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LLOY Lloyds Banking Group Plc

51.76
0.09 (0.17%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Lloyds Banking Group Plc LSE:LLOY London Ordinary Share GB0008706128 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.09 0.17% 51.76 51.70 51.72 52.43 51.57 52.23 248,468,301 16:35:16
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Commercial Banks, Nec 23.74B 5.46B 0.0859 6.02 32.87B

Lloyds Bank PLC 2021 Q1 Interim Management Statement (8978W)

28/04/2021 11:58am

UK Regulatory


Lloyds Banking (LSE:LLOY)
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From Mar 2021 to Mar 2024

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TIDM94WP TIDMLLOY

RNS Number : 8978W

Lloyds Bank PLC

28 April 2021

Lloyds Bank plc

Q1 2021 Interim Management Statement

28 April 2021

REVIEW OF PERFORMANCE

Income statement

In the three months to 31 March 2021, the Group recorded a profit before tax of GBP1,768 million compared to GBP404 million in the same period in 2020, representing an increase of GBP1,364 million largely reflecting the improved economic outlook for the UK in the current quarter compared to the deterioration assumed in the first quarter of 2020. Profit after tax was GBP1,283 million.

Total income decreased by GBP258 million, or 7 per cent, to GBP3,644 million in the three months to 31 March 2021 compared to GBP3,902 million in the first three months of 2020; there was a decrease of GBP229 million in net interest income and GBP29 million a decrease in other income.

Net interest income was down GBP229 million, or 8 per cent, to GBP2,656 million compared to GBP2,885 million in the first three months of 2020. The net interest margin reduced as a result of the lower rate environment. Average interest-earning assets increased driven by growth in the open mortgage book and an increase in government-backed lending, partially offset by lower balances in unsecured personal loans, credit cards and motor finance, as well as the effects of the continued optimisation of the Corporate and Institutional book within Commercial Banking.

Other income was GBP29 million lower at GBP988 million in the three months to 31 March 2021 compared to GBP1,017 million in the same period last year; there was a fall in net fee and commission income as reduced card and other transaction-based income streams reflecting lower levels of customer activity driven by the coronavirus pandemic were only partly offset by some increase in commercial banking fees. Other operating income also decreased due to lower levels of operating lease rental income as a result of the reduced Lex Autolease vehicle fleet size and lower gains on the disposal of financial assets at fair value through other comprehensive income.

Total operating expenses increased by GBP25 million to GBP2,212 million compared to GBP2,187 million in the first three months of 2020. There was an increase of GBP41 million in operating costs reflecting higher restructuring costs, primarily technology research and development costs and severance, as well as slightly higher property transformation costs. These were partially offset by a reduction in depreciation of tangible fixed assets due to the reduced Lex Autolease vehicle fleet size. Staff costs were little changed. The charge in respect of regulatory provisions was GBP16 million lower at GBP64 million and related to pre-existing programmes.

As highlighted in the 2020 results, in relation to HBOS Reading, decisions from the independent panel re-review on direct and consequential losses will start to be issued during 2021. This is likely to result in further charges but it is not possible to estimate the potential impact at this stage.

There was a net release of expected credit loss allowances (ECLs) in the quarter of GBP336 million, compared to a charge of GBP1,311 million in the first quarter of 2020, largely reflecting the improved UK economic outlook.

The ECL allowance in respect of loans and advances to customers remains high by historical standards at GBP5,174 million, a coverage ratio of 1.1 per cent. This is consistent with the Group's updated macroeconomic projections. It assumes that a large proportion of expected losses will crystallise over the next 12 to 18 months as support measures subside and unemployment increases.

Credit performance has remained stable in the quarter, with the flow of assets into arrears, defaults and write-offs remaining at low levels in part due to the continued effectiveness of support schemes, including the Coronavirus Job Retention Scheme and payment holidays extended by the Group which have now largely matured. The Group has maintained judgemental ECL allowances in respect of losses assumed to have been suppressed over the last 12 months by support schemes, given that cumulative losses remain lower than would have ordinarily been anticipated.

The Group's GBP400 million central overlay has been maintained. It was added at the year end in recognition of the significant uncertainty with regard to the efficacy of the vaccine, the vaccination rollout, potential virus mutations and economic performance post lockdown restrictions and Government support. Although the base case outlook has improved in the first quarter, the Group still considers these risks to remain and that the conditioning assumptions for the base case and associated scenarios around this do not necessarily capture these unprecedented risks.

REVIEW OF PERFORMANCE (continued)

The Group recognised a tax expense of GBP485 million in the period compared to a credit of GBP396 million in the first three months of 2020. The prior year credit included an uplift in deferred tax assets following the announcement by the UK Government that it would maintain the corporation tax rate at 19 per cent. On 3 March 2021, the Government announced its intention to increase the rate of corporation tax from 19 per cent to 25 per cent with effect from 1 April 2023. Had this change in corporation tax rate been substantively enacted at 31 March 2021, the impact would have been to recognise a c.GBP1.25 billion deferred tax credit in the income statement and a c.GBP150 million debit within other comprehensive income, increasing the Group's net deferred tax asset by c.GBP1.1 billion.

