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Q3 2019Interim Management Statement
LLOYDS BANKING GROUP PLC Q3 2019 INTERIM MANAGEMENT STATEMENT
Page 1 of 9
GROUP CHIEF EXECUTIVE’S STATEMENT
“In the first nine months of 2019 we have made strong strategic progress and delivered solid financial performance in a
challenging external environment. I am disappointed that our statutory result was significantly impacted by the additional
PPI charge in the third quarter, driven by an unprecedented level of PPI information requests received in August. However,
our performance continues to demonstrate the resilience of our customer franchise and business model, the strength of
our balance sheet and that our strategy is the right one in this environment.
We will maintain our prudent approach to growth and risk whilst continuing to focus on reducing costs and investing in the
business to transform the Group for success in a digital world. Although continued economic uncertainty could further
impact the outlook, we remain well placed to support our customers and to continue to Help Britain Prosper.”
António Horta-Osório, Group Chief Executive
HIGHLIGHTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2019
Strong strategic progress and the right strategy in the current environment
Strategic investment of £1.7 billion since launch of GSR3 in February 2018
Schroders Personal Wealth launched with ambition of becoming top 3 financial planning business by end of 2023
Acquisition of Tesco Bank’s £3.7 billion UK prime residential mortgage portfolio
Solid financial performance with statutory result impacted by additional PPI charge
Statutory profit before tax of £2.9 billion including an additional £1.8 billion PPI charge in the third quarter
Underlying profit of £6.0 billion in a challenging external environment, with lower net income partly offset by lower
total costs and higher impairment charges
− Net income of £13.0 billion, down 3 per cent, with slightly lower average interest-earning banking assets of
£434 billion, net interest margin of 2.89 per cent and other income of £4.4 billion, down 4 per cent
− Total costs of £6.0 billion down 5 per cent driven by reductions in both operating costs and remediation charges.
Market-leading cost:income ratio further reduced to 46.5 per cent with positive jaws of 2 per cent
− Credit quality remains strong. Net asset quality ratio of 29 basis points, including a single large corporate charge
in the third quarter
Tangible net assets per share of 52.0 pence. Statutory return on tangible equity reduced to 6.8 per cent significantly
driven by the PPI charge with underlying return on tangible equity remaining strong at 15.7 per cent
Balance sheet strength maintained with lower Pillar 2A requirement
Loans and advances up £6 billion in the quarter, with continued growth in targeted segments including the open
mortgage book, benefiting from both the Tesco mortgage acquisition and organic growth, SME and Motor Finance
CET1 capital build of 149 basis points in the first nine months before PPI charge and 28 basis points after the charge;
CET1 ratio of 13.5 per cent
Pillar 2A CET1 requirement reduced from 2.7 per cent to 2.6 per cent. Target CET1 ratio remains c.12.5 per cent,
plus a c.1 per cent management buffer. Given the Pillar 2A reduction, the headroom above the regulatory
requirements has increased
Outlook
The resilience of the Group’s business model is reflected in its 2019 guidance:
− Net interest margin of 2.88 per cent, in line with previous guidance of c.2.90 per cent
− Operating costs now expected to be less than £7.9 billion, ahead of previous guidance, and cost:income ratio
to be lower than in 2018
− Net asset quality ratio of less than 30 basis points
− Free capital build of c.75 basis points, post the PPI charge of 121 basis points
Although continued economic uncertainty could further impact the outlook, the Group remains well positioned with
the right strategy to continue delivering for customers and shareholders
LLOYDS BANKING GROUP PLC Q3 2019 INTERIM MANAGEMENT STATEMENT
Page 2 of 9
INCOME STATEMENT − UNDERLYING BASIS
Nine Nine Three Three months months months months ended ended ended ended 30 Sept 30 Sept 30 Sept 30 Sept 2019 2018 Change 2019 2018 Change
£m £m % £m £m %
Net interest income 9,275 9,544 (3) 3,130 3,200 (2)
Other income 4,415 4,610 (4) 1,315 1,486 (12)
Operating lease depreciation (731) (731) – (258) (234) (10)
Vocalink gain on sale 50 – – –
Net income 13,009 13,423 (3) 4,187 4,452 (6)
Operating costs (5,817) (6,014) 3 (1,911) (1,990) 4
Remediation (226) (366) 38 (83) (109) 24
Total costs (6,043) (6,380) 5 (1,994) (2,099) 5
Impairment (950) (740) (28) (371) (284) (31)
Underlying profit 6,016 6,303 (5) 1,822 2,069 (12)
Restructuring (280) (612) 54 (98) (235) 58
Volatility and other items (339) (207) (64) 126 (17)
Payment protection insurance provision (2,450) (550) (1,800) –
Statutory profit before tax 2,947 4,934 (40) 50 1,817 (97)
Tax expense1 (960) (1,194) 20 (288) (394) 27
Statutory profit (loss) after tax1 1,987 3,740 (47) (238) 1,423
Earnings (loss) per share 2.2p 4.7p (53) (0.5)p 1.8p
Banking net interest margin 2.89% 2.93% (4)bp 2.88% 2.93% (5)bp
Average interest-earning banking assets £434bn £436bn – £435bn £435bn –
Cost:income ratio 46.5% 47.5% (1.0)pp 47.6% 47.1% 0.5pp
Asset quality ratio 0.29% 0.22% 7bp 0.33% 0.25% 8bp
Underlying return on tangible equity 15.7% 16.2% (0.5)pp 14.3% 15.9% (1.6)pp
Return on tangible equity 6.8% 13.0% (6.2)pp (2.8)% 14.8% (17.6)pp
KEY BALANCE SHEET METRICS
At 30 Sept At 30 June Change At 31 Dec Change 2019 2019 % 2018 %
Loans and advances to customers2 £447bn £441bn 1 £444bn 1
Customer deposits3 £419bn £418bn – £416bn 1
Loan to deposit ratio 107% 106% 1pp 107% –
Capital build4 28bp 70bp 210bp
CET1 ratio pre dividend accrual5 14.4% 14.6% (0.2)pp 13.9% 0.5pp
CET1 ratio5 13.5% 14.0% (0.5)pp 13.9% (0.4)pp
Transitional MREL ratio5 32.5% 32.2% 0.3pp 32.6% (0.1)pp
UK leverage ratio5 4.9% 5.1% (0.2)pp 5.6% (0.7)pp
Risk-weighted assets5 £209bn £207bn 1 £206bn 1
Tangible net assets per share 52.0p 53.0p (1.0)p 53.0p (1.0)p
1 Comparatives restated to reflect amendments to IAS 12, see basis of presentation. 2 Excludes reverse repos of £55.6 billion (30 June 2019: £54.1 billion; 31 December 2018: £40.5 billion). 3 Excludes repos of £1.8 billion (30 June 2019: £4.1 billion; 31 December 2018: £1.8 billion). 4 Capital build is reported before accrual for ordinary dividends, cancellation of remaining share buyback and Tesco mortgage portfolio. 5 The CET1, MREL and leverage ratios and risk-weighted assets at 30 June 2019 and 31 December 2018 are reported on a pro forma
basis, reflecting the dividend paid up by the Insurance business in the subsequent reporting period. The CET1 ratios at 31 December 2018 incorporate the effects of the share buyback announced in February 2019 and are reported post dividend accrual.
