REG - Lloyds Bank CorpMkts Lloyds Banking Group - 2024 Half-Year Results
31/07/2024 09:15
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RNS Number : 5650Y Lloyds Bank Corporate Markets PLC 31 July 2024
Lloyds Bank Corporate Markets plc
2024 Half-Year Results
Non-ring-fenced bank
CONTENTS
Financial review (#Section3) 1
Principal risks and uncertainties (#Section4) 5
Statutory information
Condensed consolidated (#Section5) half-year (#Section5) financial statements 7
(#Section5) (unaudited)
Condensed consolidated income statement (unaudited) (#Section6) 8
Condensed consolidated statement of comprehensive income (unaudited) 9
(#Section7)
Condensed consolidated balance sheet (unaudited) (#Section8) 10
Condensed consolidated statement of changes in equity (unaudited) (#Section9) 11
Condensed consolidated cash flow statement (unaudited) (#Section10) 13
Notes to the condensed consolidated half-year financial statements (unaudited) 14
(#Section11)
Statement of directors (#Section24) ' (#Section24) responsibilities 31
(#Section24)
Independent review report to Lloyds Bank Corporate Markets plc (#Section25) 32
Forward (#Section26) - (#Section26) looking statements (#Section26) 34
Contacts (#Section27) 35
LBCM's purpose is Helping Britain Prosper
By connecting the UK and Lloyds Banking Group with the world
RESULTS FOR THE HALF-YEAR
• Strong financial performance from a growing business that's
delivering for our customers. Continued business momentum resulted in total
income of £529 million (half-year to 30 June 2023: £433 million) and profit
before tax of £293 million (half-year to 30 June 2023: £213 million),
generating a solid increase in return on tangible equity to 13.3 per cent
(year to 31 December 2023: 9.2 per cent)
• Successful markets performance has continued in 2024, with the
financial markets business ending the half-year in the top three for GBP
interest rate swaps and increasing the volume of foreign exchange transactions
traded as we digitise our capabilities and deepen client relationships. In
capital markets, Euro and US Dollar debt capital markets issuance volumes
increased by 61 per cent versus the first half of 2023, significantly above
the market increase of 27 per cent(1). We continue to deepen our footprint
within North America including through increased activity on originate to
distribute transactions
• We provide price certainty via product choice to both our
corporate and personal customers. Ongoing significant investment in systems,
including the launch of our 'Lloyds Bank International' mobile application
within the Crown Dependencies, enables us to support our customers across more
of their needs in a resilient manner. We also launched the 'Lloyds Bank Market
Insights' publications which brings together economics and markets expertise
to provide topical and timely thought leadership to clients
• We remain mindful of our role in building a more sustainable and
inclusive future and have had a thriving first half in sustainability issuance
which has helped Commercial Banking progress towards its £30 billion
sustainable financing target by the end of 2026. In the first half of 2024,
LBCM ranked first in ESG-labelled bond issuances for both UK issuers and for
all issuers raising funds in Sterling(2). We also supported Lloyds Banking
Group's (LBG) return to the Euro primary market by issuing a €1bn fixed rate
bond green transaction and in Germany acted as joint bookrunner on a €2bn
triple-tranche green bond
Our strategic aim is to provide a first-class banking, financing and risk
management proposition, underpinned by excellent customer service. This is
aligned to the Corporate & Institutional Banking strategy, of which Lloyds
Bank Corporate Markets is a core part, to deepen client relationships, expand
institutional coverage and drive LBG collaboration opportunities including the
introduction of our clients to additional LBG products and services.
Our purpose driven business model supports our customers (large corporates,
financial institutions and commercial and retail customers in the Crown
Dependencies) with a range of products including risk management, commercial
lending, community banking, international private banking, bonds and
structured finance, trade and working capital management and
sustainability-linked financing. All served via hubs in the UK, Jersey,
Guernsey, Isle of Man, New York USA and Frankfurt Germany.
(1 ) Refinitiv Eikon - All International Bonds in EUR and USD, excluding
Sovereign, Supranational and Agency issuance.
(2 ) Bondradar as of 1st July 2024 for H1 2024. All UK issuers, excludes
SSAs & all issuers excluding SSAs for GBP issuance.
REVIEW OF PERFORMANCE
Income statement
For the six months to 30 June 2024, total income was £529 million comprising Income statement Half-year Half-year Mvmt
net trading income of £322 million, net fee and commission income of
£153 million and net interest income of £56 million. to 30 Jun to 30 Jun 2023 £m
Our capital and financial markets businesses have delivered a strong 2024 £m
performance in 2024 with significant growth versus the comparative period
resulting in a £122 million increase in net trading income. £m
Net fee and commission income has increased £16 million in the period driven
by the strong markets, in particular performance on bond issuances.
