Banking. Customer deposits of £496.5 billion increased by £13.8 billion (3%) across the year. This included growth in Retail of £5.5 billion, driven by strength in  current accounts and savings, and Commercial Banking of £8.5 billion, including growth in targeted sectors. \n The Group delivered strong capital generation of 147 basis points in 2025 (178 basis points excluding the motor finance charge), and has a pro forma CET1 ratio of 13.2%. Given the capital generation and strength of the CET1 position, the Board has recommended an increased final ordinary dividend of 2.43 pence per share, resulting in a total dividend for the year of 3.65 pence per share, up 15% on the prior year. In addition, the Group has announced its intention to implement an ordinary share buyback of up to £1.75 billion, as we continue to distribute excess capital to shareholders. Together this represents distributions of £3.9 billion in respect of 2025. Going forward, reflecting increasing confidence in our capital generation, the Group will now review excess capital distributions in addition to the ordinary dividend every half year. \n Guiding purpose of Helping Britain Prosper \n The fundamentals of the UK economy are constructive. Our purpose allows us to play a key role in promoting UK prosperity, aligning our strategy to support UK economic growth sectors. As part of this, we recently committed to providing a further £35 billion of new finance to companies investing and operating in the UK in 2026. Alongside, we remain focused on improving access to quality and affordable housing, lending £17 billion to first time buyers, as well as supporting £3.2 billion of new finance to the social housing sector in 2025. \n We continue to financially empower our customers. For example, our Ready-Made Pensions product is a simple, long-term financial planning solution benefitting customers including those who do not participate in auto-enrolment. Of the over 7,000 accounts opened since launch, c.40% are self-employed customers. \n Supporting the net zero transition remains a significant strategic and commercial opportunity. The Group has cumulatively delivered over £70 billion of sustainable financing since 2022, including over £21 billion in 2025. \n Second phase of purpose-driven strategy, continued strong momentum, on track for 2026 \n In 2025, we entered the second phase of our five year strategic plan, continuing to scale the core business, driving growth in high value areas, deepening customer relationships and strengthening cross-Group collaboration. Strong strategic momentum means we now expect to generate c.£2 billion of additional revenues from strategic initiatives by the end of 2026, exceeding our initial £1.5 billion target. \n   \n GROUP CHIEF EXECUTIVE'S STATEMENT (continued) \n In 2025 we continued to grow our Retail franchise through innovative new propositions and enhanced capabilities. We maintained our focus on high-value segments, building our Mass Affluent current account offering with the launch of our Lloyds Premier product. As the UK's largest digital bank, we continued to accelerate the shift to mobile-first. We now have c.21.5 million customers using our app, an increase of c.45% since 2021. Alongside, we recently announced the acquisition of Curve (subject to regulatory approval) which will reinforce our leading digital experiences, including enhanced digital wallet capabilities. \n In Insurance, Pensions and Investments (IP&I), we are reinforcing our competitive position in areas of strategic focus. We now have over 750,000 customers using our core app for workplace pension customers, helping to drive regular workplace pension contributions up 5% year-on-year. With the intention of capitalising on our position as the UK's only scale integrated financial services provider, we continue to embed IP&I products across banking journeys. The protection take-up rate for mortgage customers is now at 20% in 2025, up from 15% in 2024. Alongside, the recent full acquisition of Schroders Personal Wealth accelerates delivery of our Wealth strategy and will deepen relationships in a high value segment. \n In Commercial Banking, we are building a digitally-led relationship bank and driving income diversification through capital efficient growth. In Business and Commercial Banking, we have strengthened deposit and lending growth capabilities through enhanced digital propositions. This includes our new Gen AI powered application which simplifies the Commercial Real Estate lending journey by expediting the tenancy schedule process. In Corporate and Institutional Banking, we are delivering on our ambition to become a broader scale solution provider, meeting more of our customer needs. For example, in 2025 we launched a market-leading FX solution, supporting a c.21% increase in foreign exchange volumes year-on-year. \n Finally, within Equity Investments, alongside strong LDC performance in 2025, our Lloyds Living business continues to be a significant growth driver, with a portfolio of close to 8,000 homes, up from c.5,500 this time last year. \n As we deliver growth we are focused on improving operating leverage through cost and capital efficiency. Since 2021 we have delivered £1.9 billion of gross cost savings through both business-as-usual management as well as more transformational initiatives enabled by strategic investment. Alongside, we have driven £24 billion of risk-weighted asset optimisation, primarily through enhanced capabilities, data improvements and risk reduction transactions.  \n Leveraging our enablers to drive long-term competitive strength \n As highlighted in our recent Digital and AI seminar, our investment in technology, data and people underpins our ambitions to grow the business with innovation and improved operating leverage. Advances in our infrastructure and capabilities allow us to deliver on our strategic priorities, such as enabling a seven minute mobile current account opening process, in line with the sector best, driving c.85% of our current account openings in 2025. Digital investments have also supported simplification of our technology estate and helped improve productivity, with an increase of c.45% in active customers served per distribution FTE since 2021. Finally, we are extending our leadership across new and emerging technologies, including Gen AI and digital assets, and are well-placed to succeed in a period of potentially transformational change for the industry. Our c.50 major live Gen AI use cases delivered c.£50 million of value in 2025, as we built the foundations of our capabilities. We are now targeting over £100 million of incremental P&L benefit from Gen AI in 2026, as we start to scale the foundations. \n Together, these developments drive improved operating leverage, helping towards our target cost:income ratio of less than 50% in 2026. As we enter the final year of our current strategy, we remain confident in our 2026 ambitions to generate higher, more sustainable returns for our shareholders. Beyond 2026, we are committed to continuing income growth, improving operating leverage and stronger, sustainable returns. \n 2026 guidance \n Based on our sustained strength in financial performance and our current macroeconomic assumptions, for 2026 the Group expects: \n •  Underlying net interest income of c.£14.9 billion \n •  Cost:income ratio of less than 50% (including operating costs of less than £9.9 billion) \n •  Asset quality ratio of c.25 basis points \n •  Return on tangible equity now of greater than 16% \n •  Capital generation of greater than 200 basis points 1 \n •  To pay down to a CET1 ratio of c.13.0% \n 1     Excludes capital distributions. \n \n \n \n SUMMARY OF GROUP RESULTS A \n \n \n \n Statutory results \n Income statement \n The Group's statutory profit before tax for 2025 was £6,661 million, 12% higher than in 2024. This included higher total income, partially offset by higher operating expenses and a higher impairment charge. Profit after tax was £4,757 million and earnings per share were 7.0 pence (2024: £4,477 million and 6.3 pence respectively). \n Total income for 2025 was £19,422 million, an increase of 8% on the prior year (2024: £18,003 million). Net interest income of £13,230 million was up 8% (2024: £12,277 million), driven by higher average interest-earning assets and a higher margin, benefitting from franchise led volume growth and stronger structural hedge income as eligible balances were reinvested in a higher rate environment, partially offset by continued mortgage and deposit headwinds. \n Other income increased by 8% to £6,192 million (2024: £5,726 million), with higher other operating income and a higher insurance service result, partially offset by lower net trading income. Other operating income increased by 22% to £2,367 million (2024: £1,934 million) as a result of vehicle fleet growth and higher average vehicle rental values in UK Motor Finance within Retail. The insurance service result increased by 56% to £756 million (2024: £486 million), benefitting from higher income in the workplace pensions business, higher general insurance income net of claims and the full acquisition of Schroders Personal Wealth in the fourth quarter. This was alongside the gain on sale of the Group's bulk annuities portfolio to Rothesay Life plc in the first half of the year. Net trading income reduced to £1,485 million (2024: £1,812 million), largely due to market movements partially offset by strong income growth from Lloyds Living. \n Total operating expenses of £11,966 million (2024: £11,601 million) included a higher remediation charge relating to motor finance commission arrangements. Excluding remediation, the impact of strategic investment (including planned higher severance), business growth costs (including the full acquisition of Schroders Personal Wealth) and inflationary pressures were partially mitigated by cost savings from investment and continued business-as-usual cost discipline. Operating expenses include operating lease depreciation which increased due to fleet growth, the depreciation of higher value vehicles and declines in used electric car prices, partly mitigated through lease extensions, used car leasing and remarketing agreements. \n A remediation charge of £968 million was recognised by the Group in 2025 (2024: £899 million), including £800 million in relation to the potential impact of motor finance commission arrangements taken in the third quarter, bringing the total provision recognised for motor finance to £1,950 million. \n The 2025 impairment charge was £795 million, up from £431 million in 2024 which benefitted from a large credit from improvements in the Group's economic outlook. In Retail, the charge for 2025 reflected both strong performance alongside the benefits from calibrations and model refinements and a debt sale. In Commercial Banking, higher charges in the first half of the year driven by a small number of individual cases were more than offset by releases from Stage 1 and Stage 2 model calibrations capturing strong credit performance and reducing interest rates throughout the year. \n   \n SUMMARY OF GROUP RESULTS (continued) \n Statutory results (continued) \n Balance sheet \n As at 31 December 2025, total assets were £944 billion, £37 billion higher than the prior year (31 December 2024: £907 billion). Financial assets at amortised cost were £554 billion, £22 billion higher versus the prior year (31 December 2024: £532 billion), supported by increases in loans and advances to customers. This included growth of £10.8 billion in UK mortgages, alongside growth across UK Retail unsecured loans, credit cards, UK Motor Finance and the European retail business totalling £7.3 billion. Lending balances increased by £2.7 billion in Commercial Banking, with higher Institutional balances including securitised products, alongside corporate infrastructure growth, partially offset by repayments of government-backed lending. \n Financial assets held at fair value through profit or loss at £240 billion increased by £24 billion during the year, with increased holdings in the Insurance business as a result of market gains on investments held to back insurance and investment contract liabilities as well as increased reverse repurchase agreements in the banking business. \n Derivative financial assets were £4 billion lower at £20 billion versus the prior year (31 December 2024: £24 billion), driven by market movements in the year. Financial assets at fair value through other comprehensive income of £36 billion increased by £6 billion in the year reflecting increases in liquid asset holdings. Cash and balances at central banks reduced by £6 billion to £57 billion (31 December 2024: £63 billion) reflecting a change in the mix of liquidity holdings. Other assets were £4 billion lower, primarily reflecting the disposal of the Group's bulk annuity business in the second quarter, partially offset by increased operating lease assets resulting from fleet growth and higher value vehicles in UK Motor Finance and increased investment properties from business growth in Lloyds Living. \n Total liabilities were £896 billion, £35 billion higher over the year (31 December 2024: £861 billion). Customer deposits of £496 billion increased in the year by £14 billion. Retail deposits increased £5.5 billion in the year, including growth in Retail savings accounts, as a result of net inflows to limited withdrawal and fixed term deposits particularly through increased ISA balances, and growth in European retail balances. This was alongside strength in current account balances. Commercial Banking deposits were up £8.5 billion, resulting from growth in targeted sectors. Repurchase agreements at amortised cost increased by £1 billion to £39 billion (31 December 2024: £38 billion), following £13 billion of repayments of drawings from the Bank of England's Term Funding Scheme with additional incentives for SMEs (TFSME), more than offset by increased repurchase agreements. \n Financial liabilities at fair value through profit or loss were stable at £28 billion at 31 December 2025 and derivative financial liabilities decreased by £6 billion to £16 billion as a result of market movements. Liabilities arising from insurance and investment contracts increased by £24 billion reflecting the increase in policyholder investments. Other liabilities decreased by £4 billion to £26 billion and included the effects of the disposal of the Group's bulk annuity business, partially offset by increased provisions primarily driven by the provision increase in relation to motor finance commission arrangements. Debt securities in issue at amortised cost increased by £7 billion to £78 billion, with new issuances in the year, while subordinated liabilities remained stable at £10 billion. \n Total equity of £48 billion at 31 December 2025 increased by £2 billion from £46 billion at 31 December 2024. Profit for the year, the unwind of the cash flow hedge reserve and issuance of AT1 capital instruments in February 2025 and November 2025 were partially offset by the impact of the ordinary share buyback programme, the dividends paid in May 2025 and September 2025, as well as the impact of redemptions of AT1 capital instruments in June 2025 and September 2025, alongside a lower pension surplus. \n \n \n \n SUMMARY OF GROUP RESULTS (continued) \n Income statement - underlying basis A \n The Group's underlying profit was £6,777 million in 2025, up 7% versus the prior year (2024: £6,343 million). Higher underlying net interest income and higher underlying other income were partially offset by higher operating costs and a higher underlying impairment charge given a significant release in 2024 driven by the improved economic outlook. Underlying profit for the fourth quarter was £1,926 million versus £1,290 million in the third quarter of the year. \n \n \n \n Net income A \n \n \n \n \n \n \n \n   \n \n \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n 2024 \n £m \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying net interest income \n \n \n 13,635 \n \n \n   \n \n \n   \n \n \n 12,845 \n \n \n   \n \n \n   \n \n \n 6 \n \n \n \n \n Underlying other income \n \n \n 6,120 \n \n \n   \n \n \n   \n \n \n 5,597 \n \n \n   \n \n \n   \n \n \n 9 \n \n \n \n \n Operating lease depreciation 1 \n \n \n (1,454) \n \n \n   \n \n \n   \n \n \n (1,325) \n \n \n   \n \n \n   \n \n \n (10) \n \n \n \n \n Net income A \n \n \n 18,301 \n \n \n   \n \n \n   \n \n \n 17,117 \n \n \n   \n \n \n   \n \n \n 7 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Banking net interest margin A \n \n \n 3.06% \n \n \n   \n \n \n   \n \n \n 2.95% \n \n \n   \n \n \n   \n \n \n 11bp \n \n \n \n \n Average interest-earning