SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
01 May
2025
LLOYDS BANKING GROUP plc
(Translation
of registrant's name into English)
5th Floor
25 Gresham Street
London
EC2V 7HN
United Kingdom
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover Form 20-F or Form 40-F.
Form
20-F..X.. Form 40-F
Index
to Exhibits
Item
No.
1 Regulatory News Service Announcement, 01 May 2025
re: 2025
Q1 Interim Management Statement
Lloyds Banking Group plc
Q1 2025 Results
Interim management statement
1 May 2025
“In the first quarter of 2025, the Group delivered sustained
strength in financial performance. In particular, net income
continues to grow, following the upward trajectory established in
the second half of last year. We maintained our cost discipline and asset quality
remains resilient.
We continue to make good progress on our strategic transformation
and deliver innovative ways for our customers to manage their
financial needs and achieve their financial aspirations, in line
with our purpose of Helping Britain Prosper. This supports our
ambition of higher, more sustainable returns that will underpin
delivery for all of our stakeholders. Our differentiated business
model stands out in the context of recent market volatility and
economic uncertainty and helps support UK households and businesses
as they further strengthen their financial resilience. Underpinned
by our financial performance, strategic execution and franchise
strength, we remain confident in the outlook for Lloyds Banking
Group and in our 2025 and 2026 guidance.”
Charlie Nunn, Group Chief Executive
Sustained strength in financial performance1
●
Statutory
profit after tax of £1.1 billion (three months to 31 March
2024: £1.2 billion) with net income up 4% and reduced
volatility more than offset by higher operating costs and a higher
impairment charge. Robust return on tangible equity of 12.6% (three
months to 31 March 2024: 13.3%)
●
Underlying
net interest income of £3.3 billion, up 3% year on year and up
1% versus the fourth quarter of 2024. This reflected a banking net
interest margin of 3.03%, up 8 basis points year on
year (up 6 basis points compared to the fourth quarter of 2024),
alongside higher average interest-earning banking assets of
£455.5 billion
●
Underlying
other income of £1.5 billion, 8% higher than the prior year
and 1% higher than the fourth quarter of 2024, driven across
businesses by strengthening customer activity and the benefit of
strategic initiatives
●
Operating
lease depreciation of £355 million, higher than the £283
million in the first quarter of 2024 as a result of fleet
growth, the depreciation of higher value vehicles and declines
in used electric car prices over 2024
●
Operating
costs of £2.6 billion, up 6%, combining inflationary
pressures, timing of strategic investment including planned higher
severance front-loaded into the first quarter of 2025 and business
growth costs, partly offset by cost savings and continued cost
discipline
●
Resilient
asset quality with underlying impairment charge of £309
million and an asset quality ratio of 27 basis points. Excluding
the impact of updates to the economic outlook, the asset quality
ratio was 24 basis points. The portfolio remains well-positioned
with stable and benign credit performance in the
quarter
●
Strong
growth in lending and deposits. Underlying loans and advances to
customers increased by £7.1 billion in the quarter to
£466.2 billion, led by UK mortgages growth of £4.8
billion. Customer deposits increased in the quarter by £5.0
billion to £487.7 billion, with £2.7 billion
growth in Retail and £2.3 billion in Commercial
Banking
●
Risk-weighted
assets of £230.1 billion, up £5.5 billion in the
quarter, reflecting strong lending growth and a temporary
c.£2.5 billion increase primarily due to hedging activity
expected to reverse by the third quarter
●
Capital
generation of 27 basis points; strong underlying banking build,
impacted by front-loaded severance and temporary risk-weighted
asset impacts primarily from hedging activity. CET1 ratio of
13.5%
●
Tangible
net assets per share of 54.4 pence, up by 2.0 pence in the quarter
from attributable profit alongside unwind of the cash flow hedge
reserve
2025 guidance reaffirmed
Based on our current macroeconomic assumptions, for 2025 the Group
continues to expect:
●
Underlying
net interest income of c.£13.5 billion
●
Operating
costs of c.£9.7 billion
●
Asset
quality ratio of c.25 basis points
●
Return
on tangible equity of c.13.5%
●
Capital generation of c.175 basis
points2
1 See
the basis of presentation on page 1.
2 Excluding
capital distributions. Inclusive of ordinary dividends received
from the Insurance business in February of the following
year.
|
|
Three months ended 31 Mar 2025£m
|
|
|
Three months ended
31 Mar 2024
£m
|
|
|
Change
%
|
|
Three months ended
31 Dec 2024
£m
|
|
|
Change
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying net interest income
|
3,294
|
|
|
3,184
|
|
|
3
|
|
3,276
|
|
|
1
|
|
Underlying other income
|
1,452
|
|
|
1,340
|
|
|
8
|
|
1,433
|
|
|
1
|
|
Operating lease depreciation
|
(355)
|
|
|
(283)
|
|
|
(25)
|
|
(331)
|
|
|
(7)
|
|
Net income
|
4,391
|
|
|
4,241
|
|
|
4
|
|
4,378
|
|
|
|
|
Operating costs
|
(2,550)
|
|
|
(2,402)
|
|
|
(6)
|
|
(2,450)
|
|
|
(4)
|
|
Remediation
|
–
|
|
|
(25)
|
|
|
|
|
(775)
|
|
|
|
|
Total costs
|
(2,550)
|
|
|
(2,427)
|
|
|
(5)
|
|
(3,225)
|
|
|
21
|
|
Underlying profit before impairment
|
1,841
|
|
|
1,814
|
|
|
1
|
|
1,153
|
|
|
60
|
|
Underlying impairment charge
|
(309)
|
|
|
(57)
|
|
|
|
|
(160)
|
|
|
(93)
|
|
Underlying profit
|
1,532
|
|
|
1,757
|
|
|
(13)
|
|
993
|
|
|
54
|
|
Restructuring
|
(4)
|
|
|
(12)
|
|
|
67
|
|
(19)
|
|
|
79
|
|
Volatility and other items
|
(11)
|
|
|
(117)
|
|
|
91
|
|
(150)
|
|
|
93
|
|
Statutory profit before tax
|
1,517
|
|
|
1,628
|
|
|
(7)
|
|
824
|
|
|
84
|
|
Tax expense
|
(383)
|
|
|
(413)
|
|
|
7
|
|
(124)
|
|
|
|
|
Statutory profit after tax
|
1,134
|
|
|
1,215
|
|
|
(7)
|
|
700
|
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
1.7p
|
|
|
1.7p
|
|
|
|
|
1.0p
|
|
|
0.7p
|
|
Banking net interest marginA
|
3.03%
|
|
|
2.95%
|
|
|
8bp
|
|
2.97%
|
|
|
6bp
|
|
Average interest-earning banking assetsA
|
£455.5bn
|
|
|
£449.1bn
|
|
|
1
|
|
£455.1bn
|
|
|
|
|
Cost:income ratioA
|
58.1%
|
|
|
57.2%
|
|
|
0.9pp
|
|
73.7%
|
|
|
(15.6)pp
|
|
Asset quality ratioA
|
0.27%
|
|
|
0.06%
|
|
|
21bp
|
|
0.14%
|
|
|
13bp
|
|
Return on tangible equityA
|
12.6%
|
|
|
13.3%
|
|
|
(0.7)pp
|
|
7.1%
|
|
|
5.5pp
|
|
|
At 31 Mar
2025
|
|
|
At 31 Mar
2024
|
|
|
Change
%
|
|
At 31 Dec
2024
|
|
|
Change
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying loans and advances to customersA
|
£466.2bn
|
|
|
£448.5bn
|
|
|
4
|
|
£459.1bn
|
|
|
2
|
|
Customer deposits
|
£487.7bn
|
|
|
£469.2bn
|
|
|
4
|
|
£482.7bn
|
|
|
1
|
|
Loan to deposit ratioA
|
96%
|
|
|
96%
|
|
|
|
|
95%
|
|
|
1pp
|
|
CET1 ratio
|
13.5%
|
|
|
13.9%
|
|
|
(0.4)pp
|
|
14.2%
|
|
|
(0.7)pp
|
|
Pro forma CET1 ratioA,1
|
13.5%
|
|
|
13.9%
|
|
|
(0.4)pp
|
|
13.5%
|
|
|
|
|
Total capital ratio
|
18.4%
|
|
|
19.0%
|
|
|
(0.6)pp
|
|
19.0%
|
|
|
(0.6)pp
|
|
MREL ratio
|
30.4%
|
|
|
32.0%
|
|
|
(1.6)pp
|
|
32.2%
|
|
|
(1.8)pp
|
|
UK leverage ratio
|
5.5%
|
|
|
5.6%
|
|
|
(0.1)pp
|
|
5.5%
|
|
|
|
|
Risk-weighted assets
|
£230.1bn
|
|
|
£222.8bn
|
|
|
3
|
|
£224.6bn
|
|
|
2
|
|
Wholesale funding2
|
£89.4bn
|
|
|
£99.9bn
|
|
|
(11)
|
|
£92.5bn
|
|
|
(3)
|
|
Liquidity coverage ratio3
|
145%
|
|
|
143%
|
|
|
2pp
|
|
146%
|
|
|
(1)pp
|
|
Net stable funding ratio4
|
128%
|
|
|
130%
|
|
|
(2)pp
|
|
129%
|
|
|
(1)pp
|
|
Tangible net assets per shareA
|
54.4p
|
|
|
51.2p
|
|
|
3.2p
|
|
52.4p
|
|
|
2.0p
|
A See
page 13.