Net interest income is down versus the first half of 2023 driven by changes in
customer behaviours, increased cost of deposits and a one off gain recognised
in 2023.
Net interest income 56 96 (40)
Net fee and commission income 153 137 16
Net trading income 322 200 122
Other operating income (2) - (2)
Total income 529 433 96
Operating expenses (250) (238) (12)
Impairment 14 18 (4)
Profit before tax 293 213 80
Tax expense (62) (46) (16)
Profit for the period 231 167 64
Operating expenses for the period were £250 million and predominantly consist
of management charges relating to the intra-group agreement with Lloyds Bank
plc and staff costs. LBCM has maintained a strong cost discipline while
impacted by a sector wide change in the charging approach for the Bank of
England Levy in the first quarter of 2024. An offsetting benefit will be
recognised through net interest income over the remainder of the year which
will reduce the impact of the new levy charge.
The impairment credit of £14 million recognised in the period reflects
continued strong underlying performance and an improvement in the economic
outlook. A tax expense of £62 million was recorded which is £16 million up
versus the comparative period as a result of the increased profits in the
period. The other comprehensive income of £17 million mainly relates to the
movements on the cash flow hedging reserve.
Balance sheet assets
Balance sheet assets At At Mvmt Total assets were £91,141 million at 30 June 2024, an increase of
£814 million since 31 December 2023.
30 Jun 31 Dec £m
Overall total asset growth is driven by the increase in financial assets at
2024 2023 fair value through profit or loss and financial assets at amortised cost,
predominantly due to the planned business growth in reverse repurchase
£m £m agreements.
Cash and balances at central banks 17,654 20,201 (2,547)
Financial assets at fair value through profit or loss 25,231 21,989 3,242
Derivative financial instruments 20,053 22,606 (2,553)
Financial assets at amortised cost 26,083 24,891 1,192
Other assets 2,120 640 1,480
Total assets 91,141 90,327 814
This is offset by a reduction in our derivative financial instruments due to
changes in fair value, and a reduction in our cash and balances at central
banks due to changes in the liquidity requirements in the period.
Financial assets at amortised cost includes loans and advances to banks of
£1,183 million, loans and advances to customers of £16,875 million and
reverse repurchase agreements of £7,131 million. The increase in other assets
relates to forward settlement balances.
REVIEW OF PERFORMANCE (continued)
Balance sheet liabilities
Total liabilities were £87,507 million at 30 June 2024, compared to £86,451
million at 31 December 2023.
Total deposits has reduced slightly year on year by £812 million, due to Balance sheet liabilities At At Mvmt
market movements.
30 Jun 31 Dec £m
Financial liabilities at fair value through profit or loss increased due to
planned business growth in repurchase agreements while derivative financial 2024 2023
instruments reduced due to movements in fair value.
£m £m
Debt securities in issue at amortised cost include commercial paper,
certificates of deposit and Euro Medium Term Notes. The movement in other
liabilities relates to forward settlement balances.
Total deposits 30,705 31,517 (812)
Due to fellow LBG undertakings 1,175 1,213 (38)
Financial liabilities at fair value through profit or loss 22,647 19,686 2,961
Derivative financial instruments 14,223 17,576 (3,353)
Debt securities in issue at amortised cost 16,015 15,378 637
Other liabilities 1,996 326 1,670
Subordinated liabilities 746 755 (9)
Total liabilities 87,507 86,451 1,056
Balance sheet equity
Equity At At Mvmt Total equity at 30 June 2024 was £3,634 million (31 December 2023: £3,876
million) with the movement in retained profits representing profit in the
30 Jun 31 Dec £m period offset by the return of £450 million capital via dividend to our
parent company Lloyds Banking Group plc.
2024 2023
The movement in other reserves relates to the to the cash flow hedge reserve
£m £m representing fair value movements on the structural hedge.
Share capital 370 370 -
Other reserves (296) (313) 17
Retained profits 2,752 3,011 (259)
Ordinary shareholders' equity 2,826 3,068 (242)
Other equity instruments 808 808 -
Total equity 3,634 3,876 (242)
Regulatory capital
The capital position of Lloyds Bank Corporate Markets plc is presented on an
unconsolidated basis.
The Bank's common equity tier 1 (CET1) capital ratio increased to 13.7 per Regulatory capital At At Mvmt
cent (31 December 2023: 13.3 per cent). Risk-weighted assets (RWAs) increased
by £712 million to £21,204 million reflecting an increase in RWAs relating 30 Jun 31 Dec £m
to counterparty credit risk and market risk. The Bank's UK leverage ratio
remained at 4.7 per cent as profits for the year have been offset by increases 2024 2023
in the exposure measure, as a result of the balance sheet growth since year
end. Post half-year, movements in internal credit ratings resulted in a £m £m
proforma 30 June 2024 increase to RWAs of £619 million and associated
regulatory expected loss of £56 million.