Balance sheet

Total assets were GBP4,536 million higher at GBP604,475 million at 31 March 2021 compared to GBP599,939 million at 31 December 2020. There was an increase in cash and balances at central banks which were GBP11,805 million higher at GBP61,693 million reflecting increased liquidity holdings. Partly offsetting this, financial assets at amortised cost decreased by GBP1,917 million, to GBP490,049 million at 31 March 2021 compared to GBP491,966 million at 31 December 2020, as a result of a GBP4,861 million decrease in bank and customer reverse repurchase agreement balances. Other loans and advances to customers, net of impairment allowances, were GBP3,227 million higher as increases in the open mortgage book, motor finance and SME lending were only partially offset by reductions in the closed mortgage book, other retail balances and larger corporate lending. Derivative assets were GBP1,680 million lower at GBP6,661 million compared to GBP8,341 million at 31 December 2020, reflecting reduced volumes and movements in interest and exchange rates over the first three months of 2021.

Total liabilities were GBP4,380 million higher at GBP563,201 million compared to GBP558,821 million at 31 December 2020. Customer deposits increased by GBP11,804 million, or 3 per cent, to GBP446,373 million compared to GBP434,569 million at 31 December 2020, as a result of growth in retail current and savings accounts and commercial deposits. This increase was partly offset by a reduction in deposits from banks which were GBP3,408 million lower at GBP21,589 million, reflecting the reduced need for wholesale funding following further growth in customer deposits, and in derivative liabilities which were GBP1,863 million lower.

Shareholders' equity was little changed at GBP35,259 million as profit retentions were largely offset by movements in the cash flow hedging reserve.

Capital

The Group's Common equity tier 1 (CET1) capital ratio has increased from 15.5 per cent at 31 December 2020 to 16.1 per cent(1) at 31 March 2021, primarily as a result of profit for the period and a reduction in risk-weighted assets, partially offset by pension contributions. The tier 1 capital ratio increased from 19.8 per cent at 31 December 2020 to 20.0 per cent(1) at 31 March 2021 and the total capital ratio increased from 23.5 per cent at 31 December 2020 to 23.9 per cent(1) at 31 March 2021, reflecting the increase in CET1 capital and the reduction in risk-weighted assets, partially offset by the annual reduction in transitional limits applied to legacy tier 1 and tier 2 instruments. The total capital ratio also reflects the issuance of a new tier 2 capital instrument in the quarter.

Risk-weighted assets reduced by GBP2.7 billion, or 2 per cent, to GBP168.2 billion at 31 March 2021, compared to GBP170.9 billion at 31 December 2020, primarily driven by optimisation activity undertaken in Commercial Banking.

The Group's UK leverage ratio increased from 5.5 per cent at 31 December 2020 to 5.6 per cent(1) at 31 March 2021.

(1) Incorporating profits for the period that remain subject to formal verification in accordance with the Capital Requirements Regulation.

CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)

 
                                                   Three months    Three months 
                                                       ended 31        ended 31 
                                                       Mar 2021        Mar 2020 
                                                           GBPm            GBPm 
 
Net interest income                                       2,656         2,885 
Other income                                                988         1,017 
                                                   ------------  ------------ 
Total income                                              3,644         3,902 
Total operating expenses                                (2,212)       (2,187) 
Impairment                                                  336       (1,311) 
                                                   ------------  ------------ 
Profit before tax                                         1,768           404 
Tax (expense) credit                                      (485)           396 
                                                   ------------  ------------ 
Profit for the period                                     1,283           800 
                                                   ------------  ------------ 
 
Profit attributable to ordinary shareholders              1,176           685 
Profit attributable to other equity holders                 102           104 
                                                   ------------  ------------ 
Profit attributable to equity holders                     1,278           789 
Profit attributable to non-controlling interests              5            11 
                                                   ------------  ------------ 
Profit for the period                                     1,283           800 
                                                   ------------  ------------ 
 

CONDENSED CONSOLIDATED BALANCE SHEET

 
                                                               At 31 Mar    At 31 Dec 
                                                                    2021         2020 
                                                                    GBPm         GBPm 
                                                             (unaudited)    (audited) 
 
Assets 
Cash and balances at central banks                                61,693     49,888 
Financial assets at fair value through profit 
 or loss                                                           1,276      1,674 
Derivative financial instruments                                   6,661      8,341 
                                                             -----------  --------- 
Loans and advances to banks                                        6,003      5,950 
Loans and advances to customers                                  478,350    480,141 
Debt securities                                                    4,829      5,137 
Due from fellow Lloyds Banking Group undertakings                    867        738 
                                                             -----------  --------- 
Financial assets at amortised cost                               490,049    491,966 
Financial assets at fair value through other comprehensive 
 income                                                           22,979     27,260 
Other assets                                                      21,817     20,810 
                                                             -----------  --------- 
Total assets                                                     604,475    599,939 
                                                             -----------  --------- 
 
Liabilities 
Deposits from banks                                               21,589     24,997 
Customer deposits                                                446,373    434,569 
Due to fellow Lloyds Banking Group undertakings                    5,854      6,875 
Financial liabilities at fair value through profit 
 or loss                                                           6,775      6,831 
Derivative financial instruments                                   6,365      8,228 
Debt securities in issue                                          57,105     59,293 
Subordinated liabilities                                          10,049      9,242 
Other liabilities                                                  9,091      8,786 
                                                             -----------  --------- 
Total liabilities                                                563,201    558,821 
 
Ordinary shareholders' equity                                     35,259     35,105 
Other equity instruments                                           5,935      5,935 
Non-controlling interests                                             80         78 
                                                             -----------  --------- 
Total equity                                                      41,274     41,118 
                                                             -----------  --------- 
Total equity and liabilities                                     604,475    599,939 
                                                             -----------  --------- 
 

ADDITIONAL FINANCIAL INFORMATION

   1.             Basis of presentation 

This release covers the results of Lloyds Bank plc (the Bank) together with its subsidiaries (the Group) for the three months ended 31 March 2021.