banking assets A \n \n \n £462.9bn \n \n \n   \n \n \n   \n \n \n £451.2bn \n \n \n   \n \n \n   \n \n \n 3 \n \n \n \n \n 1     Net of losses on disposal of operating lease assets of £10 million (2024: profit of £59 million). \n \n \n \n Net income of £18,301 million was up 7% compared to 2024, driven by higher underlying net interest income and higher underlying other income, partially offset by an increased charge for operating lease depreciation. Net income in the fourth quarter of £4,744 million was up 2% compared to the third quarter reflecting the same trends. \n Within net income, underlying net interest income of £13,635 million was up 6% versus the prior year (2024: £12,845 million). This was supported by a banking net interest margin of 3.06% (2024: 2.95%). The net interest margin benefitted from franchise led volume growth and stronger structural hedge income as eligible balances were reinvested in a higher rate environment, partially offset by continued mortgage and deposit headwinds. Average interest-earning banking assets in 2025 of £462.9 billion (2024: £451.2 billion) reflect strong customer led growth, primarily driven by UK mortgages, credit cards, UK Retail unsecured loans and the European retail business. In Commercial Banking, average interest-earning banking assets reduced, impacted by continued repayments of government-backed lending within Business and Commercial Banking and lower lending to banks offsetting non government-backed lending growth. Underlying net interest income in 2025 also included a non-banking net interest expense of £515 million (2024: £469 million), increasing as a result of growth in the Group's other operating income activities and the refinancing of these activities at higher rates. The Group expects underlying net interest income for 2026 to be c.£14.9 billion. \n Underlying net interest income of £3,529 million in the fourth quarter of 2025 was 2% higher than the third quarter (three months to 30 September 2025: £3,451 million). A growing structural hedge contribution more than offset the impact of continued headwinds from asset margin compression and a reduced UK Bank Rate. This resulted in an increase in the banking net interest margin to 3.10% (three months to 30 September 2025: 3.06%). Average interest-earning banking assets were higher in the fourth quarter at £470.3 billion (three months to 30 September 2025: £465.5 billion), driven by UK mortgages, the European retail business and the Corporate and Institutional Banking business. \n The Group manages the risk to earnings and capital from movements in interest rates by hedging the net liabilities which are stable or less sensitive to movements in rates. As at 31 December 2025, the notional balance of the sterling structural hedge was £244 billion (31 December 2024: £242 billion) with a weighted average life of approximately 3.75 years (31 December 2024: approximately 3.5 years). The Group generated £5.5 billion of total income from sterling structural hedge balances in 2025, an increase of £1.3 billion over the prior year (2024: £4.2 billion). The Group expects sterling structural hedge earnings to be c.£7.0 billion in 2026, to be c.£8.0 billion in 2027, with earnings growth from the structural hedge expected to continue thereafter. \n   \n SUMMARY OF GROUP RESULTS (continued) \n Income statement - underlying basis A (continued) \n Underlying other income of £6,120 million in 2025 grew by 9% compared to the prior year (2024: £5,597 million), driven by strengthening customer activity and the benefit of investments in strategic initiatives. This included an increase of 12% in Retail, driven by UK Motor Finance from fleet growth and higher average vehicle rental values, alongside strength in income from current accounts and credit cards. Commercial Banking increased by 1% from higher transaction banking and markets income, partially offset by lower loan markets activity, with 2024 benefitting from one-off gains. Insurance, Pensions and Investments underlying other income was up 11% from strengthening performance in the workplace pensions business, higher general insurance income net of claims and the full acquisition of Schroders Personal Wealth in the fourth quarter. Equity Investments and Central Items benefitted from strong business growth in Lloyds Living. \n Underlying other income in the fourth quarter was up 2% compared to the third quarter. This was supported by continued growth in UK Motor Finance within Retail, higher transaction banking income in Commercial Banking, alongside the full acquisition of Schroders Personal Wealth in Insurance, Pensions and Investments and continued business growth in Lloyds Living. \n Operating lease depreciation of £1,454 million in 2025 was 10% higher than in the prior year (2024: £1,325 million), due to fleet growth, the depreciation of higher value vehicles and declines in used electric car prices, partially offset by risk mitigation actions. Compared to the third quarter of 2025, operating lease depreciation was 4% higher, in line with the continued growth in fleet size and year-end valuations. The Group continues to mitigate the risk of used car price movements through a number of market and customer initiatives to both improve performance and reduce volatility, including lease extensions, used car leasing, remarketing agreements and residual value insurance. \n \n \n \n Total costs A \n \n \n \n \n \n \n \n   \n \n \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n 2024 \n £m \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Operating costs A \n \n \n 9,761 \n \n \n   \n \n \n   \n \n \n 9,442 \n \n \n   \n \n \n   \n \n \n (3) \n \n \n \n \n Remediation \n \n \n 968 \n \n \n   \n \n \n   \n \n \n 899 \n \n \n   \n \n \n   \n \n \n (8) \n \n \n \n \n Total costs A \n \n \n 10,729 \n \n \n   \n \n \n   \n \n \n 10,341 \n \n \n   \n \n \n   \n \n \n (4) \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Cost:income ratio A \n \n \n 58.6% \n \n \n   \n \n \n   \n \n \n 60.4% \n \n \n   \n \n \n   \n \n \n (1.8)pp \n \n \n \n \n   \n \n \n \n Operating costs of £9,761 million increased by 3% in 2025 reflecting strategic investment (including an increased severance charge), business growth costs (including the full acquisition of Schroders Personal Wealth) and inflationary pressures. These factors were partially mitigated by cost savings from investment and continued business-as-usual cost discipline. Operating costs in the fourth quarter increased by 12% as expected, which includes the Bank Levy, additional investment spend and costs associated with the full acquisition of Schroders Personal Wealth. \n A remediation charge of £968 million was recognised by the Group in 2025 (2024: £899 million), including £800 million in relation to the potential impact of motor finance commission arrangements taken in the third quarter, bringing the total provision recognised for motor finance to £1,950 million. The FCA published Consultation Paper CP25/27 in October 2025 setting out detailed proposals for a scheme to redress unfair customer relationships, including a more generous redress methodology than anticipated in the previous scenario-based provision. The Group has made representations to the FCA on a number of aspects of the proposed scheme, including that the proposed redress methodology does not reflect the loss to the customer. The Group will assess developments and potential impacts on the provision following the announcement of the final scheme rules, which are expected by the end of March 2026. The current provision represents the Group's best estimate. In the fourth quarter the Group recognised a remediation charge of £56 million across a small number of rectification programmes. \n Total costs, including remediation, of £10,729 million were 4% higher than the prior year, with net income up 7%. The cost:income ratio was 58.6% (2024: 60.4%) and the cost:income ratio excluding remediation was 53.3%. For 2026, the cost:income ratio is expected to be less than 50%, with operating costs expected to be less than £9.9 billion. \n \n \n \n SUMMARY OF GROUP RESULTS (continued) \n Income statement - underlying basis A (continued) \n Underlying impairment A \n \n \n \n \n \n \n \n   \n \n \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n 2024 \n £m \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Charges (credits) pre-updated MES 1 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Retail \n \n \n 734 \n \n \n   \n \n \n   \n \n \n 789 \n \n \n   \n \n \n   \n \n \n 7 \n \n \n \n \n Commercial Banking \n \n \n (14) \n \n \n   \n \n \n   \n \n \n 48 \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Other \n \n \n 1 \n \n \n   \n \n \n   \n \n \n (10) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n 721 \n \n \n   \n \n \n   \n \n \n 827 \n \n \n   \n \n \n   \n \n \n 13 \n \n \n \n \n Updated economic outlook (MES) \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Retail \n \n \n - \n \n \n   \n \n \n   \n \n \n (332) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Commercial Banking \n \n \n 74 \n \n \n   \n \n \n   \n \n \n (62) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n 74 \n \n \n   \n \n \n   \n \n \n (394) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying impairment charge A \n \n \n 795 \n \n \n   \n \n \n   \n \n \n 433 \n \n \n   \n \n \n   \n \n \n (84) \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Asset quality ratio A \n \n \n 0.17% \n \n \n   \n \n \n   \n \n \n 0.10% \n \n \n   \n \n \n   \n \n \n 7bp \n \n \n \n \n 1     Impairment charges excluding the impact from the updated economic outlook (multiple economic scenarios, MES) taken each quarter. \n \n \n \n The underlying impairment charge was £795 million (2024: £433 million), resulting in an asset quality ratio of 17 basis points. The higher charge includes a £74 million net charge from updated multiple economic scenarios (MES), compared to a credit from MES of £394 million in 2024 which benefitted from an improved economic outlook, notably house price growth. \n The pre-updated MES charge of £721 million for 2025 is equivalent to an asset quality ratio of 15 basis points. This was lower compared to the prior year due to strong credit performance, with arrears low and stable across portfolios, alongside one-off benefits primarily from model refinements and calibrations. In Retail, the charge for 2025 reflected both strong performance alongside the benefits from calibrations and model refinements and a debt sale. In Commercial Banking, higher charges in the first half of the year driven by a small number of individual cases were more than offset by releases from Stage 1 and Stage 2 model calibrations capturing strong credit performance and reducing interest rates throughout the year. \n The impairment charge in the fourth quarter of £177 million, equivalent to an asset quality ratio of 14 basis points, includes a £47 million MES charge reflecting a higher short term unemployment outlook. The low pre-updated MES charge for the quarter includes model refinement benefits and a large debt sale write back in Retail which together reduced the