TIDM94WP TIDMLLOY
RNS Number : 8978W
Lloyds Bank PLC
28 April 2021
Lloyds Bank plc
Q1 2021 Interim Management Statement
28 April 2021
REVIEW OF PERFORMANCE
Income statement
In the three months to 31 March 2021, the Group recorded a
profit before tax of GBP1,768 million compared to GBP404 million in
the same period in 2020, representing an increase of GBP1,364
million largely reflecting the improved economic outlook for the UK
in the current quarter compared to the deterioration assumed in the
first quarter of 2020. Profit after tax was GBP1,283 million.
Total income decreased by GBP258 million, or 7 per cent, to
GBP3,644 million in the three months to 31 March 2021 compared to
GBP3,902 million in the first three months of 2020; there was a
decrease of GBP229 million in net interest income and GBP29 million
a decrease in other income.
Net interest income was down GBP229 million, or 8 per cent, to
GBP2,656 million compared to GBP2,885 million in the first three
months of 2020. The net interest margin reduced as a result of the
lower rate environment. Average interest-earning assets increased
driven by growth in the open mortgage book and an increase in
government-backed lending, partially offset by lower balances in
unsecured personal loans, credit cards and motor finance, as well
as the effects of the continued optimisation of the Corporate and
Institutional book within Commercial Banking.
Other income was GBP29 million lower at GBP988 million in the
three months to 31 March 2021 compared to GBP1,017 million in the
same period last year; there was a fall in net fee and commission
income as reduced card and other transaction-based income streams
reflecting lower levels of customer activity driven by the
coronavirus pandemic were only partly offset by some increase in
commercial banking fees. Other operating income also decreased due
to lower levels of operating lease rental income as a result of the
reduced Lex Autolease vehicle fleet size and lower gains on the
disposal of financial assets at fair value through other
comprehensive income.
Total operating expenses increased by GBP25 million to GBP2,212
million compared to GBP2,187 million in the first three months of
2020. There was an increase of GBP41 million in operating costs
reflecting higher restructuring costs, primarily technology
research and development costs and severance, as well as slightly
higher property transformation costs. These were partially offset
by a reduction in depreciation of tangible fixed assets due to the
reduced Lex Autolease vehicle fleet size. Staff costs were little
changed. The charge in respect of regulatory provisions was GBP16
million lower at GBP64 million and related to pre-existing
programmes.
As highlighted in the 2020 results, in relation to HBOS Reading,
decisions from the independent panel re-review on direct and
consequential losses will start to be issued during 2021. This is
likely to result in further charges but it is not possible to
estimate the potential impact at this stage.
There was a net release of expected credit loss allowances
(ECLs) in the quarter of GBP336 million, compared to a charge of
GBP1,311 million in the first quarter of 2020, largely reflecting
the improved UK economic outlook.
The ECL allowance in respect of loans and advances to customers
remains high by historical standards at GBP5,174 million, a
coverage ratio of 1.1 per cent. This is consistent with the Group's
updated macroeconomic projections. It assumes that a large
proportion of expected losses will crystallise over the next 12 to
18 months as support measures subside and unemployment
increases.
Credit performance has remained stable in the quarter, with the
flow of assets into arrears, defaults and write-offs remaining at
low levels in part due to the continued effectiveness of support
schemes, including the Coronavirus Job Retention Scheme and payment
holidays extended by the Group which have now largely matured. The
Group has maintained judgemental ECL allowances in respect of
losses assumed to have been suppressed over the last 12 months by
support schemes, given that cumulative losses remain lower than
would have ordinarily been anticipated.
The Group's GBP400 million central overlay has been maintained.
It was added at the year end in recognition of the significant
uncertainty with regard to the efficacy of the vaccine, the
vaccination rollout, potential virus mutations and economic
performance post lockdown restrictions and Government support.
Although the base case outlook has improved in the first quarter,
the Group still considers these risks to remain and that the
conditioning assumptions for the base case and associated scenarios
around this do not necessarily capture these unprecedented
risks.
REVIEW OF PERFORMANCE (continued)
The Group recognised a tax expense of GBP485 million in the
period compared to a credit of GBP396 million in the first three
months of 2020. The prior year credit included an uplift in
deferred tax assets following the announcement by the UK Government
that it would maintain the corporation tax rate at 19 per cent. On
3 March 2021, the Government announced its intention to increase
the rate of corporation tax from 19 per cent to 25 per cent with
effect from 1 April 2023. Had this change in corporation tax rate
been substantively enacted at 31 March 2021, the impact would have
been to recognise a c.GBP1.25 billion deferred tax credit in the
income statement and a c.GBP150 million debit within other
comprehensive income, increasing the Group's net deferred tax asset
by c.GBP1.1 billion.