LLOYDS BANKING GROUP PLC Q3 2019 INTERIM MANAGEMENT STATEMENT
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QUARTERLY INFORMATION
Quarter Quarter Quarter Quarter Quarter Quarter Quarter ended ended ended ended ended ended ended 30 Sept 30 June 31 Mar 31 Dec 30 Sept 30 June 31 Mar 2019 2019 2019 2018 2018 2018 2018 £m £m £m £m £m £m £m
Net interest income 3,130 3,062 3,083 3,170 3,200 3,173 3,171
Other income 1,315 1,594 1,506 1,400 1,486 1,713 1,411
Operating lease depreciation (258) (254) (219) (225) (234) (245) (252)
Vocalink gain on sale – – 50 – – – –
Net income 4,187 4,402 4,420 4,345 4,452 4,641 4,330
Operating costs (1,911) (1,949) (1,957) (2,151) (1,990) (2,016) (2,008)
Remediation (83) (123) (20) (234) (109) (197) (60)
Total costs (1,994) (2,072) (1,977) (2,385) (2,099) (2,213) (2,068)
Impairment (371) (304) (275) (197) (284) (198) (258)
Underlying profit 1,822 2,026 2,168 1,763 2,069 2,230 2,004
Restructuring (98) (56) (126) (267) (235) (239) (138)
Volatility and other items 126 (126) (339) (270) (17) (16) (174)
Payment protection insurance provision
(1,800) (550) (100) (200) – (460) (90)
Statutory profit before tax 50 1,294 1,603 1,026 1,817 1,515 1,602
Tax expense1 (288) (269) (403) (260) (394) (369) (431)
Statutory profit (loss) after tax1 (238) 1,025 1,200 766 1,423 1,146 1,171
Banking net interest margin 2.88% 2.89% 2.91% 2.92% 2.93% 2.93% 2.93%
Average interest-earning banking assets
£435bn £433bn £433bn £436bn £435bn £436bn £437bn
Cost:income ratio 47.6% 47.1% 44.7% 54.9% 47.1% 47.7% 47.8%
Asset quality ratio 0.33% 0.27% 0.25% 0.18% 0.25% 0.18% 0.23%
Gross asset quality ratio 0.40% 0.38% 0.30% 0.30% 0.30% 0.26% 0.27%
Underlying return on tangible equity
14.3% 15.6% 17.0% 13.6% 15.9% 17.3% 15.4%
Return on tangible equity (2.8)% 10.5% 12.5% 7.8% 14.8% 11.9% 12.3%
Loans and advances to customers2
£447bn £441bn £441bn £444bn £445bn £442bn £445bn
Customer deposits3 £419bn £418bn £417bn £416bn £422bn £418bn £413bn
Loan to deposit ratio 107% 106% 106% 107% 105% 106% 108%
Risk-weighted assets4 £209bn £207bn £208bn £206bn £207bn £207bn £211bn
Tangible net assets per share 52.0p 53.0p 53.4p 53.0p 51.3p 52.1p 52.3p
1 Comparatives for 2018 restated to reflect amendments to IAS 12, see basis of presentation. 2 Excludes reverse repos. 3 Excludes repos. 4 Risk-weighted assets at 30 June 2018 are reported on a pro forma basis reflecting the sale of the Irish mortgage portfolio.
LLOYDS BANKING GROUP PLC Q3 2019 INTERIM MANAGEMENT STATEMENT
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BALANCE SHEET ANALYSIS
At 30 Sept At 30 June At 30 Sept At 31 Dec
2019 2019 Change 2018 Change 2018 Change £bn £bn % £bn % £bn % Loans and advances to customers
Open mortgage book 271.0 264.9 2 267.1 1 266.6 2
Closed mortgage book 19.1 19.8 (4) 21.5 (11) 21.2 (10)
Credit cards 17.7 17.7 – 18.5 (4) 18.1 (2)
UK Retail unsecured loans 8.4 8.2 2 7.9 6 7.9 6
UK Motor Finance 15.6 15.5 1 14.4 8 14.6 7
Overdrafts 1.3 1.2 8 1.2 8 1.3 –
Retail other1 9.2 9.0 2 8.3 11 8.6 7
SME2 32.4 32.3 – 31.8 2 31.8 2
Mid Markets 30.7 30.6 – 30.5 1 31.7 (3)
Global Corporates and Financial Institutions
33.7 34.7 (3) 34.1 (1) 34.4 (2)
Commercial Banking other 5.2 4.3 21 5.0 4 4.3 21
Wealth 0.9 0.9 – 0.8 13 0.9 –
Central items 2.0 1.9 5 3.5 (43) 3.0 (33)
Loans and advances to customers3 447.2 441.0 1 444.6 1 444.4 1
Customer deposits
Retail current accounts 76.1 76.0 – 74.3 2 73.7 3
Commercial current accounts2,4 34.6 34.0 2 33.5 3 34.9 (1)
Retail relationship savings accounts 144.3 144.4 – 146.0 (1) 145.9 (1)
Retail tactical savings accounts 14.1 15.3 (8) 18.7 (25) 16.8 (16)
Commercial deposits2,5 135.8 133.2 2 134.6 1 130.1 4
Wealth 13.6 13.8 (1) 13.7 (1) 14.1 (4)
Central items 0.7 0.9 (22) 0.8 (13) 0.8 (13)
Total customer deposits6 419.2 417.6 – 421.6 (1) 416.3 1
Total assets7 858.5 822.2 4 829.2 4 797.6 8
Total liabilities7 810.4 773.2 5 781.5 4 747.4 8
Shareholders’ equity 42.5 43.4 (2) 42.0 1 43.4 (2)
Other equity instruments 5.4 5.4 – 5.4 – 6.5 (17)
Non-controlling interests 0.2 0.2 – 0.3 (33) 0.3 (33)
Total equity 48.1 49.0 (2) 47.7 1 50.2 (4)
Ordinary shares in issue, excluding own shares 70,007m 70,740m 71,122m 71,149m
1 Primarily Europe. 2 Includes Retail Business Banking. 3 Excludes reverse repos. 4 Primarily non interest-bearing Commercial Banking current accounts. 5 Primarily Commercial Banking interest-bearing accounts. 6 Excludes repos. 7 The adoption of IFRS 16 on 1 January 2019 resulted in the recognition of a right-of-use asset of £1.7 billion and lease liabilities of
£1.8 billion.
LLOYDS BANKING GROUP PLC Q3 2019 INTERIM MANAGEMENT STATEMENT
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REVIEW OF PERFORMANCE
Solid financial performance with statutory result impacted by additional PPI charge
The Group’s statutory profit before tax for the nine months was £2,947 million with good underlying profit offset by an
additional £1,800 million payment protection insurance (PPI) charge in the third quarter.