1 31
December 2024 reflects both the full impact of the share buyback
announced in respect of 2024 and the ordinary dividend received
from the Insurance business in February 2025.
2 Excludes
balances relating to margins of £1.4 billion (31 December
2024: £2.8 billion, 31 March 2024: £2.2
billion).
3 The
liquidity coverage ratio is calculated as a simple average of
month-end observations over the previous 12
months.
4 The
net stable funding ratio is calculated as a simple average of
month-end observations over the previous four
quarter-ends.
QUARTERLY
INFORMATIONA
|
|
Quarter
ended
31 Mar
2025
£m
|
|
|
Quarter
ended
31 Dec
2024
£m
|
|
|
Quarter
ended
30 Sep
2024
£m
|
|
|
Quarter
ended
30 Jun
2024
£m
|
|
|
Quarter
ended
31 Mar
2024
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying net interest income
|
3,294
|
|
|
3,276
|
|
|
3,231
|
|
|
3,154
|
|
|
3,184
|
|
|
Underlying other income
|
1,452
|
|
|
1,433
|
|
|
1,430
|
|
|
1,394
|
|
|
1,340
|
|
|
Operating lease depreciation
|
(355)
|
|
|
(331)
|
|
|
(315)
|
|
|
(396)
|
|
|
(283)
|
|
|
Net income
|
4,391
|
|
|
4,378
|
|
|
4,346
|
|
|
4,152
|
|
|
4,241
|
|
|
Operating costs
|
(2,550)
|
|
|
(2,450)
|
|
|
(2,292)
|
|
|
(2,298)
|
|
|
(2,402)
|
|
|
Remediation
|
–
|
|
|
(775)
|
|
|
(29)
|
|
|
(70)
|
|
|
(25)
|
|
|
Total costs
|
(2,550)
|
|
|
(3,225)
|
|
|
(2,321)
|
|
|
(2,368)
|
|
|
(2,427)
|
|
|
Underlying profit before impairment
|
1,841
|
|
|
1,153
|
|
|
2,025
|
|
|
1,784
|
|
|
1,814
|
|
|
Underlying impairment charge
|
(309)
|
|
|
(160)
|
|
|
(172)
|
|
|
(44)
|
|
|
(57)
|
|
|
Underlying profit
|
1,532
|
|
|
993
|
|
|
1,853
|
|
|
1,740
|
|
|
1,757
|
|
|
Restructuring
|
(4)
|
|
|
(19)
|
|
|
(6)
|
|
|
(3)
|
|
|
(12)
|
|
|
Volatility and other items
|
(11)
|
|
|
(150)
|
|
|
(24)
|
|
|
(41)
|
|
|
(117)
|
|
|
Statutory profit before tax
|
1,517
|
|
|
824
|
|
|
1,823
|
|
|
1,696
|
|
|
1,628
|
|
|
Tax expense
|
(383)
|
|
|
(124)
|
|
|
(490)
|
|
|
(467)
|
|
|
(413)
|
|
|
Statutory profit after tax
|
1,134
|
|
|
700
|
|
|
1,333
|
|
|
1,229
|
|
|
1,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
1.7p
|
|
|
1.0p
|
|
|
1.9p
|
|
|
1.7p
|
|
|
1.7p
|
|
|
Banking net interest marginA
|
3.03%
|
|
|
2.97%
|
|
|
2.95%
|
|
|
2.93%
|
|
|
2.95%
|
|
|
Average interest-earning banking assetsA
|
£455.5bn
|
|
|
£455.1bn
|
|
|
£451.1bn
|
|
|
£449.4bn
|
|
|
£449.1bn
|
|
|
Cost:income ratioA
|
58.1%
|
|
|
73.7%
|
|
|
53.4%
|
|
|
57.0%
|
|
|
57.2%
|
|
|
Asset quality ratioA
|
0.27%
|
|
|
0.14%
|
|
|
0.15%
|
|
|
0.05%
|
|
|
0.06%
|
|
|
Return on tangible equityA
|
12.6%
|
|
|
7.1%
|
|
|
15.2%
|
|
|
13.6%
|
|
|
13.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
31 Mar 2025
|
|
|
At
31 Dec
2024
|
|
|
At
30 Sep 2024
|
|
|
At
30 Jun 2024
|
|
|
At
31 Mar 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying loans and advances to customersA,1
|
£466.2bn
|
|
|
£459.1bn
|
|
|
£457.0bn
|
|
|
£452.4bn
|
|
|
£448.5bn
|
|
|
Customer deposits
|
£487.7bn
|
|
|
£482.7bn
|
|
|
£475.7bn
|
|
|
£474.7bn
|
|
|
£469.2bn
|
|
|
Loan to deposit ratioA
|
96%
|
|
|
95%
|
|
|
96%
|
|
|
95%
|
|
|
96%
|
|
|
CET1 ratio
|
13.5%
|
|
|
14.2%
|
|
|
14.3%
|
|
|
14.1%
|
|
|
13.9%
|
|
|
Pro forma CET1 ratioA,2
|
13.5%
|
|
|
13.5%
|
|
|
14.3%
|
|
|
14.1%
|
|
|
13.9%
|
|
|
Total capital ratio
|
18.4%
|
|
|
19.0%
|
|
|
19.0%
|
|
|
18.7%
|
|
|
19.0%
|
|
|
MREL ratio
|
30.4%
|
|
|
32.2%
|
|
|
32.2%
|
|
|
31.7%
|
|
|
32.0%
|
|
|
UK leverage ratio
|
5.5%
|
|
|
5.5%
|
|
|
5.5%
|
|
|
5.4%
|
|
|
5.6%
|
|
|
Risk-weighted assets
|
£230.1bn
|
|
|
£224.6bn
|
|
|
£223.3bn
|
|
|
£222.0bn
|
|
|
£222.8bn
|
|
|
Wholesale funding
|
£89.4bn
|
|
|
£92.5bn
|
|
|
£93.3bn
|
|
|
£97.6bn
|
|
|
£99.9bn
|
|
|
Liquidity coverage ratio3
|
145%
|
|
|
146%
|
|
|
144%
|
|
|
144%
|
|
|
143%
|
|
|
Net stable funding ratio4
|
128%
|
|
|
129%
|
|
|
129%
|
|
|
130%
|
|
|
130%
|
|
|
Tangible net assets per shareA
|
54.4p
|
|
|
52.4p
|
|
|
52.5p
|
|
|
49.6p
|
|
|
51.2p
|
|
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.