Balance sheet
Total assets were GBP4,536 million higher at GBP604,475 million
at 31 March 2021 compared to GBP599,939 million at 31 December
2020. There was an increase in cash and balances at central banks
which were GBP11,805 million higher at GBP61,693 million reflecting
increased liquidity holdings. Partly offsetting this, financial
assets at amortised cost decreased by GBP1,917 million, to
GBP490,049 million at 31 March 2021 compared to GBP491,966 million
at 31 December 2020, as a result of a GBP4,861 million decrease in
bank and customer reverse repurchase agreement balances. Other
loans and advances to customers, net of impairment allowances, were
GBP3,227 million higher as increases in the open mortgage book,
motor finance and SME lending were only partially offset by
reductions in the closed mortgage book, other retail balances and
larger corporate lending. Derivative assets were GBP1,680 million
lower at GBP6,661 million compared to GBP8,341 million at 31
December 2020, reflecting reduced volumes and movements in interest
and exchange rates over the first three months of 2021.
Total liabilities were GBP4,380 million higher at GBP563,201
million compared to GBP558,821 million at 31 December 2020.
Customer deposits increased by GBP11,804 million, or 3 per cent, to
GBP446,373 million compared to GBP434,569 million at 31 December
2020, as a result of growth in retail current and savings accounts
and commercial deposits. This increase was partly offset by a
reduction in deposits from banks which were GBP3,408 million lower
at GBP21,589 million, reflecting the reduced need for wholesale
funding following further growth in customer deposits, and in
derivative liabilities which were GBP1,863 million lower.
Shareholders' equity was little changed at GBP35,259 million as
profit retentions were largely offset by movements in the cash flow
hedging reserve.
Capital
The Group's Common equity tier 1 (CET1) capital ratio has
increased from 15.5 per cent at 31 December 2020 to 16.1 per
cent(1) at 31 March 2021, primarily as a result of profit for the
period and a reduction in risk-weighted assets, partially offset by
pension contributions. The tier 1 capital ratio increased from 19.8
per cent at 31 December 2020 to 20.0 per cent(1) at 31 March 2021
and the total capital ratio increased from 23.5 per cent at 31
December 2020 to 23.9 per cent(1) at 31 March 2021, reflecting the
increase in CET1 capital and the reduction in risk-weighted assets,
partially offset by the annual reduction in transitional limits
applied to legacy tier 1 and tier 2 instruments. The total capital
ratio also reflects the issuance of a new tier 2 capital instrument
in the quarter.
Risk-weighted assets reduced by GBP2.7 billion, or 2 per cent,
to GBP168.2 billion at 31 March 2021, compared to GBP170.9 billion
at 31 December 2020, primarily driven by optimisation activity
undertaken in Commercial Banking.
The Group's UK leverage ratio increased from 5.5 per cent at 31
December 2020 to 5.6 per cent(1) at 31 March 2021.
(1) Incorporating profits for the period that remain subject to
formal verification in accordance with the Capital Requirements
Regulation.
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Three months Three months
ended 31 ended 31
Mar 2021 Mar 2020
GBPm GBPm
Net interest income 2,656 2,885
Other income 988 1,017
------------ ------------
Total income 3,644 3,902
Total operating expenses (2,212) (2,187)
Impairment 336 (1,311)
------------ ------------
Profit before tax 1,768 404
Tax (expense) credit (485) 396
------------ ------------
Profit for the period 1,283 800
------------ ------------
Profit attributable to ordinary shareholders 1,176 685
Profit attributable to other equity holders 102 104
------------ ------------
Profit attributable to equity holders 1,278 789
Profit attributable to non-controlling interests 5 11
------------ ------------
Profit for the period 1,283 800
------------ ------------
CONDENSED CONSOLIDATED BALANCE SHEET
At 31 Mar At 31 Dec
2021 2020
GBPm GBPm
(unaudited) (audited)
Assets
Cash and balances at central banks 61,693 49,888
Financial assets at fair value through profit
or loss 1,276 1,674
Derivative financial instruments 6,661 8,341
----------- ---------
Loans and advances to banks 6,003 5,950
Loans and advances to customers 478,350 480,141
Debt securities 4,829 5,137
Due from fellow Lloyds Banking Group undertakings 867 738
----------- ---------
Financial assets at amortised cost 490,049 491,966
Financial assets at fair value through other comprehensive
income 22,979 27,260
Other assets 21,817 20,810
----------- ---------
Total assets 604,475 599,939
----------- ---------
Liabilities
Deposits from banks 21,589 24,997
Customer deposits 446,373 434,569
Due to fellow Lloyds Banking Group undertakings 5,854 6,875
Financial liabilities at fair value through profit
or loss 6,775 6,831
Derivative financial instruments 6,365 8,228
Debt securities in issue 57,105 59,293
Subordinated liabilities 10,049 9,242
Other liabilities 9,091 8,786
----------- ---------
Total liabilities 563,201 558,821
Ordinary shareholders' equity 35,259 35,105
Other equity instruments 5,935 5,935
Non-controlling interests 80 78
----------- ---------
Total equity 41,274 41,118
----------- ---------
Total equity and liabilities 604,475 599,939
----------- ---------
ADDITIONAL FINANCIAL INFORMATION
1. Basis of presentation
This release covers the results of Lloyds Bank plc (the Bank)
together with its subsidiaries (the Group) for the three months
ended 31 March 2021.