charge. The asset quality ratio excluding the model and debt sale benefits is considered to be closer to 25 basis points, both for the full year and the fourth quarter. The Group expects the asset quality ratio to be c.25 basis points in 2026. \n \n \n \n SUMMARY OF GROUP RESULTS (continued) \n Income statement - underlying basis A (continued) \n Restructuring, volatility and other items \n \n \n \n \n \n \n \n   \n \n \n 2025 \n £m \n \n \n   \n \n \n   \n \n \n 2024 \n £m \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying profit A \n \n \n 6,777 \n \n \n   \n \n \n   \n \n \n 6,343 \n \n \n   \n \n \n   \n \n \n 7 \n \n \n \n \n Restructuring \n \n \n (46) \n \n \n   \n \n \n   \n \n \n (40) \n \n \n   \n \n \n   \n \n \n (15) \n \n \n \n \n Market and other volatility \n \n \n 72 \n \n \n   \n \n \n   \n \n \n (144) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Amortisation of purchased intangibles \n \n \n (86) \n \n \n   \n \n \n   \n \n \n (81) \n \n \n   \n \n \n   \n \n \n (6) \n \n \n \n \n Fair value unwind \n \n \n (56) \n \n \n   \n \n \n   \n \n \n (107) \n \n \n   \n \n \n   \n \n \n 48 \n \n \n \n \n Volatility and other items \n \n \n (70) \n \n \n   \n \n \n   \n \n \n (332) \n \n \n   \n \n \n   \n \n \n 79 \n \n \n \n \n Statutory profit before tax \n \n \n 6,661 \n \n \n   \n \n \n   \n \n \n 5,971 \n \n \n   \n \n \n   \n \n \n 12 \n \n \n \n \n Tax expense \n \n \n (1,904) \n \n \n   \n \n \n   \n \n \n (1,494) \n \n \n   \n \n \n   \n \n \n (27) \n \n \n \n \n Statutory profit after tax \n \n \n 4,757 \n \n \n   \n \n \n   \n \n \n 4,477 \n \n \n   \n \n \n   \n \n \n 6 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Earnings per share \n \n \n 7.0p \n \n \n   \n \n \n   \n \n \n 6.3p \n \n \n   \n \n \n   \n \n \n 0.7p \n \n \n \n \n Return on tangible equity A \n \n \n 12.9% \n \n \n   \n \n \n   \n \n \n 12.3% \n \n \n   \n \n \n   \n \n \n 0.6pp \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n At 31 Dec 2025 \n \n \n   \n \n \n   \n \n \n At 31 Dec 2024 \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Tangible net assets per share A \n \n \n 57.0p \n \n \n   \n \n \n   \n \n \n 52.4p \n \n \n   \n \n \n   \n \n \n 4.6p \n \n \n \n \n   \n \n \n \n Restructuring costs for 2025 were £46 million (2024: £40 million). Volatility and other items were a net loss of £70 million for 2025 (2024: net loss of £332 million). This included the usual charges for the amortisation of purchased intangibles of £86 million and fair value unwind of £56 million. The reduction in fair value unwind primarily resulted from the maturity of debt instruments, fair valued as part of the HBOS acquisition. This was alongside a gain from market and other volatility of £72 million (2024: net loss of £144 million), as a result of the gain on sale of the Group's bulk annuities portfolio to Rothesay Life plc in the first half of the year and the gain following the full acquisition of Schroders Personal Wealth in the fourth quarter, partially offset by negative market volatility, primarily insurance related. Volatility and other items in the fourth quarter amounted to a net gain of £87 million. \n \n \n \n Return on tangible equity and tangible net asset value \n The return on tangible equity for the year was 12.9%, or 14.8% excluding the third quarter charge for motor finance commission arrangements (2024: 12.3%), with 15.7% in the fourth quarter. The Group now expects the return on tangible equity for 2026 to be greater than 16%. \n Tangible net assets per share at 31 December 2025 were 57.0 pence, up 4.6 pence in the year (31 December 2024: 52.4 pence) and up 2.0 pence in the fourth quarter. The increase across 2025 resulted from attributable profit, the unwind of the cash flow hedge reserve and a reduction in the number of shares in issue due to the ordinary share buyback announced in February 2025. This was partially offset by capital distributions, a lower pension surplus and increased intangible assets following the full acquisition of Schroders Personal Wealth. \n \n \n \n Tax \n The Group recognised a tax expense of £1,904 million in 2025 (2024: £1,494 million), representing an effective tax rate of 28.6%. Excluding motor finance remediation costs, the tax rate would have been 27.2%. The Group expects a medium-term effective tax rate of around 27% based on the banking surcharge rate of 3% and the corporation tax rate of 25%. \n \n \n \n SUMMARY OF GROUP RESULTS (continued) \n Balance sheet \n \n \n \n \n \n \n \n   \n \n \n At 31 Dec \n 2025 \n \n \n   \n \n \n   \n \n \n At 31 Dec 2024 \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying loans and advances to customers A \n \n \n £481.1bn \n \n \n   \n \n \n   \n \n \n £459.1bn \n \n \n   \n \n \n   \n \n \n 5 \n \n \n \n \n Customer deposits \n \n \n £496.5bn \n \n \n   \n \n \n   \n \n \n £482.7bn \n \n \n   \n \n \n   \n \n \n 3 \n \n \n \n \n Loan to deposit ratio A \n \n \n 97% \n \n \n   \n \n \n   \n \n \n 95% \n \n \n   \n \n \n   \n \n \n 2pp \n \n \n \n \n Wholesale funding 1 \n \n \n £99.4bn \n \n \n   \n \n \n   \n \n \n £92.5bn \n \n \n   \n \n \n   \n \n \n 7 \n \n \n \n \n Wholesale funding <1 year maturity 1 \n \n \n £37.0bn \n \n \n   \n \n \n   \n \n \n £31.3bn \n \n \n   \n \n \n   \n \n \n 18 \n \n \n \n \n of which: money market funding <1 year maturity 1 \n \n \n £26.6bn \n \n \n   \n \n \n   \n \n \n £16.9bn \n \n \n   \n \n \n   \n \n \n 57 \n \n \n \n \n Liquidity coverage ratio - eligible assets 2 \n \n \n £131.4bn \n \n \n   \n \n \n   \n \n \n £134.4bn \n \n \n   \n \n \n   \n \n \n (2) \n \n \n \n \n Liquidity coverage ratio 3 \n \n \n 145% \n \n \n   \n \n \n   \n \n \n 146% \n \n \n   \n \n \n   \n \n \n (1)pp \n \n \n \n \n Net stable funding ratio 4 \n \n \n 124% \n \n \n   \n \n \n   \n \n \n 129% \n \n \n   \n \n \n   \n \n \n (5)pp \n \n \n \n \n Total underlying expected credit loss allowance A \n \n \n £3,353m \n \n \n   \n \n \n   \n \n \n £3,651m \n \n \n   \n \n \n   \n \n \n (8) \n \n \n \n \n 1     Excludes balances relating to cash collateral of £1.5 billion (31 December 2024: £2.8 billion). \n 2     Eligible assets are calculated as a monthly rolling simple average of month-end observations over the previous 12 months post any liquidity haircuts. \n 3     The liquidity coverage ratio is calculated as a simple average of month-end observations over the previous 12 months. \n 4     The net stable funding ratio is calculated as a simple average of month-end observations over the previous four quarter-ends. \n \n \n \n The Group saw strong customer lending growth in the year, with underlying loans and advances to customers increasing by £22.0 billion (or 5%) to £481.1 billion. This included growth of £10.8 billion in UK mortgages alongside growth across UK Retail unsecured loans, credit cards, UK Motor Finance and the European retail business totalling £7.7 billion. Lending balances increased by £2.7 billion in Commercial Banking, with higher Institutional balances including securitised products, alongside corporate infrastructure growth, partially offset by repayments of £1.4 billion of government-backed lending within Business and Commercial Banking. Underlying loans and advances increased by £4.0 billion in the fourth quarter, including growth in UK mortgages, Retail unsecured products and the European retail business. \n Customer deposits of £496.5 billion increased significantly in the year, by £13.8 billion, or 3%. Retail deposits were up £5.5 billion in the year, including £4.0 billion growth in Retail savings accounts, as a result of net inflows to limited withdrawal and fixed term deposits particularly through increased ISA balances, and growth in European retail balances. This was alongside strength in current account balances. Commercial Banking deposits were up £8.5 billion in the year (31 December 2024: £162.6 billion), resulting from growth in targeted sectors. In the fourth quarter, customer deposits reduced £0.2 billion, with growth in Retail current accounts of £1.0 billion, offset by a reduction of £1.5 billion in Commercial Banking, given seasonal flows and balance sheet management. \n The Group saw growth of £7.9 billion net new money during 2025 in Insurance, Pensions and Investments open book assets under administration (AuA). In total, open book AuA stand at £232 billion at 31 December 2025. This included £0.5 billion of net new money and £18 billion of AuA relating to the full acquisition of Schroders Personal Wealth. \n The Group has a large, high quality liquid asset portfolio held mainly in cash and government bonds, with all assets hedged for interest rate risk. The Group's liquid assets continue to significantly exceed regulatory requirements and internal risk appetite, with a strong, stable liquidity coverage ratio of 145% at 31 December 2025 (31 December 2024: 146%) and a net stable funding ratio of 124% (31 December 2024: 129%). The loan to deposit ratio of 97%, slightly up versus 31 December 2024, continues to reflect a robust funding and liquidity position, with significant capacity to grow lending. Wholesale funding increased to £99.4 billion (2024: £92.5 billion), with money market funding returning to normalised levels following the repayment of £13.1 billion of drawings from the Bank of England's Term Funding Scheme with additional incentives for SMEs (TFSME). \n   \n SUMMARY OF GROUP RESULTS (continued) \n Balance sheet (continued) \n The underlying expected credit loss (ECL) allowance reduced to £3.4 billion at 31 December 2025 (31 December 2024: £3.7 billion). The uplift from the base case to probability-weighted ECL is £0.4 billion (31 December 2024: £0.4 billion). The ECL allowance includes judgemental adjustments which increase the ECL by £242 million (31 December 2024: £15 million decrease to ECL). The increase compared to 2024 is primarily due to the removal of negative ECL adjustments previously held for loss given default adjustments in both Retail Unsecured and Commercial Banking, where respective model enhancements have removed the need for an adjustment. The ECL allowance continues to include a £50 million judgemental adjustment taken in the first half of the year in respect of the global tariff and geo-political disruption risks to specific drivers across various corporate sectors not reflected in broad macroeconomic model variables. \n \n \n \n Capital \n \n \n \n \n \n \n \n   \n \n \n At 31 Dec \n 2025 \n \n \n   \n \n \n   \n \n \n At 31 Dec 2024 \n \n \n   \n \n \n   \n \n \n Change \n % \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n CET1 ratio \n \n \n 14.0% \n \n \n   \n \n \n   \n \n \n 14.2% \n \n \n   \n \n \n   \n \n \n (0.2)pp \n \n \n \n \n Pro forma CET1 ratio A,1 \n \n \n 13.2% \n \n \n   \n \n \n   \n \n \n 13.5% \n \n \n   \n \n \n   \n \n \n (0.3)pp \n \n \n \n \n UK leverage ratio \n \n \n 5.4% \n \n \n   \n \n \n   \n \n \n 5.5% \n \n \n   \n \n \n   \n \n \n (0.1)pp \n \n \n \n \n Risk-weighted assets \n \n \n £235.5bn \n \n \n   \n \n \n   \n \n \n £224.6bn \n \n \n   \n \n \n   \n \n \n 5 \n \n \n \n \n   \n \n \n \n Capital generation \n \n \n \n \n Pro forma CET1 ratio as at 31 December 2024 A,1 \n \n \n 