2 31
December 2024 reflects both the full impact of the share buyback
announced in respect of 2024 and the ordinary dividend received
from the Insurance business in February 2025.
3 The
liquidity coverage ratio is calculated as a simple average of
month-end observations over the previous 12
months.
4 The
net stable funding ratio is calculated as a simple average of
month-end observations over the previous four
quarter-ends.
BALANCE SHEET ANALYSIS
|
|
At 31 Mar
2025
£bn
|
|
|
At 31 Mar
2024
£bn
|
|
|
Change
%
|
|
|
At 31 Dec
2024
£bn
|
|
|
Change
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UK mortgages1
|
317.1
|
|
|
304.6
|
|
|
4
|
|
|
312.3
|
|
|
2
|
|
Credit cards
|
15.9
|
|
|
15.2
|
|
|
5
|
|
|
15.7
|
|
|
1
|
|
UK Retail unsecured loans
|
9.5
|
|
|
7.6
|
|
|
25
|
|
|
9.1
|
|
|
4
|
|
UK Motor Finance2
|
15.8
|
|
|
15.8
|
|
|
|
|
|
15.3
|
|
|
3
|
|
Overdrafts
|
1.2
|
|
|
1.0
|
|
|
20
|
|
|
1.2
|
|
|
|
|
Retail other3
|
19.0
|
|
|
16.9
|
|
|
12
|
|
|
17.9
|
|
|
6
|
|
Business and Commercial Banking
|
29.4
|
|
|
32.2
|
|
|
(9)
|
|
|
29.7
|
|
|
(1)
|
|
Corporate and Institutional Banking
|
58.5
|
|
|
55.6
|
|
|
5
|
|
|
57.9
|
|
|
1
|
|
Central Items4
|
(0.2)
|
|
|
(0.4)
|
|
|
(50)
|
|
|
–
|
|
|
|
|
Underlying loans and advances to customersA
|
466.2
|
|
|
448.5
|
|
|
4
|
|
|
459.1
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail current accounts
|
102.5
|
|
|
103.1
|
|
|
(1)
|
|
|
101.3
|
|
|
1
|
|
Retail savings accounts
|
210.1
|
|
|
196.4
|
|
|
7
|
|
|
208.2
|
|
|
1
|
|
Wealth
|
9.8
|
|
|
10.2
|
|
|
(4)
|
|
|
10.2
|
|
|
(4)
|
|
Commercial Banking
|
164.9
|
|
|
159.3
|
|
|
4
|
|
|
162.6
|
|
|
1
|
|
Central Items
|
0.4
|
|
|
0.2
|
|
|
|
|
|
0.4
|
|
|
|
|
Customer deposits
|
487.7
|
|
|
469.2
|
|
|
4
|
|
|
482.7
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
909.9
|
|
|
889.6
|
|
|
2
|
|
|
906.7
|
|
|
|
|
Total liabilities
|
862.1
|
|
|
841.8
|
|
|
2
|
|
|
860.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shareholders’ equity
|
40.7
|
|
|
40.7
|
|
|
|
|
|
39.5
|
|
|
3
|
|
Other equity instruments
|
6.9
|
|
|
6.9
|
|
|
|
|
|
6.2
|
|
|
11
|
|
Non-controlling interests
|
0.2
|
|
|
0.2
|
|
|
|
|
|
0.2
|
|
|
|
|
Total equity
|
47.8
|
|
|
47.8
|
|
|
|
|
|
45.9
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares in issue, excluding own shares
|
60,459m
|
|
|
63,653m
|
|
|
(5)
|
|
|
60,491m
|
|
|
|
1 The
increase between 31 March 2024 and 31 December 2024 is net of the
impact of the securitisations of primarily legacy Retail mortgages
of £1.9 billion
2 UK
Motor Finance balances on an underlying basisA
exclude a finance lease gross up. See
page 1.
3 Within
underlying loans and advances, Retail other includes the European
and Wealth businesses.
4 Central
Items includes central fair value hedge accounting
adjustments.
GROUP RESULTS – STATUTORY BASIS
The results below are prepared in accordance with the recognition
and measurement principles of IFRS® Accounting
Standards. The underlying results are shown on page 1.
|
Summary income statement
|
Three months ended
31 Mar
2025
£m
|
|
|
Three months ended
31 Mar
2024
£m
|
|
|
Change
%
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
3,204
|
|
|
3,045
|
|
|
5
|
|
Other income1
|
1,491
|
|
|
1,342
|
|
|
11
|
|
Total income1
|
4,695
|
|
|
4,387
|
|
|
7
|
|
Operating expenses
|
(2,868)
|
|
|
(2,703)
|
|
|
(6)
|
|
Impairment charge
|
(310)
|
|
|
(56)
|
|
|
|
|
Profit before tax
|
1,517
|
|
|
1,628
|
|
|
(7)
|
|
Tax expense
|
(383)
|
|
|
(413)
|
|
|
7
|
|
Profit after tax
|
1,134
|
|
|
1,215
|
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
Profit attributable to ordinary shareholders
|
1,006
|
|
|
1,069
|
|
|
(6)
|
|
Profit attributable to other equity holders
|
115
|
|
|
135
|
|
|
(15)
|
|
Profit attributable to non-controlling interests
|
13
|
|
|
11
|
|
|
18
|
|
Profit after tax
|
1,134
|
|
|
1,215
|
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares in issue (weighted-average –
basic)
|
60,589m
|
|
|
63,906m
|
|
|
(5)
|
|
Basic earnings per share
|
1.7p
|
|
|
1.7 p
|
|
|
|
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 presented on a
consistent basis.
|
Summary balance sheet
|
At 31 Mar
2025
£m
|
|
|
At 31 Dec
2024
£m
|
|
|
Change
%
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and balances at central banks
|
62,891
|
|
|
62,705
|
|
|
|
|
Financial assets at fair value through profit or loss
|
215,450
|
|
|
215,925
|
|
|
|
|
Derivative financial instruments
|
20,710
|
|
|
24,065
|
|
|
(14)
|
|
Financial assets at amortised cost
|
534,659
|
|
|
531,777
|
|
|
1
|
|
Financial assets at fair value through other comprehensive
income
|
31,027
|
|
|
30,690
|
|
|
1
|
|
Other assets
|
45,160
|
|
|
41,535
|
|
|
9
|
|
Total assets
|
909,897
|
|
|
906,697
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Deposits from banks
|
6,019
|
|
|
6,158
|
|
|
(2)
|
|
Customer deposits
|
487,691
|
|
|
482,745
|
|
|
1
|
|
Repurchase agreements at amortised cost
|
38,474
|
|
|
37,760
|
|
|
2
|
|
Financial liabilities at fair value through profit or
loss
|
30,039
|
|
|
27,611
|
|
|
9
|
|
Derivative financial instruments
|
18,359
|
|
|
21,676
|
|
|
(15)
|
|
Debt securities in issue at amortised cost
|
67,823
|
|
|
70,834
|
|
|
(4)
|
|
Liabilities arising from insurance and participating investment
contracts
|
120,131
|
|
|
122,064
|
|
|
(2)
|
|
Liabilities arising from non-participating investment
contracts
|
49,829
|
|
|
51,228
|
|
|
(3)
|
|
Other liabilities
|
34,286
|
|
|
30,644
|
|
|
12
|
|
Subordinated liabilities
|
9,446
|
|
|
10,089
|
|
|
(6)
|
|
Total liabilities
|
862,097
|
|
|
860,809
|
|
|
|
|
Total equity
|
47,800
|
|
|
45,888
|
|
|
4
|
|
Total equity and liabilities
|
909,897
|
|
|
906,697
|
|
|
|
REVIEW OF
PERFORMANCEA
Income statementA
The Group’s statutory profit before tax for the first quarter
of 2025 was £1,517 million, 7% lower than in the first
quarter of 2024. This was driven by higher total income more than
offset by higher operating expenses and a higher impairment charge.