Accounting policies
The accounting policies are consistent with those applied by the
Group in its 2020 Annual Report and Accounts.
2. Capital
Capital and leverage ratios reported as at 31 March 2021
incorporate profits for the three months that remain subject to
formal verification in accordance with the Capital Requirements
Regulation. The Group's Q1 2021 Interim Pillar 3 Report can be
found at:
https://www.lloydsbankinggroup.com/investors/financial-downloads.html
3. UK economic assumptions
Base case scenario by quarter
Key quarterly assumptions made by the Group are shown below.
Gross domestic product is presented quarter on quarter, house price
growth and commercial real estate growth is presented year on
year.
First Second Third Fourth First Second Third Fourth
quarter quarter quarter quarter quarter quarter quarter quarter
2021 2021 2021 2021 2022 2022 2022 2022
% % % % % % % %
Gross domestic product (1.6) 3.7 1.5 1.2 1.4 0.9 0.5 0.4
UK Bank Rate 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
Unemployment rate 5.2 5.6 6.2 7.0 6.7 6.3 6.0 5.7
House price growth 4.9 6.1 0.7 (0.8) (0.8) (1.1) (0.4) 0.5
Commercial real estate
price growth (4.5) (1.0) (1.0) (1.8) (0.8) (0.2) 1.2 1.9
ADDITIONAL FINANCIAL INFORMATION (continued)
3. UK economic assumptions (continued)
Scenarios by year
Key annual assumptions made by the Group are shown below. Gross
domestic product is presented as an annual change, house price
growth and commercial real estate price growth are presented as the
growth in the respective indices within the period. UK Bank Rate
and unemployment rate are averages for the period.
2021 2022 2023 2024 2025 2021-2025
At 31 March 2021 % % % % % %
Upside
Gross domestic product 5.7 4.6 1.4 1.3 1.2 2.8
UK Bank Rate 0.81 1.19 0.98 1.20 1.43 1.12
Unemployment rate 4.9 4.9 4.4 4.2 4.1 4.5
House price growth 0.8 4.0 6.0 4.3 3.6 3.7
Commercial real estate
price growth 9.3 4.8 2.3 (0.4) (0.4) 3.1
Base case
Gross domestic product 5.0 5.0 1.6 1.3 1.3 2.8
UK Bank Rate 0.10 0.10 0.21 0.44 0.69 0.31
Unemployment rate 6.0 6.2 5.4 5.0 4.8 5.5
House price growth (0.8) 0.5 2.2 1.7 1.7 1.1
Commercial real estate
price growth (1.8) 1.9 1.5 0.8 0.6 0.6
Downside
Gross domestic product 4.5 4.2 1.4 1.1 1.3 2.5
UK Bank Rate 0.12 0.12 0.09 0.17 0.33 0.17
Unemployment rate 6.9 7.7 6.9 6.3 5.9 6.8
House price growth (4.1) (6.9) (5.2) (3.9) (2.2) (4.5)
Commercial real estate
price growth (9.0) (4.0) (0.6) 0.0 0.9 (2.6)
Severe downside
Gross domestic product 2.8 3.4 1.1 1.3 1.4 2.0
UK Bank Rate 0.03 0.01 0.02 0.03 0.05 0.03
Unemployment rate 8.4 10.0 9.0 8.1 7.4 8.6
House price growth (5.9) (11.7) (10.7) (7.9) (4.1) (8.1)
Commercial real estate
price growth (19.8) (11.3) (4.7) (1.0) 1.1 (7.5)
ADDITIONAL FINANCIAL INFORMATION (continued)
3. UK economic assumptions (continued)
2020 2021 2022 2023 2024 2020-2024
At 31 December 2020 % % % % % %
Upside
Gross domestic product (10.5) 3.7 5.7 1.7 1.5 0.3
UK Bank Rate 0.10 1.14 1.27 1.20 1.21 0.98
Unemployment rate 4.3 5.4 5.4 5.0 4.5 5.0
House price growth 6.3 (1.4) 5.2 6.0 5.0 4.2
Commercial real estate
price growth (4.6) 9.3 3.9 2.1 0.3 2.1
Base case
Gross domestic product (10.5) 3.0 6.0 1.7 1.4 0.1
UK Bank Rate 0.10 0.10 0.10 0.21 0.25 0.15
Unemployment rate 4.5 6.8 6.8 6.1 5.5 5.9
House price growth 5.9 (3.8) 0.5 1.5 1.5 1.1
Commercial real estate
price growth (7.0) (1.7) 1.6 1.1 0.6 (1.1)