Given the challenging external environment, underlying profit was £6,016 million compared to £6,303 million in the first
nine months of 2018, reflecting lower net income partially offset by lower total costs and higher impairment charges. The
Group’s underlying return on tangible equity remained strong at 15.7 per cent.
Net income of £13,009 million was 3 per cent lower than in the first nine months of 2018, reflecting lower net interest
income and other income, while operating lease depreciation was stable.
Net interest income of £9,275 million was down 3 per cent with both net interest margin and average interest-earning
banking assets slightly lower. Net interest margin reduced to 2.89 per cent for the period, and to 2.88 per cent in the third
quarter, with the benefit of lower deposit costs, higher current account balances and a small benefit from aligning MBNA
credit card terms to other brands across the Group more than offset by continued pressure on asset margins. Average
interest-earning banking assets reduced by £1.9 billion year on year with growth in targeted segments more than offset by
lower balances in the closed mortgage book and the sale of the Irish mortgage portfolio in the first half of 2018.
Other income decreased by 4 per cent to £4,415 million due to lower Commercial Banking income driven by more subdued
levels of client activity in the markets business given challenging external conditions, lower Retail income predominately
driven by lower Lex Autolease volumes, and lower gilt sales. Insurance and Wealth continued to perform well reflecting
growth in workplace pensions new business in the first half and higher general insurance income whilst also benefiting
from assumption changes and the one-off benefit from the planned change in investment management provider taken in
the first half of 2019.
Total costs of £6,043 million were 5 per cent lower than in the first nine months of 2018 driven by continued reductions in
both operating costs and remediation charges. Operating costs of £5,817 million were 3 per cent lower with a 6 per cent
reduction in business as usual costs1, largely driven by increased efficiency from digitalisation and process improvements,
in parallel with strategic investment of £0.8 billion in the business, up 24 per cent compared to the first nine months of
2018. Remediation charges of £226 million were significantly lower than the £366 million in the first nine months of 2018
and included additional charges of £83 million in the third quarter of 2019 relating to a number of items across existing
programmes. The Group’s market-leading cost:income ratio continues to provide a competitive advantage and further
strengthened to 46.5 per cent with positive jaws of 2 per cent. As a result of the Group’s continued focus on efficiency,
operating costs (which exclude remediation) are now expected to be less than £7.9 billion for the full year 2019, ahead of
previous guidance and the cost:income ratio (which includes remediation) is expected to be lower than in 2018.
Credit quality remains strong with a net asset quality ratio of 29 basis points and a gross asset quality ratio of 36 basis
points, compared with 22 basis points and 28 basis points respectively in the first nine months of 2018. The impairment
charge increased to £950 million, with the increase primarily driven by a single large corporate charge in the third quarter
and lower used car prices. The underlying asset quality ratio has remained low in recent quarters and the Group continues
to expect a net asset quality ratio of less than 30 basis points in 2019.
The Group’s outlook and IFRS 9 base case economic scenario used to calculate expected credit loss have remained
broadly stable in the quarter and throughout 2019 and reflect an orderly exit of the UK from the European Union.
1 2018 business as usual costs have been adjusted to a comparable basis after the implementation of IFRS 16 in 2019. On an unadjusted
basis business as usual costs reduced 10 per cent on prior year.
LLOYDS BANKING GROUP PLC Q3 2019 INTERIM MANAGEMENT STATEMENT
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REVIEW OF PERFORMANCE (continued)
Restructuring costs of £280 million were down 54 per cent, primarily reflecting lower severance costs relating to the Group’s
strategic investment plans and the completion of both the integration of MBNA and the ring-fencing programme, which
were partially offset by costs associated with establishing the Schroders Personal Wealth joint venture.
Volatility and other items of £339 million included adverse movements in banking volatility as well as the one-off charge
for exiting the Standard Life Aberdeen investment management agreement taken in the first half of 2019.
The PPI provision charge of £2,450 million included an additional charge of £1,800 million in the quarter, reflecting the
significant increase in PPI information requests (PIRs) leading up to the deadline for submission of claims on 29 August
2019, a PPI provision linked to the Official Receiver and associated administration costs. The assessment of PIR volumes
is now complete and the third quarter charge reflects this and the most recent data in terms of quality, which remains low,
averaging around 10 per cent. Taking this additional charge into account, the unutilised provision relating to PIRs,
complaints and associated administration costs stood at £2,324 million at the end of the third quarter.
Balance sheet strength maintained with lower Pillar 2A requirement
Loans and advances to customers increased by £6.2 billion to £447.2 billion in the third quarter with growth in targeted
segments, including the open mortgage book, SME and Motor Finance, offset by reductions in the closed mortgage book
and Global Corporates and Financial Institutions. The open mortgage book grew by £6.1 billion driven by the £3.7 billion
Tesco mortgage acquisition and £2.4 billion of organic book growth as the Group took advantage of market pricing in the
third quarter and benefitted from a strong application pipeline. The Group now expects its open mortgage book at the end
of 2019, including the Tesco mortgage acquisition, to be ahead of the 2018 year-end balance.
The Group continues to optimise funding and target current account balance growth, with Retail current accounts up 3 per
cent over the last nine months at £76.1 billion (31 December 2018: £73.7 billion). The loan to deposit ratio was flat at
107 per cent.
Tangible net assets per share reduced by 1.0 pence in the first nine months of 2019 to 52.0 pence mainly due to the impact
of the additional PPI charge on the Group’s statutory profit for the period.
The Group’s CET1 capital build amounted to 149 basis points before PPI and to 28 basis points after the in-year PPI
charge equivalent to 121 basis points. Underlying capital build of 148 basis points, along with other movements of 12 basis
points (reflecting market movements and the continued optimisation of Commercial Banking risk-weighted assets, net of
additional pension contributions), was partly offset by the 11 basis points impact of IFRS 16. The Group’s capital position
also benefitted by 34 basis points as a result of the cancellation of the remaining c.£650 million of the 2019 buyback
programme, as announced in September 2019. The Group used 9 basis points of capital for the acquisition of the Tesco
mortgage portfolio.
As a result, in the first nine months of the year, the CET1 capital ratio increased to 14.4 per cent pre dividend accrual. After
accruing 91 basis points for the ordinary dividend, the CET1 ratio at 13.5 per cent remains in line with the Board’s target.
Given the PPI charge in the third quarter, equivalent to 88 basis points, the Group now expects, assuming no unforeseen
events, free capital build of around 75 basis points in 2019. The Group continues to target a progressive and sustainable
ordinary dividend and in line with normal practice, the Board will give due consideration to the return of any surplus capital
at the year end.