Profit after tax was £1,134 million and earnings per
share was 1.7 pence (three months to 31 March 2024:
£1,215 million and 1.7 pence respectively). Compared
to the fourth quarter of 2024, statutory profit after tax was up
62%, including the impact of a charge for the potential impacts of
motor finance commission arrangements in the fourth
quarter.
The Group’s underlying profit was £1,532 million in
the first three months of 2025, a reduction of 13% compared to
£1,757 million in the same period in 2024 with higher net
income more than offset by higher operating costs and a higher
underlying impairment charge. Underlying profit was up 54% compared
to the fourth quarter of last year, which included the charge for
the potential impacts of motor finance commission
arrangements.
Net income of £4,391 million was up 4% compared to the first
quarter of 2024, driven by higher underlying net interest income
and underlying other income, partly offset by an increased charge
for operating lease depreciation. Net income in the first quarter
was slightly up compared to the fourth quarter of
2024.
Within net income, underlying net interest income of £3,294
million was up 3% versus the prior year (three months to 31 March
2024: £3,184 million). This was supported by a banking net
interest margin of 3.03% (three months to 31 March 2024:
2.95%), benefitting from strong deposit volumes and a growing
structural hedge contribution as balances are reinvested in a
higher rate environment, partially offset by continued asset margin
compression and deposit churn headwinds. Average interest-earning
banking assets in the first quarter of 2025 of
£455.5 billion were higher than the first quarter of 2024
(three months to 31 March 2024: £449.1 billion). Growth in
average interest-earning banking assets was primarily driven by UK
mortgages, UK Retail unsecured loans and Europe, partially offset
by Commercial Banking, in turn driven by continued repayments of
government-backed lending in Business and Commercial Banking and
lower lending to banks. Underlying net interest income in the first
three months of 2025 included a non-banking net interest expense of
£112 million (three months to 31 March 2024:
£105 million), increasing slightly as a result of growth
in the Group’s non-banking businesses.
Underlying net interest income was slightly ahead of the fourth
quarter of 2024, despite a lower day count in the quarter (three
months to 31 December 2024: £3,276 million). A growing
structural hedge contribution and strong deposit volumes more than
offset the impact of continued headwinds from deposit churn and
underlying asset margin compression. Together this resulted in an
increase in the banking net interest margin to 3.03%
(three months to 31 December 2024: 2.97%). Average
interest-earning banking assets were broadly stable versus the
fourth quarter of 2024, given the timing of lending growth across
the two quarters, lower bank lending and the impact of
securitisation activity in the fourth quarter. The Group
continues to expect the underlying net interest income for 2025 to
be c.£13.5 billion.
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. At the end of the first
quarter of 2025, the notional balance of the sterling structural
hedge was maintained at £242 billion with a stable
weighted average duration of approximately three-and-a-half years.
The Group generated £1.2 billion of total income from
sterling structural hedge balances in the first three months of
2025, an increase over the prior year (three months to
31 March 2024: £1.0 billion). The Group
continues to expect sterling structural hedge earnings in 2025 to
be £1.2 billion higher than in 2024.
Underlying other income in the first quarter of 2025 of £1,452
million grew by 8% compared to the prior year (three months to 31
March 2024: £1,340 million). In particular, this was
driven by an increase of 16% in Retail, primarily due to UK Motor
Finance, including fleet growth and higher average vehicle rental
values, alongside Insurance, Pensions and Investments up 8% from
strong trading and higher general insurance income net of claims
and growth in the equity investments businesses. Compared to the
fourth quarter of 2024, underlying other income was up 1%,
supported by continued UK Motor Finance growth, strong markets
performance in Commercial Banking and higher general insurance
income in Insurance, Pensions and Investments, partially offset by
the timing of exits in the Group’s equity investment
businesses.
Operating lease depreciation of £355 million in the first
three months of 2025 was higher than in the prior year (three
months to 31 March 2024: £283 million), as a
result of fleet growth, the depreciation of higher value
vehicles and declines in used electric car prices over
2024.
REVIEW OF PERFORMANCE (continued)
Total costs, including remediation, of £2,550 million were 5%
higher than the prior year. Operating costs of
£2,550 million were up 6% combining inflationary
pressures, timing of strategic investment including planned higher
severance front-loaded into the first quarter of 2025 and business
growth costs, partly offset by cost savings and continued cost
discipline. Operating costs are still expected to be
c.£9.7 billion in 2025, including the impact of increased
severance and changes to National Insurance contributions
(c.£0.1 billion).
No net remediation charge was recognised by the Group in the first
three months of 2025 (three months to 31 March 2024:
£25 million). There have been no further charges relating
to motor finance commission arrangements. The Supreme Court heard
the appeal of the Wrench, Johnson and Hopcraft decision in early
April and has stated that it is likely to produce its judgment in
July. The FCA has indicated that the decision will inform its next
steps in the discretionary commission arrangements (DCA) review and
that it will confirm within six weeks of the decision if it is
proposing a redress scheme and if so, how it will take that
forward. The FCA has also noted that its next steps on non-DCA
complaints will be informed by the decision.
The Group’s cost:income ratio including remediation for the
first quarter was 58.1%, impacted by the Bank of England
supervisory charge and higher severance costs. This compares
to 57.2% in the first three months of 2024 and 73.7% in the
fourth quarter of 2024, which was impacted by the provision charge
for the potential impacts of motor finance commission arrangements
and the Bank Levy.
Asset quality remained resilient in the quarter. The underlying
impairment charge was £309 million (three months to 31
March 2024: £57 million), resulting in an asset
quality ratio of 27 basis points. Within this, updated multiple
economic scenarios (MES) resulted in a £35 million net charge
(three months to 31 March 2024: £192 million credit).
This included a £100 million central adjustment to address
downside risks to the base case related to the potential impact
from US tariff policies announced at the start of April. These were
becoming apparent around the balance sheet date and were determined
to not be fully captured within the modelled divisional ECL
allowances. This is partially offset by benefits to the MES from
small increases to house price and wage growth
expectations.
The pre-updated MES charge of £274 million is equivalent to an
asset quality ratio of 24 basis points. The higher pre-updated MES
charge compared to prior year is driven by the non-recurrence of a
one-off release from loss rates used in the model in Commercial
Banking in the first quarter of 2024. Excluding this one-off
impact, the pre-updated MES charge is favourable to the prior year
with strong portfolio performance in Retail more
than offsetting a higher charge in Commercial Banking. The
Group continues to expect the asset quality ratio to be c.25 basis
points in 2025.
Restructuring costs for the first three months of 2025 were £4
million (three months to 31 March 2024: £12 million).