Downside
Gross domestic product (10.6) 1.7 5.1 1.4 1.4 (0.4)
UK Bank Rate 0.10 0.06 0.02 0.02 0.03 0.05
Unemployment rate 4.6 7.9 8.4 7.8 7.0 7.1
House price growth 5.6 (8.4) (6.5) (4.7) (3.0) (3.5)
Commercial real estate
price growth (8.7) (10.6) (3.2) (0.8) (0.8) (4.9)
Severe downside
Gross domestic product (10.8) 0.3 4.8 1.3 1.2 (0.8)
UK Bank Rate 0.10 0.00 0.00 0.01 0.01 0.02
Unemployment rate 4.8 9.9 10.7 9.8 8.7 8.8
House price growth 5.3 (11.1) (12.5) (10.7) (7.6) (7.5)
Commercial real estate
price growth (11.0) (21.4) (9.8) (3.9) (0.8) (9.7)
ADDITIONAL FINANCIAL INFORMATION (continued)
4. Group loans and advances to customers and expected credit loss allowances
Stage Stage Stage
1 2 3 POCI Total
Stage Stage
2 3
as % as %
of of
At 31 March 2021 GBPm GBPm GBPm GBPm GBPm total total
Loans and advances to customers
UK Mortgages 258,215 27,863 1,880 12,219 300,177 9.3 0.6
Credit cards 10,663 3,198 354 - 14,215 22.5 2.5
Loans and overdrafts 7,652 1,439 324 - 9,415 15.3 3.4
UK Motor Finance 12,947 2,256 232 - 15,435 14.6 1.5
Other 18,170 1,218 182 - 19,570 6.2 0.9
------- ------- ------- ------ ------- ------ ------
Retail 307,647 35,974 2,972 12,219 358,812 10.0 0.8
------- ------- ------- ------ ------- ------ ------
SME 28,063 3,322 860 - 32,245 10.3 2.7
Other 32,269 6,230 2,488 - 40,987 15.2 6.1
------- ------- ------- ------ ------- ------ ------
Commercial Banking 60,332 9,552 3,348 - 73,232 13.0 4.6
Central items(1) 51,388 33 59 - 51,480 0.1 0.1
------- ------- ------- ------ ------- ------ ------
Total gross lending 419,367 45,559 6,379 12,219 483,524 9.4 1.3
------ ------
ECL allowance on drawn
balances (1,240) (1,853) (1,847) (234) (5,174)
------- ------- ------- ------ -------
Net balance sheet carrying
value 418,127 43,706 4,532 11,985 478,350
------- ------- ------- ------ -------
Group ECL allowance (drawn and
undrawn)
UK Mortgages 97 451 188 235 971 46.4 19.4
Credit cards 185 516 165 - 866 59.6 19.1
Loans and overdrafts 210 334 163 - 707 47.2 23.1
UK Motor Finance(2) 177 171 155 - 503 34.0 30.8
Other 51 117 53 - 221 52.9 24.0
------- ------- ------- ------ ------- ------ ------
Retail 720 1,589 724 235 3,268 48.6 22.2
------- ------- ------- ------ ------- ------ ------
SME 130 162 123 - 415 39.0 29.6
Other 150 299 997 - 1,446 20.7 68.9
------- ------- ------- ------ ------- ------ ------
Commercial Banking 280 461 1,120 - 1,861 24.8 60.2
Other 411 1 10 - 422 0.2 2.4
------- ------- ------- ------ ------- ------ ------
Total ECL allowance (drawn
and undrawn) 1,411 2,051 1,854 235 5,551 36.9 33.4
------- ------- ------- ------ ------- ------ ------
Group ECL allowances (drawn
and undrawn) as a percentage
of loans and advances to customers(3)
UK Mortgages - 1.6 10.0 1.9 0.3
Credit cards 1.7 16.1 56.9 - 6.1
Loans and overdrafts 2.7 23.2 64.7 - 7.6
UK Motor Finance 1.4 7.6 66.8 - 3.3
Other 0.3 9.6 40.2 - 1.1
------- ------- ------- ------ -------
Retail 0.2 4.4 26.0 1.9 0.9
------- ------- ------- ------ -------
SME 0.5 4.9 16.8 - 1.3
Other 0.5 4.8 40.2 - 3.5
------- ------- ------- ------ -------
Commercial Banking 0.5 4.8 34.9 - 2.5
Other 0.8 3.0 16.9 - 0.8
------- ------- ------- ------ -------
Total ECL allowances (drawn
and undrawn) as a percentage
of loans and advances to
customers 0.3 4.5 30.6 1.9 1.1
------- ------- ------- ------ -------
(1) Includes reverse repos of GBP52.8 billion.