Accounting policies

The accounting policies are consistent with those applied by the Group in its 2020 Annual Report and Accounts.

   2.             Capital 

Capital and leverage ratios reported as at 31 March 2021 incorporate profits for the three months that remain subject to formal verification in accordance with the Capital Requirements Regulation. The Group's Q1 2021 Interim Pillar 3 Report can be found at: https://www.lloydsbankinggroup.com/investors/financial-downloads.html

   3.             UK economic assumptions 

Base case scenario by quarter

Key quarterly assumptions made by the Group are shown below. Gross domestic product is presented quarter on quarter, house price growth and commercial real estate growth is presented year on year.

 
                           First    Second     Third    Fourth     First    Second     Third      Fourth 
                         quarter   quarter   quarter   quarter   quarter   quarter   quarter     quarter 
                            2021      2021      2021      2021      2022      2022      2022        2022 
                               %         %         %         %         %         %         %           % 
 
Gross domestic product     (1.6)       3.7       1.5       1.2       1.4       0.9       0.5       0.4 
UK Bank Rate                0.10      0.10      0.10      0.10      0.10      0.10      0.10      0.10 
Unemployment rate            5.2       5.6       6.2       7.0       6.7       6.3       6.0       5.7 
House price growth           4.9       6.1       0.7     (0.8)     (0.8)     (1.1)     (0.4)       0.5 
Commercial real estate 
 price growth              (4.5)     (1.0)     (1.0)     (1.8)     (0.8)     (0.2)       1.2       1.9 
 

ADDITIONAL FINANCIAL INFORMATION (continued)

   3.             UK economic assumptions (continued) 

Scenarios by year

Key annual assumptions made by the Group are shown below. Gross domestic product is presented as an annual change, house price growth and commercial real estate price growth are presented as the growth in the respective indices within the period. UK Bank Rate and unemployment rate are averages for the period.

 
                           2021    2022    2023   2024   2025    2021-2025 
At 31 March 2021              %       %       %      %      %            % 
 
Upside 
Gross domestic product      5.7     4.6     1.4    1.3    1.2        2.8 
UK Bank Rate               0.81    1.19    0.98   1.20   1.43       1.12 
Unemployment rate           4.9     4.9     4.4    4.2    4.1        4.5 
House price growth          0.8     4.0     6.0    4.3    3.6        3.7 
Commercial real estate 
 price growth               9.3     4.8     2.3  (0.4)  (0.4)        3.1 
 
Base case 
Gross domestic product      5.0     5.0     1.6    1.3    1.3        2.8 
UK Bank Rate               0.10    0.10    0.21   0.44   0.69       0.31 
Unemployment rate           6.0     6.2     5.4    5.0    4.8        5.5 
House price growth        (0.8)     0.5     2.2    1.7    1.7        1.1 
Commercial real estate 
 price growth             (1.8)     1.9     1.5    0.8    0.6        0.6 
 
Downside 
Gross domestic product      4.5     4.2     1.4    1.1    1.3        2.5 
UK Bank Rate               0.12    0.12    0.09   0.17   0.33       0.17 
Unemployment rate           6.9     7.7     6.9    6.3    5.9        6.8 
House price growth        (4.1)   (6.9)   (5.2)  (3.9)  (2.2)      (4.5) 
Commercial real estate 
 price growth             (9.0)   (4.0)   (0.6)    0.0    0.9      (2.6) 
 
Severe downside 
Gross domestic product      2.8     3.4     1.1    1.3    1.4        2.0 
UK Bank Rate               0.03    0.01    0.02   0.03   0.05       0.03 
Unemployment rate           8.4    10.0     9.0    8.1    7.4        8.6 
House price growth        (5.9)  (11.7)  (10.7)  (7.9)  (4.1)      (8.1) 
Commercial real estate 
 price growth            (19.8)  (11.3)   (4.7)  (1.0)    1.1      (7.5) 
 

ADDITIONAL FINANCIAL INFORMATION (continued)

   3.             UK economic assumptions (continued) 
 
                           2020    2021    2022    2023   2024    2020-2024 
At 31 December 2020           %       %       %       %      %            % 
 
Upside 
Gross domestic product   (10.5)     3.7     5.7     1.7    1.5        0.3 
UK Bank Rate               0.10    1.14    1.27    1.20   1.21       0.98 
Unemployment rate           4.3     5.4     5.4     5.0    4.5        5.0 
House price growth          6.3   (1.4)     5.2     6.0    5.0        4.2 
Commercial real estate 
 price growth             (4.6)     9.3     3.9     2.1    0.3        2.1 
 