Volatility and other items were a net cost of £11 million
for the first three months (three months to 31 March 2024: net cost
of £117 million). This included £20 million for the
amortisation of purchased intangibles (three months to
31 March 2024: £20 million) and
£21 million relating to the usual fair value unwind
(three months to 31 March 2024: £26 million), alongside
positive market volatility of £30 million (three months to 31
March 2024: negative market volatility of £71
million).
The return on tangible equity for the first quarter was 12.6%
(three months to 31 March 2024: 13.3%). The Group continues to
expect the return on tangible equity for 2025 to be
c.13.5%.
Tangible net assets per share at 31 March 2025 were 54.4 pence, up
2.0 pence in the quarter (31 December 2024: 52.4 pence),
from attributable profit alongside unwind of the cash flow hedge
reserve.
The Group has commenced the share buyback announced in February
2025, with c.0.3 billion shares repurchased as at 31 March
2025.
REVIEW OF PERFORMANCE (continued)
Balance sheet
The Group saw strong lending growth in the first quarter of 2025
with underlying loans and advances to customers increasing by
£7.1 billion from the end of 2024 to £466.2 billion. This
included growth of £4.8 billion in UK mortgages and growth
across UK Retail unsecured loans, credit cards, UK Motor Finance
and the European retail business. Lending balances remained broadly
stable in Commercial Banking, with growth in Institutional balances
partly offset by repayments of £0.5 billion of
government-backed lending.
Customer deposits of £487.7 billion increased
significantly in the quarter by £5.0 billion. Retail deposits
were up £2.7 billion in the period, driven by net inflows
to limited withdrawal and fixed term deposits alongside higher
current account balances, as a result of the Group’s strong
propositions and growing customer incomes. Commercial Banking
deposits were up £2.3 billion in the quarter, aided by
short term balances.
The Group delivered £0.9 billion net new money in Insurance,
Pensions and Investments and Wealth open book assets under
administration (AuA) over the period. In total, open book AuA stand
at c.£199 billion at 31 March 2025.
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%
(31 December 2024: 146%) and net stable funding ratio of 128%
(31 December 2024: 129%). The loan to deposit ratio of 96%,
stable compared to 31 December 2024, continues to reflect a
robust funding and liquidity position, with significant capacity to
grow lending.
Capital
The Group’s CET1 capital ratio at 31 March 2025 was 13.5% (31
December 2024: 13.5% pro forma). Capital generation during the
first three months was 27 basis points, reflecting strong banking
build after the impact of front-loaded severance costs, partially
offset by risk-weighted asset increases, including temporary
increases. The Group has accrued a foreseeable ordinary dividend of
23 basis points, based upon a pro-rated amount of the 2024 full
year dividend. The Group continues to expect capital generation in
2025 to be c.175 basis points.
Risk-weighted assets increased by £5.5 billion to £230.1
billion at 31 March 2025 (31 December 2024:
£224.6 billion). This reflects the impact of strong
lending growth, but also includes a temporary c.£2.5 billion
increase primarily due to hedging activity that is expected to
reverse by the third quarter. The growth in risk-weighted assets
was partly offset by continued optimisation activity and other
movements. While no Retail secured CRD IV increases were
recognised during the quarter, the Group continues to envisage that
the overall uplift to be recognised against performing exposures in
respect of CRD IV secured assets could be modestly higher than
£5 billion (including the £3.3 billion recognised in
2024), subject to finalisation with the PRA.
The Group’s regulatory CET1 capital requirement remains at
around 12%. This includes the Pillar 2A CET1 capital requirement of
about 1.5% 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%. In order to manage risks and
distributions in an orderly way, the Board intends to progress in
stages towards paying down to the current CET1 capital target of
c.13.0% by the end of 2026.
ADDITIONAL INFORMATION
Capital generation
|
Pro forma CET1 ratio as at 31 December 2024A,1
|
13.5%
|
|
|
Banking build (bps)2
|
55
|
|
|
Risk-weighted assets (bps)
|
(34)
|
|
|
Other movements (bps)3
|
6
|
|
|
Capital generation (bps)
|
27
|
|
|
Ordinary dividend (bps)
|
(23)
|
|
|
CET1 ratio as at 31 March 2025
|
13.5%
|
|
1 31
December 2024 reflects both the full impact of the share buyback
announced in respect of 2024 and the ordinary dividend received
from the Insurance business in February 2025.
2 Includes
impairment charge and movement in excess regulatory expected
losses.
3 Includes
share-based payments.
Underlying
impairmentA
|
|
Three months ended
31 Mar 2025
£m
|
|
|
Three months ended
31 Mar 2024
£m
|
|
|
Change
%
|
|
Three months ended
31 Dec 2024
£m
|
|
|
Change
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charges (credits) pre-updated MES1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
204
|
|
|
303
|
|
|
33
|
|
197
|
|
|
(4)
|
|
Commercial
Banking
|
71
|
|
|
(49)
|
|
|
|
|
32
|
|
|
|
|
Other
|
(1)
|
|
|
(5)
|
|
|
(80)
|
|
1
|
|
|
|
|
|
274
|
|
|
249
|
|
|
(10)
|
|
230
|
|
|
(19)
|
|
Updated economic outlook (MES)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
(90)
|
|
|
(196)
|
|
|
(54)
|
|
(63)
|
|
|
43
|
|
Commercial
Banking
|
25
|
|
|
4
|
|
|
|
|
(7)
|
|
|
|
|
Other
|
100
|
|
|
–
|
|
|
|
|
–
|
|
|
|
|
|
35
|
|
|
(192)
|
|
|
|
|
(70)
|
|
|
|
|
Underlying impairment chargeA
|
309
|
|
|
57
|
|
|
|
|
160
|
|
|
(93)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality ratioA
|
0.27%
|
|
|
0.06%
|
|
|
21bp
|
|
0.14%
|
|
|
13bp
|
1 Impairment
charges excluding the impact from updated economic outlook
(multiple economic scenarios, MES) taken each
quarter.