(2) UK Motor Finance for Stages 1 and 2 include GBP168 million
relating to provisions against residual values of vehicles subject
to finance leasing agreements. These provisions are included within
the calculation of coverage ratios.
(3) Total and Stage 3 ECL allowances as a percentage of drawn
balances exclude loans in recoveries in Retail of GBP186 million,
and in Commercial Banking of GBP135 million.
ADDITIONAL FINANCIAL INFORMATION (continued)
(4.) Group loans and advances to customers and expected credit
loss allowances (continued)
Stage Stage Stage
1 2 3 POCI Total
Stage Stage
2 3
as % as %
of of
At 31 December 2020 GBPm GBPm GBPm GBPm GBPm total total
Loans and advances to customers
UK Mortgages 251,418 29,018 1,859 12,511 294,806 9.8 0.6
Credit cards 11,496 3,273 340 - 15,109 21.7 2.3
Loans and overdrafts 7,710 1,519 307 - 9,536 15.9 3.2
UK Motor Finance 12,786 2,216 199 - 15,201 14.6 1.3
Other 17,879 1,304 184 - 19,367 6.7 1.0
------- ------- ------- ------ ------- ------ ------
Retail 301,289 37,330 2,889 12,511 354,019 10.5 0.8
------- ------- ------- ------ ------- ------ ------
SME 27,015 4,500 791 - 32,306 13.9 2.4
Other 29,882 9,438 2,694 - 42,014 22.5 6.4
------- ------- ------- ------ ------- ------ ------
Commercial Banking 56,897 13,938 3,485 - 74,320 18.8 4.7
Central items(1) 57,422 12 69 - 57,503 - 0.1
------- ------- ------- ------ ------- ------ ------
Total gross lending 415,608 51,280 6,443 12,511 485,842 10.6 1.3
------ ------
ECL allowance on drawn
balances (1,347) (2,125) (1,968) (261) (5,701)
------- ------- ------- ------ -------
Net balance sheet carrying
value 414,261 49,155 4,475 12,250 480,141
------- ------- ------- ------ -------
Group ECL allowance (drawn and
undrawn)
UK Mortgages 107 468 191 261 1,027 45.6 18.6
Credit cards 240 530 153 - 923 57.4 16.6
Loans and overdrafts 224 344 147 - 715 48.1 20.6
UK Motor Finance(2) 197 171 133 - 501 34.1 26.5
Other 46 124 59 - 229 54.1 25.8
------- ------- ------- ------ ------- ------ ------
Retail 814 1,637 683 261 3,395 48.2 20.1
------- ------- ------- ------ ------- ------ ------
SME 142 234 126 - 502 46.6 25.1
Other 172 475 1,161 - 1,808 26.3 64.2
------- ------- ------- ------ ------- ------ ------
Commercial Banking 314 709 1,287 - 2,310 30.7 55.7
Central items 410 - 12 - 422 - 2.8
------- ------- ------- ------ ------- ------ ------
Total ECL allowance (drawn
and undrawn) 1,538 2,346 1,982 261 6,127 38.3 32.3
------- ------- ------- ------ ------- ------ ------
Group ECL allowances (drawn and
undrawn) as a percentage of loans
and advances to customers(3)
UK Mortgages - 1.6 10.3 2.1 0.3
Credit cards 2.1 16.2 56.0 - 6.1
Loans and overdrafts 2.9 22.6 64.2 - 7.6
UK Motor Finance 1.5 7.7 66.8 - 3.3
Other 0.3 9.5 39.3 - 1.2
------- ------- ------- ------ -------
Retail 0.3 4.4 25.2 2.1 1.0
------- ------- ------- ------ -------
SME 0.5 5.2 19.1 - 1.6
Other 0.6 5.0 43.2 - 4.3
------- ------- ------- ------ -------
Commercial Banking 0.6 5.1 38.5 - 3.1
Central items 0.7 - 17.4 - 0.7
------- ------- ------- ------ -------
Total ECL allowances (drawn
and undrawn) as a percentage
of loans and advances to
customers 0.4 4.6 32.4 2.1 1.3
------- ------- ------- ------ -------
(1) Includes reverse repos of GBP58.6 billion.
(2) UK Motor Finance for Stages 1 and 2 include GBP192 million
relating to provisions against residual values of vehicles subject
to finance leasing agreements. These provisions are included within
the calculation of coverage ratios.