Base case 
Gross domestic product   (10.5)     3.0     6.0     1.7    1.4        0.1 
UK Bank Rate               0.10    0.10    0.10    0.21   0.25       0.15 
Unemployment rate           4.5     6.8     6.8     6.1    5.5        5.9 
House price growth          5.9   (3.8)     0.5     1.5    1.5        1.1 
Commercial real estate 
 price growth             (7.0)   (1.7)     1.6     1.1    0.6      (1.1) 
 
Downside 
Gross domestic product   (10.6)     1.7     5.1     1.4    1.4      (0.4) 
UK Bank Rate               0.10    0.06    0.02    0.02   0.03       0.05 
Unemployment rate           4.6     7.9     8.4     7.8    7.0        7.1 
House price growth          5.6   (8.4)   (6.5)   (4.7)  (3.0)      (3.5) 
Commercial real estate 
 price growth             (8.7)  (10.6)   (3.2)   (0.8)  (0.8)      (4.9) 
 
Severe downside 
Gross domestic product   (10.8)     0.3     4.8     1.3    1.2      (0.8) 
UK Bank Rate               0.10    0.00    0.00    0.01   0.01       0.02 
Unemployment rate           4.8     9.9    10.7     9.8    8.7        8.8 
House price growth          5.3  (11.1)  (12.5)  (10.7)  (7.6)      (7.5) 
Commercial real estate 
 price growth            (11.0)  (21.4)   (9.8)   (3.9)  (0.8)      (9.7) 
 

ADDITIONAL FINANCIAL INFORMATION (continued)

   4.             Group loans and advances to customers and expected credit loss allowances 
 
                                    Stage    Stage    Stage 
                                        1        2        3    POCI    Total 
                                                                               Stage     Stage 
                                                                                   2         3 
                                                                                as %      as % 
                                                                                  of        of 
At 31 March 2021                     GBPm     GBPm     GBPm    GBPm     GBPm   total     total 
 
Loans and advances to customers 
  UK Mortgages                    258,215   27,863    1,880  12,219  300,177     9.3     0.6 
  Credit cards                     10,663    3,198      354       -   14,215    22.5     2.5 
  Loans and overdrafts              7,652    1,439      324       -    9,415    15.3     3.4 
  UK Motor Finance                 12,947    2,256      232       -   15,435    14.6     1.5 
  Other                            18,170    1,218      182       -   19,570     6.2     0.9 
                                  -------  -------  -------  ------  -------  ------  ------ 
Retail                            307,647   35,974    2,972  12,219  358,812    10.0     0.8 
                                  -------  -------  -------  ------  -------  ------  ------ 
  SME                              28,063    3,322      860       -   32,245    10.3     2.7 
  Other                            32,269    6,230    2,488       -   40,987    15.2     6.1 
                                  -------  -------  -------  ------  -------  ------  ------ 
Commercial Banking                 60,332    9,552    3,348       -   73,232    13.0     4.6 
Central items(1)                   51,388       33       59       -   51,480     0.1     0.1 
                                  -------  -------  -------  ------  -------  ------  ------ 
Total gross lending               419,367   45,559    6,379  12,219  483,524     9.4     1.3 
                                                                              ------  ------ 
ECL allowance on drawn 
 balances                         (1,240)  (1,853)  (1,847)   (234)  (5,174) 
                                  -------  -------  -------  ------  ------- 
Net balance sheet carrying 
 value                            418,127   43,706    4,532  11,985  478,350 
                                  -------  -------  -------  ------  ------- 
 
Group ECL allowance (drawn and 
 undrawn) 
  UK Mortgages                         97      451      188     235      971    46.4    19.4 
  Credit cards                        185      516      165       -      866    59.6    19.1 
  Loans and overdrafts                210      334      163       -      707    47.2    23.1 
  UK Motor Finance(2)                 177      171      155       -      503    34.0    30.8 
  Other                                51      117       53       -      221    52.9    24.0 
                                  -------  -------  -------  ------  -------  ------  ------ 
Retail                                720    1,589      724     235    3,268    48.6    22.2 
                                  -------  -------  -------  ------  -------  ------  ------ 
  SME                                 130      162      123       -      415    39.0    29.6 
  Other                               150      299      997       -    1,446    20.7    68.9 
                                  -------  -------  -------  ------  -------  ------  ------ 
Commercial Banking                    280      461    1,120       -    1,861    24.8    60.2 
Other                                 411        1       10       -      422     0.2     2.4 
                                  -------  -------  -------  ------  -------  ------  ------ 
Total ECL allowance (drawn 
 and undrawn)                       1,411    2,051    1,854     235    5,551    36.9    33.4 
                                  -------  -------  -------  ------  -------  ------  ------ 
 