LLOYDS BANKING GROUP PLC Q3 2019 INTERIM MANAGEMENT STATEMENT
Page 7 of 9
REVIEW OF PERFORMANCE (continued)
The Group recently received notification from the Prudential Regulation Authority (PRA) that its Pillar 2A CET1 requirement
has reduced from 2.7 per cent to 2.6 per cent. The Board’s view of the current level of capital required by the Group to
grow the business, meet regulatory requirements and cover uncertainties remains unchanged at c.12.5 per cent, plus a
c.1 per cent management buffer. The headroom to regulatory requirements has therefore increased. As previously
reported, the Group’s CET1 capital target reduced during 2019 and is now 50 basis points lower than prior year.
The Group remains well positioned to meet its minimum requirement for own funds and eligible liabilities (MREL) from
2020 and as at 30 September 2019, had a transitional MREL ratio of 32.5 per cent. The UK leverage ratio remains strong
at 4.9 per cent.
Risk-weighted assets have increased by £3 billion over the period driven primarily by the implementation of IFRS 16,
mortgage model updates and the acquisition of the Tesco mortgage portfolio, offset in part through further optimisation of
the Commercial Banking portfolio.
Outlook
In the first nine months of 2019 the Group made strong strategic progress and delivered a solid financial performance in a
challenging external environment. The Group’s performance continues to demonstrate the resilience of its customer
franchise and business model, the strength of its balance sheet and that its strategy remains the right one in the current
environment.
The Group will maintain its prudent approach to growth and risk whilst continuing to focus on reducing costs and investing
to transform the business for success in a digital world. Although continued economic uncertainty could further impact the
outlook, the Group remains well placed to support its customers and to continue to Help Britain Prosper.
LLOYDS BANKING GROUP PLC Q3 2019 INTERIM MANAGEMENT STATEMENT
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ADDITIONAL FINANCIAL INFORMATION
1. Banking net interest margin and average interest-earning banking assets
Nine Nine months months ended ended 30 Sept 30 Sept 2019 2018
Group net interest income – statutory basis (£m) 7,425 9,138
Insurance gross up (£m) 1,559 267
Volatility and other items (£m) 291 139
Group net interest income – underlying basis (£m) 9,275 9,544
Non-banking net interest expense (£m)1 103 19
Banking net interest income – underlying basis (£m) 9,378 9,563
Net loans and advances to customers (£bn)2 447.2 444.6
Impairment provision and fair value adjustments (£bn) 4.1 4.0
Non-banking items:
Fee-based loans and advances (£bn) (7.0) (6.3)
Other non-banking (£bn) (3.5) (5.9)
Gross banking loans and advances (£bn) 440.8 436.4
Averaging (£bn)3 (6.8) (0.5)
Average interest-earning banking assets (£bn) 434.0 435.9
Banking net interest margin (%) 2.89 2.93
1 Nine months ended 30 September 2019 includes impact from the implementation of IFRS 16. 2 Excludes reverse repos. 3 2019 includes a £3.6 billion impact from the Tesco mortgage portfolio acquisition.
2. Return on tangible equity
Nine Nine months months ended ended 30 Sept 30 Sept 2019 2018
Average shareholders' equity (£bn) 43.3 42.9
Average intangible assets (£bn) (5.9) (5.4)
Average tangible equity (£bn) 37.4 37.5
Underlying profit after tax (£m)1 4,543 4,725
Add back amortisation of intangible assets (post tax) (£m) 269 219
Less profit attributable to non-controlling interests and other equity holders (£m)1 (415) (392)
Adjusted underlying profit after tax (£m) 4,397 4,552
Underlying return on tangible equity (%) 15.7 16.2
Group statutory profit after tax (£m)1 1,987 3,740
Add back amortisation of intangible assets (post tax) (£m) 269 219
Add back amortisation of purchased intangible assets (post tax) (£m) 56 83
Less profit attributable to non-controlling interests and other equity holders (£m)1 (415) (392)
Adjusted statutory profit after tax (£m) 1,897 3,650
Statutory return on tangible equity (%) 6.8 13.0
1 Comparatives restated to reflect amendments to IAS 12, see basis of presentation.
LLOYDS BANKING GROUP PLC Q3 2019 INTERIM MANAGEMENT STATEMENT
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BASIS OF PRESENTATION
This release covers the results of Lloyds Banking Group plc together with its subsidiaries (the Group) for the nine months ended 30 September 2019. IFRS 16 and IAS 12: The Group adopted IFRS 16 Leases from 1 January 2019 and as permitted elected to apply the standard retrospectively with the cumulative effect of initial application being recognised at that date; comparative information has not been restated. The Group has implemented the amendments to IAS 12 Income Taxes with effect from 1 January 2019 and as a result tax relief on distributions on other equity instruments, previously recognised in equity, is now reported within tax expense. Comparatives have been restated. Statutory basis: Statutory profit before tax and statutory profit after tax are included on pages 2 and 3. However, a number of factors have had a significant effect on the comparability of the Group’s financial position and results. Accordingly, the results are also presented on an underlying basis. Underlying basis: The statutory results are adjusted for certain items which are listed below, to allow a comparison of the Group’s underlying performance. − restructuring, including severance-related costs, the rationalisation of the non-branch property portfolio, the
establishment of the Schroders strategic partnership, the integration of MBNA and Zurich’s UK workplace pensions and savings business;
− volatility and other items, which includes the effects of certain asset sales, the volatility relating to the Group’s hedging arrangements and that arising in the insurance businesses, insurance gross up, the unwind of acquisition-related fair value adjustments and the amortisation of purchased intangible assets;
− payment protection insurance provisions.
Unless otherwise stated, income statement commentaries throughout this document compare the nine months ended 30 September 2019 to the nine months ended 30 September 2018, and the balance sheet analysis compares the Group balance sheet as at 30 September 2019 to the Group balance sheet as at 31 December 2018.
Alternative performance measures: The Group uses a number of alternative performance measures, including underlying profit, in the discussion of its business performance and financial position. There have been no changes to the definitions used by the Group; further information on these measures is set out on page 112 of the Group’s 2019 Half-Year Results News Release.
Capital: The Q3 2019 Interim Pillar 3 Report can be found at: http://www.lloydsbankinggroup.com/investors/financial-performance/
FORWARD LOOKING STATEMENTS
This document contains certain forward looking statements with respect to the business, strategy, plans and/or results of the Group and its current
goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about
the Group's or its directors' and/or management's beliefs and expectations, are forward looking 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 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 Group'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; the ability to achieve strategic objectives; changing customer behaviour including
consumer spending, saving and borrowing habits; changes to borrower or counterparty credit quality; concentration of financial exposure;
management and monitoring of conduct risk; 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 as a result of such exit and 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; 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 and other disasters, adverse weather and similar
contingencies outside the Group'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, geopolitical, pandemic or other such events; risks relating to climate change; changes in laws, regulations,
practices and accounting standards or taxation, including as a result of the exit by the UK from the EU, or a further possible referendum on Scottish
independence; changes to regulatory capital or liquidity requirements and similar contingencies outside the Group'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 legislation and regulation together with any resulting impact on the future structure of the Group; the ability to attract and retain
senior management and other employees and meet its diversity objectives; actions or omissions by the Group's directors, management or
employees including industrial action; changes to the 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 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 with the US Securities and Exchange Commission for a discussion of certain factors and risks together with
examples of forward looking statements. Except as required by any applicable law or regulation, the forward looking statements contained in this
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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.