ADDITIONAL INFORMATION (continued)
Loans and advances to customers and expected credit loss allowance
– underlyingA basis
|
At 31 March 2025
|
Stage 1
£m
|
|
|
Stage 2
£m
|
|
|
Stage 3
£m
|
|
|
Total
£m
|
|
|
Stage 2
as % of
total
|
|
|
Stage 3
as % of
total
|
|
|
Loans and advances to customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UK mortgages1
|
276,559
|
|
|
35,116
|
|
|
6,363
|
|
|
318,038
|
|
|
11.0
|
|
|
2.0
|
|
|
Credit
cards
|
13,875
|
|
|
2,327
|
|
|
261
|
|
|
16,463
|
|
|
14.1
|
|
|
1.6
|
|
|
UK
unsecured loans and overdrafts
|
9,660
|
|
|
1,325
|
|
|
171
|
|
|
11,156
|
|
|
11.9
|
|
|
1.5
|
|
|
UK Motor Finance2
|
13,502
|
|
|
2,491
|
|
|
131
|
|
|
16,124
|
|
|
15.4
|
|
|
0.8
|
|
|
Other
|
18,462
|
|
|
471
|
|
|
151
|
|
|
19,084
|
|
|
2.5
|
|
|
0.8
|
|
|
Retail
|
332,058
|
|
|
41,730
|
|
|
7,077
|
|
|
380,865
|
|
|
11.0
|
|
|
1.9
|
|
|
Business
and Commercial Banking
|
25,778
|
|
|
2,946
|
|
|
1,160
|
|
|
29,884
|
|
|
9.9
|
|
|
3.9
|
|
|
Corporate
and Institutional Banking
|
55,355
|
|
|
2,631
|
|
|
1,014
|
|
|
59,000
|
|
|
4.5
|
|
|
1.7
|
|
|
Commercial Banking
|
81,133
|
|
|
5,577
|
|
|
2,174
|
|
|
88,884
|
|
|
6.3
|
|
|
2.4
|
|
|
Equity Investments and Central Items3
|
(88)
|
|
|
–
|
|
|
–
|
|
|
(88)
|
|
|
|
|
|
|
|
|
Total gross lending
|
413,103
|
|
|
47,307
|
|
|
9,251
|
|
|
469,661
|
|
|
10.1
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer related ECL allowance (drawn and undrawn)
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
UK mortgages1
|
52
|
|
|
279
|
|
|
624
|
|
|
955
|
|
|
|
|
|
|
|
|
Credit
cards
|
199
|
|
|
308
|
|
|
130
|
|
|
637
|
|
|
|
|
|
|
|
|
UK
unsecured loans and overdrafts
|
167
|
|
|
240
|
|
|
114
|
|
|
521
|
|
|
|
|
|
|
|
|
UK Motor Finance4
|
170
|
|
|
118
|
|
|
75
|
|
|
363
|
|
|
|
|
|
|
|
|
Other
|
14
|
|
|
14
|
|
|
38
|
|
|
66
|
|
|
|
|
|
|
|
|
Retail
|
602
|
|
|
959
|
|
|
981
|
|
|
2,542
|
|
|
|
|
|
|
|
|
Business
and Commercial Banking
|
133
|
|
|
183
|
|
|
172
|
|
|
488
|
|
|
|
|
|
|
|
|
Corporate
and Institutional Banking
|
117
|
|
|
152
|
|
|
324
|
|
|
593
|
|
|
|
|
|
|
|
|
Commercial Banking
|
250
|
|
|
335
|
|
|
496
|
|
|
1,081
|
|
|
|
|
|
|
|
|
Equity Investments and Central Items5
|
50
|
|
|
50
|
|
|
–
|
|
|
100
|
|
|
|
|
|
|
|
|
Total
|
902
|
|
|
1,344
|
|
|
1,477
|
|
|
3,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer related ECL allowance (drawn and undrawn) as a percentage
of loans and advances to customers6
|
|
||||||||||||||||
|
|
Stage 1%
|
|
|
Stage 2%
|
|
|
Stage 3%
|
|
|
Total%
|
|
|
|
|
|
|
|
|
UK
mortgages
|
–
|
|
|
0.8
|
|
|
9.8
|
|
|
0.3
|
|
|
|
|
|
|
|
|
Credit
cards
|
1.4
|
|
|
13.2
|
|
|
49.8
|
|
|
3.9
|
|
|
|
|
|
|
|
|
UK
unsecured loans and overdrafts
|
1.7
|
|
|
18.1
|
|
|
66.7
|
|
|
4.7
|
|
|
|
|
|
|
|
|
UK
Motor Finance
|
1.3
|
|
|
4.7
|
|
|
57.3
|
|
|
2.3
|
|
|
|
|
|
|
|
|
Other
|
0.1
|
|
|
3.0
|
|
|
25.2
|
|
|
0.3
|
|
|
|
|
|
|
|
|
Retail
|
0.2
|
|
|
2.3
|
|
|
13.9
|
|
|
0.7
|
|
|
|
|
|
|
|
|
Business
and Commercial Banking
|
0.5
|
|
|
6.2
|
|
|
18.8
|
|
|
1.6
|
|
|
|
|
|
|
|
|
Corporate
and Institutional Banking
|
0.2
|
|
|
5.8
|
|
|
32.0
|
|
|
1.0
|
|
|
|
|
|
|
|
|
Commercial Banking
|
0.3
|
|
|
6.0
|
|
|
25.7
|
|
|
1.2
|
|
|
|
|
|
|
|
|
Equity Investments and Central Items
|
|
|
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
0.2
|
|
|
2.8
|
|
|
16.4
|
|
|
0.8
|
|
|
|
|
|
|
|
1 UK
mortgages balances on an underlying basisA
exclude the impact of the HBOS
acquisition-related adjustments.
2 UK
Motor Finance balances on an underlying basisA
exclude a finance lease gross
up.
3 Contains
central fair value hedge accounting
adjustments.
4 UK
Motor Finance includes £178 million relating to provisions
against residual values of vehicles subject to finance
leases.
5 Equity
Investments and Central Items includes a £100 million central
adjustment that has not been allocated to specific
portfolios.
6 Stage
3 and Total exclude loans in recoveries in Business and Commercial
Banking of £243 million and Corporate and Institutional
Banking of £1 million.
ADDITIONAL INFORMATION (continued)
Total ECL allowance by scenario
– underlying basisA
The following table shows the Group’s ECL for the
probability-weighted, upside, base case, downside and severe
downside scenarios, with the severe downside scenario incorporating
adjustments made to Consumer Price Index (CPI) inflation and UK
Bank Rate paths.
|
Underlying basisA
|
Probability-
weighted
£m
|
|
|
Upside
£m
|
|
|
Base case
£m
|
|
|
Downside
£m
|
|
|
Severe
downside
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 March 20251
|
|
3,744
|
|
|
2,869
|
|
|
3,296
|
|
|
4,219
|
|
|
6,285
|
|
|
At 31 December 2024
|
|
3,651
|
|
|
2,634
|
|
|
3,204
|
|
|
4,159
|
|
|
6,515
|
|
1 Includes
£100 million central adjustment held constant across all
scenarios.
Base case and MES economic assumptions
The Group’s base case scenario is for a slow expansion in
gross domestic product (GDP) and a modest rise in the unemployment
rate alongside small gains in residential and commercial property
prices. Inflationary pressures remain persistent, but gradual cuts
in UK Bank Rate are expected to continue during 2025. Risks around
this base case economic view lie in both directions and are largely
captured by the generation of alternative economic
scenarios.
The Group has taken into account the latest available information
at the reporting date in defining its base case scenario and
generating alternative economic scenarios. The scenarios include
forecasts for key variables as of the first quarter of 2025.
Actuals for this period, or restatements of past data, may have
since emerged prior to publication and have not been included. The
Group’s approach to generating alternative economic scenarios
is set out in detail in note 21 to the financial statements of the
Group’s 2024 annual report and accounts.
The Group had included assumptions for expected tariffs and
potential responses in its quarter-end base case conditioning
assumptions prior to announcements at the start of April. Initial
non-UK tariffs announced in the first few days of April and the
immediate market response were larger than expected. Accordingly,
the Group has adopted a £100 million central adjustment
to reflect the potential ECL impact, informed by high level
sensitivity to key UK economic metrics based on tariff scenarios.
Subsequent developments through April were judged to relate to
conditions after the balance sheet date and will be reflected in
the second quarter reporting period.