13.5% \n \n \n   \n \n \n \n \n Banking build (bps) 2 \n \n \n 228 \n \n \n   \n \n \n \n \n Insurance dividend (bps) \n \n \n 9 \n \n \n   \n \n \n \n \n Risk-weighted assets (bps) \n \n \n (54) \n \n \n   \n \n \n \n \n Other movements (bps) 3 \n \n \n 14 \n \n \n   \n \n \n \n \n Retail secured CRD IV increases (bps) 4 \n \n \n (19) \n \n \n   \n \n \n \n \n Capital generation excluding provision charge for motor finance commission arrangements (bps) \n \n \n 178 \n \n \n   \n \n \n \n \n Provision charge for motor finance commission arrangements (bps) \n \n \n (31) \n \n \n   \n \n \n \n \n Capital generation (bps) \n \n \n 147 \n \n \n   \n \n \n \n \n Ordinary dividend (bps) \n \n \n (97) \n \n \n   \n \n \n \n \n Share buyback accrual (bps) \n \n \n (79) \n \n \n   \n \n \n \n \n Pro forma CET1 ratio as at 31 December 2025 A,1 \n \n \n 13.2% \n \n \n   \n \n \n \n \n 1     31 December 2025 and 31 December 2024 pro forma CET1 ratios reflect the full impact of the share buybacks announced in respect of 2025 and 2024. 31 December 2024 pro forma CET1 ratio also reflects the ordinary dividend received from the Insurance business in February 2025. The CET1 and pro forma CET1 ratios at 31 December 2025 both reflect an ordinary dividend received from the Insurance business in December 2025, that would previously have been received in February of the following year. \n 2    Includes impairment charge and excess regulatory expected losses, excludes the charge for motor finance commission arrangements. \n 3     Includes share-based payments and market volatility. \n 4     Retail secured CRD IV increases include additional risk-weighted assets as well as related excess regulatory expected losses. \n \n \n \n The Group's pro forma CET1 capital ratio at 31 December 2025 was 13.2% (31 December 2024: 13.5% pro forma). Capital generation during the year was 147 basis points, in line with updated guidance. Excluding the provision charge for motor finance commission arrangements in the third quarter, capital generation was 178 basis points. \n   \n SUMMARY OF GROUP RESULTS (continued) \n Capital (continued) \n Capital generation reflects strong banking build and the £200 million of dividends received from the Insurance business across July and December 2025, partially offset by risk-weighted asset increases and the charge for motor finance. Regulatory headwinds of 19 basis points in the year reflect an uplift for the CRD IV model outcomes on Retail secured. The impact of the interim ordinary dividend paid in September 2025 and the accrual for the recommended final ordinary dividend equates to 97 basis points, with a further 79 basis points to cover the accrual for the announced ordinary share buyback programme of up to £1.75 billion. Capital generation in the fourth quarter of 37 basis points reflects strong banking build and the dividend received from the Insurance business in December 2025, partially offset by risk-weighted asset increases and regulatory headwinds. The Group reaffirms guidance for capital generation in 2026 of greater than 200 basis points. \n Excluding the full impact of the announced ordinary share buyback programme, the Group's CET1 capital ratio at 31 December 2025 was 14.0% (31 December 2024: 14.2%). \n Risk-weighted assets increased by £10.9 billion to £235.5 billion at 31 December 2025 (31 December 2024: £224.6 billion). This reflects the impact of strong customer lending growth, Retail secured CRD IV increases and other movements, partially offset by continued optimisation activity. In the fourth quarter, risk-weighted assets increased by £3.2 billion following lending growth and Retail secured CRD IV increases, partially offset by optimisation activity. In the context of the Retail secured CRD IV models, an additional risk-weighted asset increase of £2.0 billion was recognised in the fourth quarter. This reflects model outcomes, in line with previous guidance on the anticipated impact and remains subject to review and approval by the PRA. \n The Group expects the initial impact of Basel 3.1 implementation on 1 January 2027 to result in a Day 1 risk-weighted assets reduction in the range of c.£6 billion to c.£8 billion. \n The PRA provided an update to the Group's Pillar 2A CET1 capital requirement during the third quarter, with the requirement reducing slightly to c.1.4% of risk-weighted assets from the previous requirement of c.1.5% of risk-weighted assets. The Group's total regulatory CET1 capital requirement remains c.12% of risk-weighted assets. The Board's view of the ongoing level of total CET1 capital required to grow the business, meet current and future regulatory requirements and cover economic and business uncertainties remains c.13.0%. This includes a management buffer of c.1%. The Board intends to pay down to the CET1 capital target of c.13.0% by the end of 2026. \n \n \n \n Pensions \n The 31 December 2022 triennial valuation for the main defined benefit schemes was completed in 2023. Following the contributions paid in 2023, no further deficit contributions have been paid for this triennial period (to 31 December 2025). Any future contributions will be conditional on the 31 December 2025 triennial valuation which is expected to be completed during 2026. \n \n \n \n Dividend and share buyback \n The Group has a progressive and sustainable ordinary dividend policy whilst maintaining the flexibility to return further surplus capital through share buybacks or special dividends. In February 2025, the Board decided to return surpl...

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