Q3
INTE
RIM
MA
NA
GEM
ENT
STA
TEM
ENT
Pres
enta
tion
to a
naly
sts
and
inve
stor
s |
31
Oct
ober
201
9
1
Solid
fina
ncia
l per
form
ance
in a
cha
lleng
ing
envi
ronm
ent
Net i
ncom
e£1
3.0b
n(3)%
Retu
rn o
n ta
ngib
le e
quity
6.8%
(6.2)pp
Earn
ings
per
sha
re2.
2p(53)%
Stat
utor
y pr
ofit
befo
re ta
x£2
.9bn
(40)%
Unde
rlyin
g pr
ofit
£6.0
bn(5)%
Cost
:inco
me
ratio
(incl
. rem
edia
tion)
46.5
%(1.0)pp
•St
atut
ory
prof
it be
fore
tax
of £
2.9b
n fo
r the
nin
e m
onth
s, d
own
40%
, si
gnifi
cant
ly im
pact
ed b
y ad
ditio
nal P
PI c
harg
e of
£1.
8bn
in Q
3•
Unde
rlyin
g pr
ofit
of £
6.0b
n, d
own
5%, w
ith u
nder
lyin
g Ro
TE o
f 15.
7%
-N
et in
com
e of
£13
.0bn
, 3%
low
er, w
ith N
IM o
f 289
bps
-C
ontin
ued
redu
ctio
n in
tota
l cos
ts, d
own
5%, w
ith B
AU c
osts
dow
n 6%
an
d co
st:in
com
e ra
tio fu
rther
impr
oved
to 4
6.5%
-C
redi
t qua
lity
rem
ains
stro
ng; n
et A
QR
incr
ease
d to
29b
ps in
clud
ing
a
sing
le la
rge
corp
orat
e ch
arge
in Q
3
•St
atut
ory
RoTE
of 6
.8%
and
TNA
V do
wn
1.0p
on
year
end
to 5
2.0p
•Fr
ee c
apita
l bui
ld o
f 149
bps,
bef
ore
121b
ps P
PI im
pact
of w
hich
88
bps
in Q
3•
Furth
er 1
0bps
redu
ctio
n in
Pill
ar 2
A w
ith C
ET1
targ
et m
aint
aine
d at
c.12
.5%
plu
s a
man
agem
ent b
uffe
r of c
.1%
•Co
ntin
ue to
targ
et a
pro
gres
sive
and
sus
tain
able
ord
inar
y di
vide
ndFr
ee c
apita
l bui
ld
(p
re-P
PI)
149b
ps
Q3
2019
Yea
r to
date
2
Solid
fina
ncia
l per
form
ance
: ong
oing
cos
t red
uctio
n co
ntin
ues
to p
artly
offs
et
inco
me
pres
sure
in a
cha
lleng
ing
rate
env
ironm
ent
Oth
er in
com
e(£bn)
Net
inte
rest
inco
me
(£m)
Ope
ratin
g co
sts
(£m)
•N
et in
com
e of
£13
.0bn
yea
r to
date
, dow
n 3%
-N
II do
wn
with
slig
htly
low
er A
IEAs
and
NIM
of 2
.89%
(2
.88%
in Q
3); e
xpec
t 201
9 m
argi
n of
2.8
8%
-O
ther
inco
me
of £
4.4b
n do
wn
4% im
pact
ed b
y lo
wer
cl
ient
act
ivity
in C
omm
erci
al m
arke
ts a
nd lo
wer
gilt
sal
es
•C
ontin
ued
redu
ctio
n in
ope
ratin
g co
sts,
dow
n 3%
, with
co
st:in
com
e ra
tio fu
rthe
r im
prov
ed to
46.
5%
•N
ow e
xpec
t ope
ratin
g co
sts
less
than
£7.
9bn
in 2
019
2.93
%5b
ps2b
ps(1
1)bp
s2.
89%
(403
)
148
(14)
9,27
5
9,54
4
Liab
ility
sp
read
& m
ixA
sset
spr
ead
& m
ixQ
3 20
18Y
TDW
hole
sale
fu
ndin
g &
oth
er1
Q3
2019
YTD
(3)%
1.3
1.5
Q3
2018
Q3
2019
5,81
7
6,01
4
82
(277
)
78
(80)
(3)%
Pay
&in
flatio
nQ
3 20
18Y
TD2
Oth
erQ
3 20
19Y
TDC
ost
savi
ngs
Inve
stm
ent &
depr
ecia
tion
4.4
4.6
Q3
2018
YTD
Q3
2019
YTD
1 –
Oth
er in
clud
es n
on-b
anki
ng n
et in
tere
st in
com
e.
2 –
Q3
2018
adj
uste
d to
refle
ct th
e im
pact
of I
FRS
16.
3
Lo
w r
isk b
usin
ess m
od
el w
ith
pru
de
nt
pa
rtic
ipa
tio
n c
ho
ice
s:
un
de
rlyin
g c
red
it
qu
alit
y r
em
ain
s s
tro
ng
Asset qualit
y r
atio
(bps)
•G
ross
AQ
R in
Q3
of 4
0bps
with
net
AQ
R of
33b
ps, b
oth
impa
cted
by
a si
ngle
larg
e co
rpor
ate
char
ge a
nd lo
wer
us
ed c
ar p
rices
-A
QR
s r
em
ain
low
in r
ecent quart
ers
exclu
din
g the larg
e
sin
gle
nam
e c
harg
es
•Un
derly
ing
cred
it qu
ality
rem
ains
stro
ng th
ough
ec
onom
ic u
ncer
tain
ty p
ersi
sts
-Low
avera
ge R
eta
il m
ort
gage L
TV
of 44%
with s
table
new
to a
rrears
; avera
ge L
TV
of new
busin
ess 6
4%
and
c.9
0%
of port
folio
has L
TV
£80%
-P
rim
e c
redit c
ard
book; new
to a
rrears
rem
ain
ing low
-M
oto
r finance p
redom
inantly s
ecure
d a
nd s
ubje
ct to
pru
dent assum
ptions a
nd p
rovis
ionin
g
-D
ivers
ifie
d, hig
h q
ualit
y C
om
merc
ial book
•Co
ntin
ue to
exp
ect 2
019
net A
QR
of le
ss th
an 3
0bps
Mort
gages a
nd c
redit c
ard
s –
new
to a
rrears
as p
roport
ion
of to
tal book
Mo
rtg
ag
es
Cre
dit c
ard
s
0.0
%
0.5
%
1.0
%
1.5
%
2.0
%
20
13
20
14
20
15
20
16
20
17
20
18
20
19
Q3
20
19
Ne
t A
QR
Gro
ss A
QR
Q1
20
19
Q4
20
18
Q3
20
18
Q2
20
19
La
rge
sin
gle
na
me
ch
arg
es
Q3
20
19
Q1
20
19
Q4
20
18
Q3
20
18
Q2
20
19
33
40
27
38
30
30
30
28
22
10
18
25
18
25
17
15
10
18
4
So
lid
pro
fits
an
d r
etu
rns w
ith
sta
tuto
ry p
erf
orm
an
ce
im
pa
cte
d b
y a
dd
itio
na
l P
PI
ch
arg
e in
Q3
•Un
derly
ing
prof
it of
£6.