UK economic assumptions – base case scenario by
quarter
Key quarterly assumptions made by the Group in the base case
scenario are shown below. GDP growth is presented
quarter-on-quarter. House price growth, commercial real estate
price growth and CPI inflation are presented year-on-year, i.e.
from the equivalent quarter in the previous year. Unemployment rate
and UK Bank Rate are presented as at the end of each
quarter.
|
At 31 March 2025
|
First
quarter
2025
%
|
Second
quarter
2025
%
|
Third
quarter
2025
%
|
Fourth
quarter
2025
%
|
First
quarter
2026
%
|
Second
quarter
2026
%
|
Third
quarter
2026
%
|
Fourth
quarter
2026
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross domestic product growth
|
0.2
|
0.2
|
0.3
|
0.3
|
0.4
|
0.4
|
0.4
|
0.4
|
|
Unemployment rate
|
4.6
|
4.7
|
4.8
|
4.8
|
4.8
|
4.8
|
4.8
|
4.8
|
|
House price growth
|
3.8
|
3.8
|
2.4
|
1.7
|
1.3
|
1.7
|
1.9
|
1.8
|
|
Commercial real estate price growth
|
2.6
|
2.8
|
2.7
|
1.3
|
0.9
|
0.7
|
0.8
|
1.1
|
|
UK Bank Rate
|
4.50
|
4.25
|
4.00
|
4.00
|
3.75
|
3.75
|
3.50
|
3.50
|
|
CPI inflation
|
2.8
|
3.6
|
3.6
|
3.5
|
3.0
|
2.8
|
2.6
|
2.7
|
ADDITIONAL INFORMATION (continued)
Base case and MES economic assumptions (continued)
UK economic assumptions – scenarios by year
Key annual assumptions made by the Group are shown below. GDP
growth and CPI inflation are 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.
Unemployment rate and UK Bank Rate are averages for the
period.
|
At
31 March 2025
|
2025
%
|
2026
%
|
2027
%
|
2028
%
|
2029
%
|
2025-2029
average
%
|
|
|
|
|
|
|
|
|
|
Upside
|
|
|
|
|
|
|
|
Gross domestic product growth
|
1.3
|
2.2
|
1.6
|
1.5
|
1.4
|
1.6
|
|
Unemployment rate
|
4.1
|
3.2
|
3.1
|
3.1
|
3.2
|
3.3
|
|
House price growth
|
2.9
|
5.9
|
6.8
|
5.4
|
4.3
|
5.1
|
|
Commercial real estate price growth
|
6.1
|
5.7
|
2.6
|
1.0
|
0.4
|
3.2
|
|
UK Bank Rate
|
4.43
|
4.72
|
4.86
|
5.06
|
5.20
|
4.85
|
|
CPI inflation
|
3.3
|
2.8
|
2.8
|
3.1
|
3.0
|
3.0
|
|
|
|
|
|
|
|
|
|
Base case
|
|
|
|
|
|
|
|
Gross domestic product growth
|
0.8
|
1.4
|
1.6
|
1.6
|
1.5
|
1.3
|
|
Unemployment rate
|
4.7
|
4.8
|
4.6
|
4.5
|
4.5
|
4.6
|
|
House price growth
|
1.7
|
1.8
|
1.9
|
2.5
|
2.9
|
2.1
|
|
Commercial real estate price growth
|
1.3
|
1.1
|
1.2
|
0.6
|
0.3
|
0.9
|
|
UK Bank Rate
|
4.19
|
3.63
|
3.50
|
3.50
|
3.50
|
3.66
|
|
CPI inflation
|
3.4
|
2.8
|
2.5
|
2.5
|
2.4
|
2.7
|
|
|
|
|
|
|
|
|
|
Downside
|
|
|
|
|
|
|
|
Gross domestic product growth
|
(0.2)
|
(0.9)
|
0.9
|
1.5
|
1.5
|
0.6
|
|
Unemployment rate
|
5.6
|
7.4
|
7.6
|
7.3
|
7.0
|
7.0
|
|
House price growth
|
0.5
|
(3.4)
|
(6.7)
|
(4.2)
|
(1.1)
|
(3.0)
|
|
Commercial real estate price growth
|
(4.7)
|
(5.7)
|
(1.7)
|
(2.2)
|
(2.3)
|
(3.4)
|
|
UK Bank Rate
|
3.83
|
1.67
|
0.96
|
0.65
|
0.42
|
1.51
|
|
CPI inflation
|
3.4
|
2.8
|
2.0
|
1.5
|
1.0
|
2.1
|
|
|
|
|
|
|
|
|
|
Severe downside
|
|
|
|
|
|
|
|
Gross domestic product growth
|
(1.1)
|
(2.3)
|
0.7
|
1.4
|
1.5
|
0.0
|
|
Unemployment rate
|
6.8
|
10.0
|
10.2
|
9.7
|
9.3
|
9.2
|
|
House price growth
|
(0.6)
|
(8.4)
|
(13.8)
|
(9.6)
|
(5.0)
|
(7.6)
|
|
Commercial real estate price growth
|
(12.5)
|
(13.3)
|
(7.1)
|
(5.7)
|
(4.9)
|
(8.8)
|
|
UK Bank Rate – modelled
|
3.38
|
0.39
|
0.09
|
0.03
|
0.01
|
0.78
|
|
UK Bank Rate – adjusted1
|
4.25
|
2.94
|
2.80
|
2.76
|
2.75
|
3.10
|
|
CPI inflation – modelled
|
3.4
|
2.5
|
1.3
|
0.4
|
(0.2)
|
1.5
|
|
CPI inflation – adjusted1
|
3.8
|
3.8
|
3.2
|
2.7
|
2.4
|
3.2
|
|
|
|
|
|
|
|
|
|
Probability-weighted
|
|
|
|
|
|
|
|
Gross domestic product growth
|
0.5
|
0.6
|
1.3
|
1.5
|
1.5
|
1.1
|
|
Unemployment rate
|
5.0
|
5.6
|
5.6
|
5.4
|
5.4
|
5.4
|
|
House price growth
|
1.4
|
0.5
|
(0.8)
|
0.1
|
1.3
|
0.5
|
|
Commercial real estate price growth
|
(0.4)
|
(1.0)
|
(0.1)
|
(0.7)
|
(1.0)
|
(0.6)
|
|
UK Bank Rate – modelled
|
4.07
|
3.04
|
2.81
|
2.76
|
2.74
|
3.08
|
|
UK Bank Rate – adjusted1
|
4.16
|
3.30
|
3.08
|
3.04
|
3.01
|
3.32
|
|
CPI inflation – modelled
|
3.4
|
2.7
|
2.3
|
2.1
|
1.9
|
2.5
|
|
CPI inflation – adjusted1
|
3.4
|
2.9
|
2.5
|
2.4
|
2.2
|
2.7
|
1 The
adjustment to UK Bank Rate and CPI inflation in the severe downside
is considered to better reflect the risks to the Group’s base
case view in an economic environment where the risks of supply and
demand shocks are seen as more balanced.
The statutory results are supplemented with a number of metrics
that are used throughout the banking and insurance industries on an
underlying basis. A description of these measures and their
calculation, which remain materially unchanged since the year-end,
is set out on pages 27 to 32 of the Group’s 2024 Full Year
Results news release.
|
|
Three months ended
31 Mar 2025
|
|
|
Three months ended
31 Mar 2024
|
|
|
|
|
|
|
|
|
|
Banking net interest
marginA
|
|
|
|
|
|
|
Underlying net interest incomeA
(£m)
|
3,294
|
|
|
3,184
|
|
|
Remove non-banking underlying net interest expense
(£m)
|
112
|
|
|
105
|
|
|
Banking underlying net interest income (£m)
|
3,406
|
|
|
3,289
|
|
|
|
|
|
|
|
|
|
Loans and advances to customers (£bn)
|
466.9
|
|
|
448.5
|
|
|
Remove finance lease gross up1
(£bn)
|
(0.7)
|
|
|
–
|
|
|
Underlying loans and advances to customersA
(£bn)
|
466.2
|
|
|
448.5
|
|
|
Add back:
|
|
|
|
|
|
|
Expected
credit loss allowance (drawn) (£bn)
|
3.3
|
|
|
3.6
|
|
|
Acquisition
related fair value adjustments (£bn)
|
0.2
|
|
|
0.2
|
|
|
Underlying gross loans and advances to customers
(£bn)
|
469.7
|
|
|
452.3
|
|
|
Adjustment for non-banking and other items:
|
|
|
|
|
|
|
Fee-based
loans and advances (£bn)
|
(9.7)
|
|
|
(9.7)
|
|
|
Other
(£bn)
|
1.3
|
|
|
6.8
|
|
|
Interest-earning banking assets (£bn)
|
461.3
|
|
|
449.4
|
|
|
Averaging (£bn)
|
(5.8)
|
|
|
(0.3)
|
|
|
Average interest-earning banking assetsA
(£bn)
|
455.5
|
|
|
449.1
|
|
|
|
|
|
|
|
|
|
Banking net interest marginA
|
3.03%
|
|
|
2.95%
|
|
1 The
finance lease gross up represents a statutory accounting adjustment
required under IFRS 9 to recognise a continuing involvement asset
following the partial derecognition of a component of the Group's
finance lease book via a securitisation in the third quarter of
2024.