Group ECL allowances (drawn 
 and undrawn) as a percentage 
 of loans and advances to customers(3) 
  UK Mortgages                          -      1.6     10.0     1.9      0.3 
  Credit cards                        1.7     16.1     56.9       -      6.1 
  Loans and overdrafts                2.7     23.2     64.7       -      7.6 
  UK Motor Finance                    1.4      7.6     66.8       -      3.3 
  Other                               0.3      9.6     40.2       -      1.1 
                                  -------  -------  -------  ------  ------- 
Retail                                0.2      4.4     26.0     1.9      0.9 
                                  -------  -------  -------  ------  ------- 
  SME                                 0.5      4.9     16.8       -      1.3 
  Other                               0.5      4.8     40.2       -      3.5 
                                  -------  -------  -------  ------  ------- 
Commercial Banking                    0.5      4.8     34.9       -      2.5 
Other                                 0.8      3.0     16.9       -      0.8 
                                  -------  -------  -------  ------  ------- 
Total ECL allowances (drawn 
 and undrawn) as a percentage 
 of loans and advances to 
 customers                            0.3      4.5     30.6     1.9      1.1 
                                  -------  -------  -------  ------  ------- 
 

(1) Includes reverse repos of GBP52.8 billion.

(2) UK Motor Finance for Stages 1 and 2 include GBP168 million relating to provisions against residual values of vehicles subject to finance leasing agreements. These provisions are included within the calculation of coverage ratios.

(3) Total and Stage 3 ECL allowances as a percentage of drawn balances exclude loans in recoveries in Retail of GBP186 million, and in Commercial Banking of GBP135 million.

ADDITIONAL FINANCIAL INFORMATION (continued)

(4.) Group loans and advances to customers and expected credit loss allowances (continued)

 
                                    Stage    Stage    Stage 
                                        1        2        3    POCI    Total 
                                                                               Stage     Stage 
                                                                                   2         3 
                                                                                as %      as % 
                                                                                  of        of 
At 31 December 2020                  GBPm     GBPm     GBPm    GBPm     GBPm   total     total 
 
Loans and advances to customers 
  UK Mortgages                    251,418   29,018    1,859  12,511  294,806     9.8     0.6 
  Credit cards                     11,496    3,273      340       -   15,109    21.7     2.3 
  Loans and overdrafts              7,710    1,519      307       -    9,536    15.9     3.2 
  UK Motor Finance                 12,786    2,216      199       -   15,201    14.6     1.3 
  Other                            17,879    1,304      184       -   19,367     6.7     1.0 
                                  -------  -------  -------  ------  -------  ------  ------ 
Retail                            301,289   37,330    2,889  12,511  354,019    10.5     0.8 
                                  -------  -------  -------  ------  -------  ------  ------ 
  SME                              27,015    4,500      791       -   32,306    13.9     2.4 
  Other                            29,882    9,438    2,694       -   42,014    22.5     6.4 
                                  -------  -------  -------  ------  -------  ------  ------ 
Commercial Banking                 56,897   13,938    3,485       -   74,320    18.8     4.7 
Central items(1)                   57,422       12       69       -   57,503       -     0.1 
                                  -------  -------  -------  ------  -------  ------  ------ 
Total gross lending               415,608   51,280    6,443  12,511  485,842    10.6     1.3 
                                                                              ------  ------ 
ECL allowance on drawn 
 balances                         (1,347)  (2,125)  (1,968)   (261)  (5,701) 
                                  -------  -------  -------  ------  ------- 
Net balance sheet carrying 
 value                            414,261   49,155    4,475  12,250  480,141 
                                  -------  -------  -------  ------  ------- 
 
Group ECL allowance (drawn and 
 undrawn) 
  UK Mortgages                        107      468      191     261    1,027    45.6    18.6 
  Credit cards                        240      530      153       -      923    57.4    16.6 
  Loans and overdrafts                224      344      147       -      715    48.1    20.6 
  UK Motor Finance(2)                 197      171      133       -      501    34.1    26.5 
  Other                                46      124       59       -      229    54.1    25.8 
                                  -------  -------  -------  ------  -------  ------  ------ 
Retail                                814    1,637      683     261    3,395    48.2    20.1 
                                  -------  -------  -------  ------  -------  ------  ------ 
  SME                                 142      234      126       -      502    46.6    25.1 
  Other                               172      475    1,161       -    1,808    26.3    64.2 
                                  -------  -------  -------  ------  -------  ------  ------ 
Commercial Banking                    314      709    1,287       -    2,310    30.7    55.7 
Central items                         410        -       12       -      422       -     2.8 
                                  -------  -------  -------  ------  -------  ------  ------ 
Total ECL allowance (drawn 
 and undrawn)                       1,538    2,346    1,982     261    6,127    38.3    32.3 
                                  -------  -------  -------  ------  -------  ------  ------ 
 
Group ECL allowances (drawn and 
 undrawn) as a percentage of loans 
 and advances to customers(3) 
  UK Mortgages                          -      1.6     10.3     2.1      0.3 
  Credit cards                        2.1     16.2     56.0       -      6.1 
  Loans and overdrafts                2.9     22.6     64.2       -      7.6 
  UK Motor Finance                    1.5      7.7     66.8       -      3.3 
  Other                               0.3      9.5     39.3       -      1.2 
                                  -------  -------  -------  ------  ------- 
Retail                                0.3      4.4     25.2     2.1      1.0 
                                  -------  -------  -------  ------  ------- 
  SME                                 0.5      5.2     19.1       -      1.6 
  Other                               0.6      5.0     43.2       -      4.3 
                                  -------  -------  -------  ------  ------- 
Commercial Banking                    0.6      5.1     38.5       -      3.1 
Central items                         0.7        -     17.4       -      0.7 
                                  -------  -------  -------  ------  ------- 
Total ECL allowances (drawn 
 and undrawn) as a percentage 
 of loans and advances to 
 customers                            0.4      4.6     32.4     2.1      1.3 
                                  -------  -------  -------  ------  ------- 
 

(1) Includes reverse repos of GBP58.6 billion.