0bn,
dow
n 5%
•Re
stru
ctur
ing
cost
s lo
wer
due
to c
ompl
etio
n of
M
BNA
mig
ratio
n an
d rin
g-fe
ncin
g; in
clud
es
seve
ranc
e an
d in
itial
cos
ts fo
r Sch
rode
rs J
V
•Vo
latil
ity a
nd o
ther
item
s in
clud
es a
dver
se
mov
emen
ts in
ban
king
vol
atili
ty a
nd th
e H1
ch
arge
rela
ting
to c
hang
e in
ass
et m
anag
er
•PP
I cha
rge
of £
1.8b
n in
Q3:
ass
essm
ent o
f PIR
vo
lum
es n
ow c
ompl
ete;
PIR
con
vers
ion
rem
ains
lo
w, a
vera
ging
aro
und
10%
•St
atut
ory
prof
it be
fore
tax
of £
2.9b
n, d
own
40%
•Hi
gher
effe
ctiv
e ta
x ra
te o
f 33%
due
to P
PI
•St
rong
und
erly
ing
RoTE
of 1
5.7%
; sta
tuto
ry R
oTE
of 6
.8%
impa
cted
by
PPI
(£m
)Q
3 20
19
YTD
Q3
2018
YT
DCh
ange
Unde
rlyin
g pr
ofit
6,01
66,3
03
(5)%
Restr
uctu
ring
(280
)(6
12)
54%
Vola
tility
and o
ther
item
s(3
39)
(207)
(64)%
PP
I(2
,450
)(5
50)
Stat
utor
y pr
ofit
befo
re ta
x2,
947
4,9
34
(40)%
Tax e
xpense
1(9
60)
(1,1
94)
20%
Stat
utor
y pr
ofit
afte
r tax
11,
987
3,7
40
(47)%
Effective tax r
ate
33%
24%
9pp
Underlyin
g R
oT
E15
.7%
16.2
%(0.5)pp
Sta
tuto
ry R
oT
E6.
8%13.0
%(6.2)pp
1 –
Com
para
tive r
esta
ted t
o r
eflect
IAS
12.
5
Bal
ance
she
et: o
ngoi
ng g
row
th in
targ
eted
seg
men
ts w
hile
con
tinui
ng to
opt
imis
e th
e po
rtfol
io
•Pr
uden
t len
ding
gro
wth
in ta
rget
ed s
egm
ents
-O
pen
mor
tgag
e bo
ok u
p £6
.1bn
on
Q2
due
to £
3.7b
n Te
sco
portf
olio
acq
uisi
tion
and
stro
ng o
rgan
ic g
row
th o
f £2
.4bn
, tak
ing
adva
ntag
e of
impr
oved
mar
ket p
ricin
g
-Te
sco
acqu
isiti
on p
rovi
des
parti
cipa
tion
flexi
bilit
y; to
tal
open
boo
k ex
pect
ed to
end
201
9 ah
ead
of 2
018
-C
ontin
ued
year
on
year
gro
wth
in S
ME
1(u
p 2%
) and
M
otor
Fin
ance
(up
8%)
•Co
ntin
ue to
targ
et c
urre
nt a
ccou
nt b
alan
ces,
redu
ce
tact
ical
bal
ance
s an
d op
timis
e m
ix
-C
urre
nt a
ccou
nt b
alan
ces
up £
3bn
on Q
3 20
18 w
ith
cont
inue
d gr
owth
in P
CA
ahea
d of
the
mar
ket
-H
edge
able
bal
ance
£18
5bn,
with
c.£
13bn
unu
sed
•RW
As u
p £3
bn o
n ye
ar e
nd w
ith o
ptim
isat
ion
of
Com
mer
cial
par
tly o
ffset
ting
impa
ct o
f IFR
S 16
and
in
crea
se in
Ret
ail,
incl
udin
g th
e Te
sco
acqu
isiti
on
1 –
Incl
udes
Ret
ail B
usin
ess
Ban
king
.
Loan
s an
d ad
vanc
es(£bn)
Liab
ility
mix
(£bn)
SM
E &
Mid
Mar
kets
1
Ope
n m
ortg
age
book
Oth
erC
omm
erci
al o
ther
Ret
ail o
ther
Clo
sed
mor
tgag
e bo
ok
Wea
lth
Ret
ail &
CB
cur
rent
acc
ount
s
Ret
ail t
actic
al a
nd o
ther
Com
mer
cial
dep
osits
Ret
ail r
elat
ions
hip
Q2
2019
Q3
2019
Q3
2018
445
44144
7
Q2
2019
Q3
2019
Q3
2018
422
418
419
271
265
267
19 20 22
52 52 50
63 63 62
39 39 39
111
110
108
144
144
146
136
133
135
14 14 14
14 17 19
6
Con
tinue
d ro
bust
cap
ital b
uild
exc
ludi
ng P
PI; l
ower
Pilla
r 2A
with
cap
ital t
arge
t m
aint
aine
d
Com
mon
equ
ity ti
er 1
ratio
(%)
Und
erly
ing
build
FY 2018
Div
iden
dac
crua
lQ
320
19
1.48
(0.9
1)13
.5
+149
bps
(0.1
1)
0.12
IFR
S16
Mar
ket
mov
emen
tsan
d ot
her1
(1.2
1)
PP
I
+28b
ps
0.34
Can
cel
buyb
ack
15.4
Gro
up c
apita
l stru
ctur
e(%)13
.9
Tesc
obo
ok
(0.0
9)
•Fr
ee c
apita
l bui
ld Y
TD o
f 149
bps
pre-
PP
I; 28
bps
afte
r P
PI c
harg
es
•C
ET1
13.
5% a
fter
div
iden
d ac
crua
l and
PP
I; in
clud
es 3
4bps
from
buy
back
can
cella
tion
and
9bps
use
d fo
r Te
sco
acqu
isiti
on
•c.