(3) Total and Stage 3 ECL allowances as a percentage of drawn
balances exclude loans in recoveries in Retail of GBP179 million,
and in Commercial Banking of GBP138 million.
ADDITIONAL FINANCIAL INFORMATION (continued)
5. Group Stage 2 loans and advances to customers
Up to date
--------------------------------
1-30 days Over 30 days
PD movements Other(1) past due(2) past due Total
---------------
Gross Gross Gross Gross Gross
lending ECL(3) lending ECL(3) lending ECL(3) lending ECL(3) lending ECL(3)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 31 March
2021
UK
Mortgages 20,920 199 3,220 127 1,856 44 1,867 81 27,863 451
Credit
cards 2,905 404 190 74 75 23 28 15 3,198 516
Loans and
overdrafts 904 202 366 63 131 49 38 20 1,439 334
UK Motor
Finance 765 62 1,324 55 128 36 39 18 2,256 171
Other 473 67 589 34 69 9 87 7 1,218 117
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Retail 25,967 934 5,689 353 2,259 161 2,059 141 35,974 1,589
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
SME 3,026 148 208 8 35 3 53 3 3,322 162
Other 5,996 293 77 3 44 3 113 - 6,230 299
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Commercial
Banking 9,022 441 285 11 79 6 166 3 9,552 461
Central items 19 - 11 1 2 - 1 - 33 1
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Total 35,008 1,375 5,985 365 2,340 167 2,226 144 45,559 2,051
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
At 31
December
2020
UK
Mortgages 22,569 215 3,078 131 1,648 43 1,723 79 29,018 468
Credit
cards 2,924 408 220 76 93 27 36 19 3,273 530
Loans and
overdrafts 959 209 388 68 126 45 46 22 1,519 344
UK Motor
Finance 724 62 1,321 55 132 37 39 17 2,216 171
Other 512 56 651 44 69 14 72 10 1,304 124
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Retail 27,688 950 5,658 374 2,068 166 1,916 147 37,330 1,637
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
SME 4,229 219 150 6 40 5 81 4 4,500 234
Other 9,151 469 83 3 28 2 176 1 9,438 475
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Commercial
Banking 13,380 688 233 9 68 7 257 5 13,938 709
Central items 1 - 11 - - - - - 12 -
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Total 41,069 1,638 5,902 383 2,136 173 2,173 152 51,280 2,346
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
(1) Includes forbearance, client and product-specific indicators
not reflected within quantitative PD assessments.
(2) Includes assets that have triggered PD movements, or other
rules, given that being 1-29 days in arrears in and of itself is
not a Stage 2 trigger.
(3) Expected credit loss allowances on loans and advances to
customers (drawn and undrawn).
ADDITIONAL FINANCIAL INFORMATION (continued)
6. Commercial Banking lending in key coronavirus-impacted sectors(1)
At 31 March 2021 At 31 December 2020
----------------------------------- --------------------------------------
Drawn
Drawn as a
as a % % of
of Group Group
Drawn loans Drawn loans
and and and and
Drawn Undrawn undrawn advances Drawn Undrawn undrawn advances
GBPbn GBPbn GBPbn % GBPbn GBPbn GBPbn %
Retail non-food 2.1 1.5 3.6 0.4 2.1 1.5 3.6 0.4
Automotive
dealerships(2) 2.0 1.6 3.6 0.4 1.7 2.0 3.7 0.4
Oil and gas 1.0 2.1 3.1 0.2 1.1 2.5 3.6 0.2
Construction 0.7 1.5 2.2 0.1 0.8 1.6 2.4 0.2
Passenger
transport 1.4 0.8 2.2 0.3 1.1 1.0 2.1 0.2
Hotels 1.6 0.3 1.9 0.4 1.8 0.3 2.1 0.4
Leisure 0.5 0.7 1.2 0.1 0.6 0.7 1.3 0.1
Restaurants
and bars 0.6 0.3 0.9 0.1 0.6 0.3 0.9 0.1
------ ------- -------- ------- ------- --------
Total 9.9 8.8 18.7 2.0 9.8 9.9 19.7 2.0
------ ------- -------- ------- ------- --------
(1) Lending classified using ONS Standard Industrial
Classification codes at legal entity level; drawn balances exclude
c.GBP1 billion lending under the Coronavirus Business Interruption
Loan Scheme and the Bounce Back Loan Scheme.
(2) Automotive dealerships includes Black Horse Motor Wholesale
lending (within Retail).