(2) UK Motor Finance for Stages 1 and 2 include GBP192 million relating to provisions against residual values of vehicles subject to finance leasing agreements. These provisions are included within the calculation of coverage ratios.

(3) Total and Stage 3 ECL allowances as a percentage of drawn balances exclude loans in recoveries in Retail of GBP179 million, and in Commercial Banking of GBP138 million.

ADDITIONAL FINANCIAL INFORMATION (continued)

   5.             Group Stage 2 loans and advances to customers 
 
                          Up to date 
               -------------------------------- 
                                                    1-30 days      Over 30 days 
                PD movements       Other(1)        past due(2)        past due           Total 
               --------------- 
                 Gross            Gross            Gross            Gross            Gross 
               lending  ECL(3)  lending  ECL(3)  lending  ECL(3)  lending  ECL(3)  lending    ECL(3) 
                  GBPm    GBPm     GBPm    GBPm     GBPm    GBPm     GBPm    GBPm     GBPm      GBPm 
 
At 31 March 
 2021 
  UK 
   Mortgages    20,920     199    3,220     127    1,856      44    1,867      81   27,863     451 
  Credit 
   cards         2,905     404      190      74       75      23       28      15    3,198     516 
  Loans and 
   overdrafts      904     202      366      63      131      49       38      20    1,439     334 
  UK Motor 
   Finance         765      62    1,324      55      128      36       39      18    2,256     171 
  Other            473      67      589      34       69       9       87       7    1,218     117 
               -------  ------  -------  ------  -------  ------  -------  ------  -------  ------ 
Retail          25,967     934    5,689     353    2,259     161    2,059     141   35,974   1,589 
               -------  ------  -------  ------  -------  ------  -------  ------  -------  ------ 
  SME            3,026     148      208       8       35       3       53       3    3,322     162 
  Other          5,996     293       77       3       44       3      113       -    6,230     299 
               -------  ------  -------  ------  -------  ------  -------  ------  -------  ------ 
Commercial 
 Banking         9,022     441      285      11       79       6      166       3    9,552     461 
Central items       19       -       11       1        2       -        1       -       33       1 
               -------  ------  -------  ------  -------  ------  -------  ------  -------  ------ 
Total           35,008   1,375    5,985     365    2,340     167    2,226     144   45,559   2,051 
               -------  ------  -------  ------  -------  ------  -------  ------  -------  ------ 
 
At 31 
December 
2020 
  UK 
   Mortgages    22,569     215    3,078     131    1,648      43    1,723      79   29,018     468 
  Credit 
   cards         2,924     408      220      76       93      27       36      19    3,273     530 
  Loans and 
   overdrafts      959     209      388      68      126      45       46      22    1,519     344 
  UK Motor 
   Finance         724      62    1,321      55      132      37       39      17    2,216     171 
  Other            512      56      651      44       69      14       72      10    1,304     124 
               -------  ------  -------  ------  -------  ------  -------  ------  -------  ------ 
Retail          27,688     950    5,658     374    2,068     166    1,916     147   37,330   1,637 
               -------  ------  -------  ------  -------  ------  -------  ------  -------  ------ 
  SME            4,229     219      150       6       40       5       81       4    4,500     234 
  Other          9,151     469       83       3       28       2      176       1    9,438     475 
               -------  ------  -------  ------  -------  ------  -------  ------  -------  ------ 
Commercial 
 Banking        13,380     688      233       9       68       7      257       5   13,938     709 
Central items        1       -       11       -        -       -        -       -       12       - 
               -------  ------  -------  ------  -------  ------  -------  ------  -------  ------ 
Total           41,069   1,638    5,902     383    2,136     173    2,173     152   51,280   2,346 
               -------  ------  -------  ------  -------  ------  -------  ------  -------  ------ 
 

(1) Includes forbearance, client and product-specific indicators not reflected within quantitative PD assessments.

(2) Includes assets that have triggered PD movements, or other rules, given that being 1-29 days in arrears in and of itself is not a Stage 2 trigger.

(3) Expected credit loss allowances on loans and advances to customers (drawn and undrawn).