75bp
s fr
ee c
apita
l bui
ld n
ow e
xpec
ted
for
2019
, aft
er P
PI
•P
illar
2A
dow
n 10
bps
in Q
3 to
2.6
%
•M
aint
aine
d C
ET1
targ
et o
f aro
und
12.5
%
plus
a m
anag
emen
t buf
fer
of a
roun
d 1%
-C
apita
l tar
get 5
0bps
low
er Y
oY
•C
ontin
ue to
targ
et a
pro
gres
sive
and
su
stai
nabl
e or
dina
ry d
ivid
end
Cou
nter
cycl
ical
Buffe
r
Pilla
r 1
Hea
droo
m in
clud
ing
Man
agem
ent B
uffe
r
Syst
emic
Ris
k Bu
ffer
Cap
ital C
onse
rvat
ion
Buffe
r
Pilla
r 2A
4.5
2.6
2.5
0.9
1.7
>1
Cap
ital t
arge
t c.1
2.5%
+ c
.1%
1 –
Incl
udes
impa
ct o
f pen
sion
con
tribu
tions
and
favo
urab
le R
WA,
mar
ket a
nd o
ther
mov
emen
ts.
7
OU
R
PU
RP
OS
E
Help
ing
Brita
in
Pros
per
OU
R
AIM
OU
R
BU
SIN
ES
S
MO
DE
L
Digi
tised
, sim
ple
,
low
ris
k, custo
mer
focused, U
K
finan
cial
ser
vice
s pr
ovid
er
Best
ban
k fo
r cu
stom
ers,
co
lleag
ues
and
shar
ehol
ders
Str
on
g s
tra
teg
ic p
rog
ress a
nd
so
lid
fin
an
cia
l p
erf
orm
an
ce
po
sitio
n t
he
Gro
up
we
ll
•St
rong
str
ateg
ic p
rogr
ess
and
the
right
str
ateg
y in
the
curr
ent
chal
leng
ing
mar
ket e
nviro
nmen
t
•B
usin
ess
mod
el re
silie
nce
refle
cted
in 2
019
guid
ance
-N
IM e
xpecte
d to b
e 2
88bps a
nd A
QR
less than 3
0bps
-O
pera
ting c
osts
now
expecte
d to b
e less than £
7.9
bn, ahead o
f pre
vio
us
guid
ance, w
ith c
ost:in
com
e r
atio low
er
than 2
018
-F
ree c
apital build n
ow
expecte
d to b
e c
.75bps a
fter
PP
I charg
es
-C
ontinue to targ
et a p
rogre
ssiv
e a
nd s
usta
inable
ord
inary
div
idend
•C
ontin
ued
econ
omic
unc
erta
inty
cou
ld fu
rthe
r im
pact
the
outlo
ok
•M
aint
ain
focu
s on
pru
dent
gro
wth
and
redu
cing
cos
ts, w
hils
t fu
rthe
r inv
estin
g in
the
busi
ness
•W
ell p
lace
d to
sup
port
cus
tom
ers
and
cont
inue
to H
elp
Brit
ain
Pros
per
8
Forw
ard
look
ing
stat
emen
ts a
nd b
asis
of p
rese
ntat
ion
Forw
ard
look
ing
stat
emen
tsTh
is d
ocum
ent c
onta
ins
certa
in fo
rwar
d lo
okin
g st
atem
ents
with
resp
ect t
o th
e bu
sine
ss, s
trate
gy, p
lans
and
/or r
esul
ts o
f Llo
yds
Ban
king
Gro
up p
lc to
geth
er w
ith it
s su
bsid
iarie
s (th
e G
roup
) an
d its
cur
rent
goa
ls a
nd e
xpec
tatio
ns re
latin
g to
its
futu
re fi
nanc
ial c
ondi
tion
and
perfo
rman
ce. S
tate
men
ts th
at a
re n
ot h
isto
rical
fact
s, in
clud
ing
stat
emen
ts a
bout
the
Gro
up's
or i
ts d
irect
ors'
an
d/or
man
agem
ent's
bel
iefs
and
exp
ecta
tions
, are
forw
ard
look
ing
stat
emen
ts. B
y th
eir n
atur
e, fo
rwar
d lo
okin
g st
atem
ents
invo
lve
risk
and
unce
rtain
ty b
ecau
se th
ey re
late
to e
vent
s an
d de
pend
upo
n ci
rcum
stan
ces
that
will
or m
ay o
ccur
in th
e fu
ture
. Fac
tors
that
cou
ld c
ause
act
ual b
usin
ess,
stra
tegy
, pla
ns a
nd/o
rres
ults
(inc
ludi
ng b
ut n
ot li
mite
d to
the
paym
ent o
f div
iden
ds)
to d
iffer
mat
eria
lly fr
om fo
rwar
d lo
okin
g st
atem
ents
mad
e by
the
Gro
up o
r on
its b
ehal
f inc
lude
, but
are
not
lim
ited
to: g
ener
alec
onom
ic a
nd b
usin
ess
cond
ition
s in
the
UK
and
inte
rnat
iona
lly;
mar
ket r
elat
ed tr
ends
and
dev
elop
men
ts; f
luct
uatio
ns in
inte
rest
rate
s, in
flatio
n, e
xcha
nge
rate
s, s
tock
mar
kets
and
cur
renc
ies;
any
impa
ct o
f the
tran
sitio
n fro
m IB
OR
s to
alte
rnat
ive
refe
renc
e ra
tes;
the
abilit
y to
acc
ess
suffi
cien
t sou
rces
of c
apita
l, liq
uidi
ty a
nd fu
ndin
g w
hen
requ
ired;
cha
nges
to th
e G
roup
's c
redi
t rat
ings
; the
abi
lity
to d
eriv
e co
st s
avin
gs a
nd o
ther
ben
efits
incl
udin
g,
but w
ithou
t lim
itatio
n as
a re
sult
of a
ny a
cqui
sitio
ns, d
ispo
sals
and
oth
er s
trate
gic
trans
actio
ns; t
he a
bilit
y to
ach
ieve
stra
tegi
c ob
ject
ives
; cha
ngin
g cu
stom
er b
ehav
iour
incl
udin
g co
nsum
er
spen
ding
, sav
ing
and
borro
win
g ha
bits
; cha
nges
to b
orro
wer
or c
ount
erpa
rty c
redi
t qua
lity;
con
cent
ratio
n of
fina
ncia
l exp
osur
e; m
anag
emen
t and
mon
itorin
g of
con
duct
risk
; ins
tabi
lity
in th
e gl
obal
fina
ncia
l mar
kets
, inc
ludi
ng E
uroz
one
inst
abilit
y, in
stab
ility
as a
resu
lt of
unc
erta
inty
sur
roun
ding
the
exit
by th
e U
K fro
m th
e Eu
rope
an U
nion
(EU
) and
as
a re
sult
of s
uch
exit
and
the
pote
ntia
l for
oth
er c
ount
ries
to e
xit t
he E
U o
r the
Eur
ozon
e an
d th
e im
pact
of a
ny s
over
eign
cre
dit r
atin
g do
wng
rade
or o
ther
sove
reig
n fin
anci
al is
sues
; pol
itica
l ins
tabi
lity
incl
udin
g as
a re
sult
of a
ny U
K ge
nera
l ele
ctio
n; te
chno
logi
cal c
hang
es a
nd ri
sks
to th
e se