7. Support measures
Retail payment holiday characteristics(1)
Mortgages Cards Loans Motor Total
------------ ----------- ----------- ----------- --------------
000s GBPbn 000s GBPbn 000s GBPbn 000s GBPbn 000s GBPbn
Total payment holidays granted 491 61.6 341 1.7 304 2.4 161 2.2 1,297 68.0
First payment holiday still
in force 6 0.9 10 0.0 7 0.1 5 0.1 29 1.1
Matured payment holidays
- repaying 443 55.4 282 1.4 259 2.1 139 1.8 1,123 60.7
Matured payment holidays
- extended 15 2.0 9 0.0 14 0.1 6 0.1 43 2.3
Matured payment holidays
- missed payment 27 3.3 41 0.2 24 0.2 11 0.2 103 3.9
As a percentage of total
matured
Matured payment holidays
- repaying 91% 91% 85% 85% 87% 87% 89% 86% 89% 91%
Matured payment holidays
- extended 3% 3% 3% 3% 5% 5% 4% 5% 3% 3%
Matured payment holidays
- missed payment 6% 5% 12% 12% 8% 8% 7% 9% 8% 6%
(1.) Data as at 31 March 2021. Analysis of mortgage payment
holidays excludes St James Place, Intelligent Finance and Tesco;
motor finance payment holidays excludes Lex Autolease. Total
payment holidays granted are equal to the sum of first payment
holiday still in force and matured payment holidays. Charged-off
balances are included within missed payments. Totals and
percentages are calculated using unrounded numbers.
Government-backed loan scheme approvals and value(1)
000s GBPbn
Coronavirus Business Interruption Loan Scheme 10.5 2.5
Bounce Back Loan Scheme 343.3 9.7
Coronavirus Large Business Interruption Loan Scheme 0.1 0.7
----- -----
Total 353.9 12.9
----- -----
(1) Data as at 2 April 2021.
FORWARD LOOKING STATEMENTS
This document contains certain forward looking statements within
the meaning of Section 21E of the US Securities Exchange Act of
1934, as amended, and section 27A of the US Securities Act of 1933,
as amended, with respect to the business, strategy, plans and/or
results of Lloyds Bank plc together with its subsidiaries (the
Lloyds Bank Group) and its current goals and expectations relating
to its future financial condition and performance. Statements that
are not historical or current facts, including statements about the
Lloyds Bank Group's or its directors' and/or management's beliefs
and expectations, are forward looking statements. Words such as
'believes', 'achieves', 'anticipates', 'estimates', 'expects',
'targets', 'should', 'intends', 'aims', 'projects', 'plans',
'potential', 'will', 'would', 'could', 'considered', 'likely',
'may', 'seek', 'estimate' and variations of these words and similar
future or conditional expressions are intended to identify forward
looking statements but are not the exclusive means of identifying
such statements. Examples of such forward looking statements
include, but are not limited to, statements or guidance relating
to: projections or expectations of the Lloyds Bank Group's future
financial position including profit attributable to shareholders,
provisions, economic profit, dividends, capital structure,
portfolios, net interest margin, capital ratios, liquidity,
risk-weighted assets (RWAs), expenditures or any other financial
items or ratios; litigation, regulatory and governmental
investigations; the Lloyds Bank Group's future financial
performance; the level and extent of future impairments and
write-downs; statements of plans, objectives or goals of the Lloyds
Bank Group or its management including in respect of statements
about the future business and economic environments in the UK and
elsewhere including, but not limited to, future trends in interest
rates, foreign exchange rates, credit and equity market levels and
demographic developments; statements about competition, regulation,
disposals and consolidation or technological developments in the
financial services industry; and statements of assumptions
underlying such statements. By their nature, forward looking
statements involve risk and uncertainty because they relate to
events and depend upon circumstances that will or may occur in the
future. Factors that could cause actual business, strategy, plans
and/or results (including but not limited to the payment of
dividends) to differ materially from forward looking statements
made by the Lloyds Bank Group or on its behalf include, but are not
limited to: general economic and business conditions in the UK and
internationally; market related trends and developments;
fluctuations in interest rates, inflation, exchange rates, stock
markets and currencies; any impact of the transition from IBORs to
alternative reference rates; the ability to access sufficient
sources of capital, liquidity and funding when required; changes to
the Lloyds Bank Group's or Lloyds Banking Group plc's credit
ratings; the ability to derive cost savings and other benefits
including, but without limitation, as a result of any acquisitions,
disposals and other strategic transactions; potential changes in
dividend policy; the ability to achieve strategic objectives; the
Lloyds Bank Group's ESG targets and/or commitments; changing
customer behaviour including consumer spending, saving and
borrowing habits; changes to borrower or counterparty credit
quality impacting the recoverability and value of balance sheet
assets; concentration of financial exposure; management and
monitoring of conduct risk; exposure to counterparty risk
(including but not limited to third parties conducting illegal
activities without the Lloyds Bank Group's knowledge); instability
in the global financial markets, including Eurozone instability,