ADDITIONAL FINANCIAL INFORMATION (continued)

   6.             Commercial Banking lending in key coronavirus-impacted sectors(1) 
 
                          At 31 March 2021                     At 31 December 2020 
                 -----------------------------------  -------------------------------------- 
                                                                                       Drawn 
                                               Drawn                                    as a 
                                              as a %                                    % of 
                                            of Group                                   Group 
                                     Drawn     loans                       Drawn       loans 
                                       and       and                         and         and 
                  Drawn  Undrawn   undrawn  advances    Drawn  Undrawn   undrawn    advances 
                  GBPbn    GBPbn     GBPbn         %    GBPbn    GBPbn     GBPbn           % 
 
Retail non-food     2.1      1.5       3.6       0.4      2.1      1.5       3.6       0.4 
Automotive 
 dealerships(2)     2.0      1.6       3.6       0.4      1.7      2.0       3.7       0.4 
Oil and gas         1.0      2.1       3.1       0.2      1.1      2.5       3.6       0.2 
Construction        0.7      1.5       2.2       0.1      0.8      1.6       2.4       0.2 
Passenger 
 transport          1.4      0.8       2.2       0.3      1.1      1.0       2.1       0.2 
Hotels              1.6      0.3       1.9       0.4      1.8      0.3       2.1       0.4 
Leisure             0.5      0.7       1.2       0.1      0.6      0.7       1.3       0.1 
Restaurants 
 and bars           0.6      0.3       0.9       0.1      0.6      0.3       0.9       0.1 
                 ------  -------  --------            -------  -------  -------- 
Total               9.9      8.8      18.7       2.0      9.8      9.9      19.7       2.0 
                 ------  -------  --------            -------  -------  -------- 
 

(1) Lending classified using ONS Standard Industrial Classification codes at legal entity level; drawn balances exclude c.GBP1 billion lending under the Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan Scheme.

(2) Automotive dealerships includes Black Horse Motor Wholesale lending (within Retail).

   7.             Support measures 

Retail payment holiday characteristics(1)

 
                                  Mortgages       Cards        Loans        Motor         Total 
                                 ------------  -----------  -----------  -----------  -------------- 
                                  000s  GBPbn  000s  GBPbn  000s  GBPbn  000s  GBPbn   000s    GBPbn 
 
Total payment holidays granted     491   61.6   341    1.7   304    2.4   161    2.2  1,297   68.0 
First payment holiday still 
 in force                            6    0.9    10    0.0     7    0.1     5    0.1     29    1.1 
Matured payment holidays 
 - repaying                        443   55.4   282    1.4   259    2.1   139    1.8  1,123   60.7 
Matured payment holidays 
 - extended                         15    2.0     9    0.0    14    0.1     6    0.1     43    2.3 
Matured payment holidays 
 - missed payment                   27    3.3    41    0.2    24    0.2    11    0.2    103    3.9 
 
As a percentage of total 
 matured 
Matured payment holidays 
 - repaying                        91%    91%   85%    85%   87%    87%   89%    86%    89%      91% 
Matured payment holidays 
 - extended                         3%     3%    3%     3%    5%     5%    4%     5%     3%       3% 
Matured payment holidays 
 - missed payment                   6%     5%   12%    12%    8%     8%    7%     9%     8%       6% 
 

(1.) Data as at 31 March 2021. Analysis of mortgage payment holidays excludes St James Place, Intelligent Finance and Tesco; motor finance payment holidays excludes Lex Autolease. Total payment holidays granted are equal to the sum of first payment holiday still in force and matured payment holidays. Charged-off balances are included within missed payments. Totals and percentages are calculated using unrounded numbers.

Government-backed loan scheme approvals and value(1)

 
                                                       000s  GBPbn 
 
Coronavirus Business Interruption Loan Scheme          10.5    2.5 
Bounce Back Loan Scheme                               343.3    9.7 
Coronavirus Large Business Interruption Loan Scheme     0.1    0.7 
                                                      -----  ----- 
Total                                                 353.9   12.9 
                                                      -----  ----- 
 

(1) Data as at 2 April 2021.