curit
y of
IT a
nd o
pera
tiona
l inf
rast
ruct
ure,
sys
tem
s, d
ata
and
info
rmat
ion
resu
lting
from
incr
ease
d th
reat
of c
yber
and
oth
er
atta
cks;
nat
ural
, pan
dem
ic a
nd o
ther
dis
aste
rs, a
dver
se w
eath
er a
nd s
imila
r con
tinge
ncie
s ou
tsid
e th
e G
roup
's c
ontro
l; in
adeq
uate
or f
aile
d in
tern
al o
r ext
erna
l pro
cess
es o
r sys
tem
s; a
cts
of
war
, oth
er a
cts
of h
ostil
ity, t
erro
rist a
cts
and
resp
onse
s to
thos
e ac
ts, g
eopo
litic
al, p
ande
mic
or o
ther
suc
h ev
ents
; ris
ks re
latin
g to
clim
ate
chan
ge; c
hang
es in
law
s, re
gula
tions
, pra
ctic
es a
nd
acco
untin
g st
anda
rds
or ta
xatio
n, in
clud
ing
as a
resu
lt of
the
exit
by th
e U
K fro
m th
e EU
, or a
furth
er p
ossi
ble
refe
rend
um o
n Sc
ottis
h in
depe
nden
ce; c
hang
es to
regu
lato
ry c
apita
l or l
iqui
dity
re
quire
men
ts a
nd s
imila
r con
tinge
ncie
s ou
tsid
e th
e G
roup
's c
ontro
l; th
e po
licie
s, d
ecis
ions
and
act
ions
of g
over
nmen
tal o
r reg
ulat
ory
auth
oriti
es o
r cou
rts in
the
UK,
the
EU, t
he U
S or
el
sew
here
incl
udin
g th
e im
plem
enta
tion
and
inte
rpre
tatio
n of
key
legi
slat
ion
and
regu
latio
n to
geth
er w
ith a
ny re
sulti
ng im
pact
on
the
futu
re s
truct
ure
of th
e G
roup
; the
abi
lity
to a
ttrac
t and
reta
in
seni
or m
anag
emen
t and
oth
er e
mpl
oyee
s an
d m
eet i
ts d
iver
sity
obj
ectiv
es; a
ctio
ns o
r om
issi
ons
by th
e G
roup
's d
irect
ors,
man
agem
ent o
r em
ploy
ees
incl
udin
g in
dust
rial a
ctio
n; c
hang
es to
the
Gro
up's
pos
t-ret
irem
ent d
efin
ed b
enef
it sc
hem
e ob
ligat
ions
; the
ext
ent o
f any
futu
re im
pairm
ent c
harg
es o
r writ
e-do
wns
cau
sed
by, b
ut n
ot li
mite
d to
, dep
ress
ed a
sset
val
uatio
ns, m
arke
t di
srup
tions
and
illiq
uid
mar
kets
; the
val
ue a
nd e
ffect
iven
ess
of a
ny c
redi
t pro
tect
ion
purc
hase
d by
the
Gro
up; t
he in
abilit
y to
hed
ge c
erta
in ri
sks
econ
omic
ally
; the
ade
quac
y of
loss
rese
rves
; th
e ac
tions
of c
ompe
titor
s, in
clud
ing
non-
bank
fina
ncia
l ser
vice
s, le
ndin
g co
mpa
nies
and
dig
ital i
nnov
ator
s an
d di
srup
tive
tech
nolo
gies
; and
exp
osur
e to
regu
lato
ry o
r com
petit
ion
scru
tiny,
le
gal,
regu
lato
ry o
r com
petit
ion
proc
eedi
ngs,
inve
stig
atio
ns o
r com
plai
nts.
Ple
ase
refe
r to
the
late
st A
nnua
l Rep
ort o
n Fo
rm 2
0-F
filed
with
the
US
Secu
ritie
s an
d Ex
chan
ge C
omm
issi
on fo
r a
disc
ussi
on o
f cer
tain
fact
ors
and
risks
toge
ther
with
exa
mpl
es o
f for
war
d lo
okin
g st
atem
ents
. Exc
ept a
s re
quire
d by
any
app
licab
le la
w o
r reg
ulat
ion,
the
forw
ard
look
ing
stat
emen
ts c
onta
ined
in
this
doc
umen
t are
mad
e as
of t
oday
's d
ate,
and
the
Gro
up e
xpre
ssly
dis
clai
ms
any
oblig
atio
n or
und
erta
king
to re
leas
e pu
blic
ly a
ny u
pdat
es o
r rev
isio
ns to
any
forw
ard
look
ing
stat
emen
ts
cont
aine
d in
this
doc
umen
t to
refle
ct a
ny c
hang
e in
the
Gro
up’s
exp
ecta
tions
with
rega
rd th
eret
o or
any
cha
nge
in e
vent
s, c
ondi
tions
or c
ircum
stan
ces
on w
hich
any
suc
h st
atem
ent i
s ba
sed.
Th
e in
form
atio
n, s
tate
men
ts a
nd o
pini
ons
cont
aine
d in
this
doc
umen
t do
not c
onst
itute
a p
ublic
offe
r und
er a
ny a
pplic
able
law
oran
offe
r to
sell
any
secu
ritie
s or
fina
ncia
l ins
trum
ents
or a
ny
advi
ce o
r rec
omm
enda
tion
with
resp
ect t
o su
ch s
ecur
ities
or f
inan
cial
inst
rum
ents
.
Bas
is o
f pre
sent
atio
nTh
e re
sults
of t
he G
roup
and
its
busi
ness
are
pre
sent
ed in
this
pre
sent
atio
n on
an
unde
rlyin
g ba
sis.
The
prin
cipl
es a
dopt
ed in
the
prep
arat
ion
of th
e un
derly
ing
basi
s of
repo
rting
are
set
out
w
ithin
the
2019
Q3
Inte
rim M
anag
emen
t Sta
tem
ent (
Q3
IMS)
. Thi
s pr
esen
tatio
n is
der
ived
from
the
Q3
IMS
and
read
ers
of th
is p
rese
ntat
ion
shou
ld re
fer t
o th
e Q
3 IM
S fo
r the
und
erly
ing
info
rmat
ion.
LLOYDS BANKING GROUP PLC Q3 2019 INTERIM MANAGEMENT STATEMENT
CONTACTS
For further information please contact:
INVESTORS AND ANALYSTS
Douglas Radcliffe
Group Investor Relations Director
020 7356 1571
Edward Sands
Director of Investor Relations
020 7356 1585
Nora Thoden
Director of Investor Relations
020 7356 2334
CORPORATE AFFAIRS
Grant Ringshaw
External Relations Director
020 7356 2362
Matt Smith
Head of Media Relations
020 7356 3522
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 Banking Group plc, The Mound, Edinburgh, EH1 1YZ
Registered in Scotland No. 95000