instability as a result of uncertainty surrounding the exit by the
UK from the European Union (EU) and the EU-UK Trade and Cooperation
Agreement, instability as a result of the potential for other
countries to exit the EU or the Eurozone, and the impact of any
sovereign credit rating downgrade or other sovereign financial
issues; political instability including as a result of any UK
general election and any further possible referendum on Scottish
independence; technological changes and risks to the security of IT
and operational infrastructure, systems, data and information
resulting from increased threat of cyber and other attacks;
natural, pandemic (including but not limited to the COVID-19
pandemic) and other disasters, adverse weather and similar
contingencies outside the Lloyds Bank Group's or Lloyds Banking
Group plc's control; inadequate or failed internal or external
processes or systems; acts of war, other acts of hostility,
terrorist acts and responses to those acts, or other such events;
geopolitical unpredictability; risks relating to sustainability and
climate change, including the Lloyds Bank Group's or Lloyds Banking
Group plc's ability along with the government and other
stakeholders to manage and mitigate the impacts of climate change
effectively; changes in laws, regulations, practices and accounting
standards or taxation, including as a result of the UK's exit from
the EU; changes to regulatory capital or liquidity requirements
(including regulatory measures to restrict distributions to address
potential capital and liquidity stress) and similar contingencies
outside the Lloyds Bank Group's or Lloyds Banking Group plc's
control; the policies, decisions and actions of governmental or
regulatory authorities or courts in the UK, the EU, the US or
elsewhere including the implementation and interpretation of key
laws, legislation and regulation together with any resulting impact
on the future structure of the Lloyds Bank Group; the ability to
attract and retain senior management and other employees and meet
its diversity objectives; actions or omissions by the Lloyds Bank
Group's directors, management or employees including industrial
action; changes in Lloyds Bank Group's ability to develop
sustainable finance products and Lloyds Bank Group's capacity to
measure the climate impact from its financing activity, which may
affect Lloyds Bank Group's ability to achieve its climate ambition;
changes to the Lloyds Bank Group's post-retirement defined benefit
scheme obligations; the extent of any future impairment charges or
write-downs caused by, but not limited to, depressed asset
valuations, market disruptions and illiquid markets; the value and
effectiveness of any credit protection purchased by the Lloyds Bank
Group; the inability to hedge certain risks economically; the
adequacy of loss reserves; the actions of competitors, including
non-bank financial services, lending companies and digital
innovators and disruptive technologies; and exposure to regulatory
or competition scrutiny, legal, regulatory or competition
proceedings, investigations or complaints. Please refer to the
latest Annual Report on Form 20-F filed by Lloyds Bank plc with the
US Securities and Exchange Commission (the SEC), which is available
on the SEC's website at www.sec.gov, for a discussion of certain
factors and risks. Lloyds Bank plc may also make or disclose
written and/or oral forward looking statements in reports filed
with or furnished to the SEC, Lloyds Bank plc annual reviews,
half-year announcements, proxy statements, offering circulars,
prospectuses, press releases and other written materials and in
oral statements made by the directors, officers or employees of
Lloyds Bank plc to third parties, including financial analysts.
Except as required by any applicable law or regulation, the forward
looking statements contained in this document are made as of
today's date, and the Lloyds Bank Group expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward looking statements contained in this
document to reflect any change in the Lloyds Bank Group's
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
The information, statements and opinions contained in this document
do not constitute a public offer under any applicable law or an
offer to sell any securities or financial instruments or any advice
or recommendation with respect to such securities or financial
instruments.
CONTACTS
For further information please contact:
INVESTORS AND ANALYSTS
Douglas Radcliffe
Group Investor Relations Director
020 7356 1571
douglas.radcliffe@lloydsbanking.com
Edward Sands
Director of Investor Relations
020 7356 1585
edward.sands@lloydsbanking.com
Eileen Khoo
Director of Investor Relations
07385 376435
eileen.khoo@lloydsbanking.com
Nora Thoden
Director of Investor Relations - ESG
020 7356 2334
nora.thoden@lloydsbanking.com
CORPORATE AFFAIRS
Grant Ringshaw
External Relations Director
020 7356 2362
grant.ringshaw@lloydsbanking.com
Matt Smith
Head of Media Relations
020 7356 3522
matt.smith@lloydsbanking.com
Copies of this interim management statement may be obtained
from:
Investor Relations, Lloyds Banking Group plc, 25 Gresham Street,
London EC2V 7HN
The statement can also be found on the Group's website -
www.lloydsbankinggroup.com
Registered office: Lloyds Bank plc, 25 Gresham Street, London
EC2V 7HN
Registered in England No. 2065
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