FORWARD LOOKING STATEMENTS

This document contains certain forward looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and section 27A of the US Securities Act of 1933, as amended, with respect to the business, strategy, plans and/or results of Lloyds Bank plc together with its subsidiaries (the Lloyds Bank Group) and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical or current facts, including statements about the Lloyds Bank Group's or its directors' and/or management's beliefs and expectations, are forward looking statements. Words such as 'believes', 'achieves', 'anticipates', 'estimates', 'expects', 'targets', 'should', 'intends', 'aims', 'projects', 'plans', 'potential', 'will', 'would', 'could', 'considered', 'likely', 'may', 'seek', 'estimate' and variations of these words and similar future or conditional expressions are intended to identify forward looking statements but are not the exclusive means of identifying such statements. Examples of such forward looking statements include, but are not limited to, statements or guidance relating to: projections or expectations of the Lloyds Bank Group's future financial position including profit attributable to shareholders, provisions, economic profit, dividends, capital structure, portfolios, net interest margin, capital ratios, liquidity, risk-weighted assets (RWAs), expenditures or any other financial items or ratios; litigation, regulatory and governmental investigations; the Lloyds Bank Group's future financial performance; the level and extent of future impairments and write-downs; statements of plans, objectives or goals of the Lloyds Bank Group or its management including in respect of statements about the future business and economic environments in the UK and elsewhere including, but not limited to, future trends in interest rates, foreign exchange rates, credit and equity market levels and demographic developments; statements about competition, regulation, disposals and consolidation or technological developments in the financial services industry; and statements of assumptions underlying such statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future. Factors that could cause actual business, strategy, plans and/or results (including but not limited to the payment of dividends) to differ materially from forward looking statements made by the Lloyds Bank Group or on its behalf include, but are not limited to: general economic and business conditions in the UK and internationally; market related trends and developments; fluctuations in interest rates, inflation, exchange rates, stock markets and currencies; any impact of the transition from IBORs to alternative reference rates; the ability to access sufficient sources of capital, liquidity and funding when required; changes to the Lloyds Bank Group's or Lloyds Banking Group plc's credit ratings; the ability to derive cost savings and other benefits including, but without limitation, as a result of any acquisitions, disposals and other strategic transactions; potential changes in dividend policy; the ability to achieve strategic objectives; the Lloyds Bank Group's ESG targets and/or commitments; changing customer behaviour including consumer spending, saving and borrowing habits; changes to borrower or counterparty credit quality impacting the recoverability and value of balance sheet assets; concentration of financial exposure; management and monitoring of conduct risk; exposure to counterparty risk (including but not limited to third parties conducting illegal activities without the Lloyds Bank Group's knowledge); instability in the global financial markets, including Eurozone instability, instability as a result of uncertainty surrounding the exit by the UK from the European Union (EU) and the EU-UK Trade and Cooperation Agreement, instability as a result of the potential for other countries to exit the EU or the Eurozone, and the impact of any sovereign credit rating downgrade or other sovereign financial issues; political instability including as a result of any UK general election and any further possible referendum on Scottish independence; technological changes and risks to the security of IT and operational infrastructure, systems, data and information resulting from increased threat of cyber and other attacks; natural, pandemic (including but not limited to the COVID-19 pandemic) and other disasters, adverse weather and similar contingencies outside the Lloyds Bank Group's or Lloyds Banking Group plc's control; inadequate or failed internal or external processes or systems; acts of war, other acts of hostility, terrorist acts and responses to those acts, or other such events; geopolitical unpredictability; risks relating to sustainability and climate change, including the Lloyds Bank Group's or Lloyds Banking Group plc's ability along with the government and other stakeholders to manage and mitigate the impacts of climate change effectively; changes in laws, regulations, practices and accounting standards or taxation, including as a result of the UK's exit from the EU; changes to regulatory capital or liquidity requirements (including regulatory measures to restrict distributions to address potential capital and liquidity stress) and similar contingencies outside the Lloyds Bank Group's or Lloyds Banking Group plc's control; the policies, decisions and actions of governmental or regulatory authorities or courts in the UK, the EU, the US or elsewhere including the implementation and interpretation of key laws, legislation and regulation together with any resulting impact on the future structure of the Lloyds Bank Group; the ability to attract and retain senior management and other employees and meet its diversity objectives; actions or omissions by the Lloyds Bank Group's directors, management or employees including industrial action; changes in Lloyds Bank Group's ability to develop sustainable finance products and Lloyds Bank Group's capacity to measure the climate impact from its financing activity, which may affect Lloyds Bank Group's ability to achieve its climate ambition; changes to the Lloyds Bank Group's post-retirement defined benefit scheme obligations; the extent of any future impairment charges or write-downs caused by, but not limited to, depressed asset valuations, market disruptions and illiquid markets; the value and effectiveness of any credit protection purchased by the Lloyds Bank Group; the inability to hedge certain risks economically; the adequacy of loss reserves; the actions of competitors, including non-bank financial services, lending companies and digital innovators and disruptive technologies; and exposure to regulatory or competition scrutiny, legal, regulatory or competition proceedings, investigations or complaints. Please refer to the latest Annual Report on Form 20-F filed by Lloyds Bank plc with the US Securities and Exchange Commission (the SEC), which is available on the SEC's website at www.sec.gov, for a discussion of certain factors and risks. Lloyds Bank plc may also make or disclose written and/or oral forward looking statements in reports filed with or furnished to the SEC, Lloyds Bank plc annual reviews, half-year announcements, proxy statements, offering circulars, prospectuses, press releases and other written materials and in oral statements made by the directors, officers or employees of Lloyds Bank plc to third parties, including financial analysts. Except as required by any applicable law or regulation, the forward looking statements contained in this document are made as of today's date, and the Lloyds Bank Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this document to reflect any change in the Lloyds Bank Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The information, statements and opinions contained in this document do not constitute a public offer under any applicable law or an offer to sell any securities or financial instruments or any advice or recommendation with respect to such securities or financial instruments.

CONTACTS

For further information please contact:

INVESTORS AND ANALYSTS

Douglas Radcliffe

Group Investor Relations Director

020 7356 1571

douglas.radcliffe@lloydsbanking.com

Edward Sands

Director of Investor Relations

020 7356 1585

edward.sands@lloydsbanking.com

Eileen Khoo

Director of Investor Relations

07385 376435

eileen.khoo@lloydsbanking.com

Nora Thoden

Director of Investor Relations - ESG

020 7356 2334

nora.thoden@lloydsbanking.com

CORPORATE AFFAIRS

Grant Ringshaw

External Relations Director

020 7356 2362

grant.ringshaw@lloydsbanking.com

Matt Smith

Head of Media Relations

020 7356 3522

matt.smith@lloydsbanking.com

Copies of this interim management statement may be obtained from:

Investor Relations, Lloyds Banking Group plc, 25 Gresham Street, London EC2V 7HN

The statement can also be found on the Group's website - www.lloydsbankinggroup.com

Registered office: Lloyds Bank plc, 25 Gresham Street, London EC2V 7HN

Registered in England No. 2065

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