|
|
Three months ended
31 Mar 2025
|
|
|
Three months ended
31 Mar 2024
|
|
|
|
|
|
|
|
|
|
Return on tangible
equityA
|
|
|
|
|
|
|
Profit attributable to ordinary shareholders (£m)
|
1,006
|
|
|
1,069
|
|
|
|
|
|
|
|
|
|
Average ordinary shareholders’ equity (£bn)
|
40.1
|
|
|
40.4
|
|
|
Remove average goodwill and other intangible assets
(£bn)
|
(7.8)
|
|
|
(8.0)
|
|
|
Average tangible equity (£bn)
|
32.3
|
|
|
32.4
|
|
|
|
|
|
|
|
|
|
Return on tangible equityA
|
12.6%
|
|
|
13.3%
|
|
KEY DATES
|
Annual General Meeting
|
15 May 2025
|
|
Final 2024 dividend paid
|
20 May 2025
|
|
2025 Half-year results
|
24 July 2025
|
|
Q3 2025 Interim Management Statement
|
23 October 2025
|
This release covers the results of Lloyds Banking Group plc
together with its subsidiaries (the Group) for the three months
ended 31 March 2025. Unless otherwise stated, income statement
commentaries throughout this document compare the three months
ended 31 March 2025 to the three months ended 31 March 2024 and the
balance sheet analysis compares the Group balance sheet as at 31
March 2025 to the Group balance sheet as at 31 December 2024.
The Group uses a number of alternative performance measures,
including underlying profit, in the discussion of its business
performance and financial position. These measures are labelled
with a superscript ‘A’ throughout this document.
Further information on these measures is set out above. Unless
otherwise stated, commentary on page 1 is given on an underlying basis. The Group’s
Q1 Interim Pillar 3 disclosures can be found at:
www.lloydsbankinggroup.com/investors/financial-downloads.html.
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 Banking Group plc together with its subsidiaries
(the Group) and its current goals and expectations. Statements that
are not historical or current facts, including statements about the
Group’s or its directors’ and/or management’s
beliefs and expectations, are forward-looking statements. Words
such as, without limitation, ‘believes’,
‘achieves’, ‘anticipates’,
‘estimates’, ‘expects’,
‘targets’, ‘should’, ‘intends’,
‘aims’, ‘projects’, ‘plans’,
‘potential’, ‘will’, ‘would’,
‘could’, ‘considered’,
‘likely’, ‘may’, ‘seek’,
‘estimate’, ‘probability’,
‘goal’, ‘objective’, ‘deliver’,
‘endeavour’, ‘prospects’,
‘optimistic’ and similar expressions or variations on
these expressions are intended to identify forward-looking
statements. These statements concern or may affect future matters,
including but not limited to: projections or expectations of the
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 Group’s
future financial performance; the level and extent of future
impairments and write-downs; the Group’s ESG targets and/or
commitments; statements of plans, objectives or goals of the Group
or its management and other statements that are not historical fact
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, targets, plans and/or results (including but
not limited to the payment of dividends) to differ materially from
forward-looking statements include, but are not limited to: general
economic and business conditions in the UK and internationally
(including in relation to tariffs); imposed and threatened tariffs
and changes to global trade policies; acts of hostility or
terrorism and responses to those acts, or other such events;
geopolitical unpredictability; the war between Russia and Ukraine;
the conflicts in the Middle East; the tensions between China and
Taiwan; political instability including as a result of any UK
general election; market related risks, trends and developments;
changes in client and consumer behaviour and demand; exposure to
counterparty risk; the ability to access sufficient sources of
capital, liquidity and funding when required; changes to the
Group’s credit ratings; fluctuations in interest rates,
inflation, exchange rates, stock markets and currencies; volatility
in credit markets; volatility in the price of the Group’s
securities; natural pandemic and other disasters; risks concerning
borrower and counterparty credit quality; risks affecting insurance
business and defined benefit pension schemes; changes in laws,
regulations, practices and accounting standards or taxation;
changes to regulatory capital or liquidity requirements and similar
contingencies; the policies and actions of governmental or
regulatory authorities or courts together with any resulting impact
on the future structure of the Group; risks associated with the
Group’s compliance with a wide range of laws and regulations;
assessment related to resolution planning requirements; risks
related to regulatory actions which may be taken in the event of a
bank or Group failure; exposure to legal, regulatory or competition
proceedings, investigations or complaints; failure to comply with
anti-money laundering, counter terrorist financing, anti-bribery
and sanctions regulations; failure to prevent or detect any illegal
or improper activities; operational risks including risks as a
result of the failure of third party suppliers; conduct risk;
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; technological
failure; inadequate or failed internal or external processes or
systems; risks relating to ESG matters, such as climate change (and
achieving climate change ambitions) and decarbonisation, including
the Group’s ability along with the government and other
stakeholders to measure, manage and mitigate the impacts of climate
change effectively, and human rights issues; the impact of
competitive conditions; failure to attract, retain and develop high
calibre talent; the ability to achieve strategic objectives; the
ability to derive cost savings and other benefits including, but
without limitation, as a result of any acquisitions, disposals and
other strategic transactions; inability to capture accurately the
expected value from acquisitions; assumptions and estimates that
form the basis of the Group’s financial statements; and
potential changes in dividend policy. A number of these influences
and factors are beyond the Group’s control. Please refer to
the latest Annual Report on Form 20-F filed by Lloyds Banking Group
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 Banking Group plc
may also make or disclose written and/or oral forward-looking
statements in other written materials and in oral statements made
by the directors, officers or employees of Lloyds Banking Group 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 Group expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements contained in this document whether as a result of new
information, future events or otherwise. 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
Rohith Chandra-Rajan
Director of Investor Relations
07786 988936
Nora Thoden
Director of Investor Relations – ESG
020 7356 2334
Tom Grantham
Investor Relations Senior Manager
07851 440 091
Sarah Robson
Investor Relations Senior Manager
07494 513 983
CORPORATE AFFAIRS
Matt Smith
Head of Media Relations
07788 352 487
Emma Fairhurst
Media Relations Senior Manager
07814 395 855
Copies of this Interim Management Statement may be obtained
from:
Investor Relations, Lloyds Banking Group plc, 33 Old Broad Street,
London, EC2N 1HZ
The statement can also be found on the Group’s website
– www.lloydsbankinggroup.com
Registered office: Lloyds Banking Group plc, The Mound, Edinburgh,
EH1 1YZ
Registered in Scotland No. SC095000
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
LLOYDS
BANKING GROUP plc
(Registrant)
By: Douglas
Radcliffe
Name: Douglas
Radcliffe
Title: Group
Investor Relations Director
Date: 01
May 2025