Common equity tier 1 capital 2,908 2,725 183
Total tier 1 capital 3,691 3,508 183
Total capital resources 4,283 4,109 174
Risk-weighted assets 21,204 20,492 712
CET1 ratio 13.7 % 13.3 % 0.4 pp
UK leverage ratio 4.7 % 4.7 % -
REVIEW OF PERFORMANCE (continued)
Capital position
The Bank's capital position as at 30 June 2024, after applying IFRS 9
transitional arrangements, is set out below:
At 30 Jun At 31 Dec 2023
2024 £m
£m
Common equity tier 1
Shareholders' equity per balance sheet 2,837 3,091
Adjustment to retained earnings for foreseeable dividends - (450)
Cash flow hedging reserve 275 289
Debit valuation adjustment (27) (22)
3,085 2,908
less: deductions from common equity tier 1
Prudent valuation adjustment (125) (142)
Excess of expected losses over impairment provisions and value adjustments (52) (41)
Common equity tier 1 capital 2,908 2,725
Additional tier 1
Additional tier 1 instruments 783 783
Total tier 1 capital 3,691 3,508
Tier 2
Tier 2 instruments 691 699
Other adjustments (99) (98)
Total tier 2 capital 592 601
Total capital resources 4,283 4,109
Risk-weighted assets 21,204 20,492
Capital and leverage ratios
Common equity tier 1 capital ratio 13.7 % 13.3 %
Tier 1 capital ratio 17.4 % 17.1 %
Total capital ratio 20.2 % 20.1 %
UK leverage ratio 4.7 % 4.7 %
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks that could impact LBCM's ability to deliver its long-term
strategic objectives and the approach to managing each risk are reviewed and
reported to the Board Risk Committee regularly in alignment with the risk
management framework.
Our enterprise risk management framework
The Lloyds Banking Group enterprise risk management framework (ERMF) applies
to all LBG undertakings and is the foundation for the delivery of effective
and consistent risk control, providing proactive identification, active
management and monitoring of LBCM's risks. Since the LBCM 2023 annual
accounts, LBG has reviewed the three lines of defence model to evolve
accountabilities with enhanced focus on controls and expertise. This is to
increase the pace of decision making and support strategic ambition.
LBCM continues to adopt the ERMF, supplemented with additional tailored
practices set out to address LBCM-specific requirements. The ERMF and the LBCM
Risk Management Framework apply to LBCM business across all legal entities and
locations.
LBCM's risk appetite, principles, policies, procedures, controls and reporting
are regularly reviewed and updated to ensure they remain in line with
regulation, law, corporate governance and industry good practice.
Risk appetite is defined within LBCM as the amount and type of risk that it is
prepared to seek, accept or tolerate in delivering its strategy. As a separate
legal group with its own Board, LBCM maintains its own risk appetite which is
aligned to the LBG approach but is adjusted to reflect the specific
characteristics of LBCM's balance sheet and portfolio, including its
international presence. The LBCM Board (Board) is responsible for the annual
approval of LBCM's risk appetite.
Regular close monitoring and comprehensive reporting to management and the
Board ensures risk appetite limits are maintained and subject to stress
analysis at a risk type and portfolio level, as appropriate.
Governance is maintained through delegation of authority from the Board.
Senior executives are supported by a committee-based structure which is
designed to ensure open challenge and enable effective Board engagement and
decision-making.
The Board and senior management play a vital role in shaping and embedding a
supportive risk culture. Senior leaders set a clear tone from the top and lead
by example reflecting LBG values, encouraging a culture of intellectual
curiosity, innovation and proactive risk management amongst all colleagues.
Current thematic and emerging risks
The significant risks encountered by LBCM are detailed below. The external
risks faced by LBCM may also impact the success of delivering against LBCM's
long-term strategic objectives. They include, but are not limited to, the
uncertainties linked to the macroeconomic and geopolitical environment, such
as the conflicts in the Ukraine and Middle East, inflation, interest rates,
and cost of living pressures. These could also affect the financial condition
of LBCM's customers, clients and counterparties, particularly in vulnerable
sectors.
In addition, LBCM continues to monitor and address current thematic risks that
could have an adverse impact on business model, financial conditions,
operations and its ability to achieve financial targets. These are
interconnected with potential outcomes that should one risk materialise, it
could have an impact on other risks. They include, but are not limited to:
• The extent and pace of regulatory changes and increased oversight, which
could increase costs and prudential resource requirements for LBCM and result
in changes to LBCM's legal and operating structure and create risks from
non-compliance that include censure, fines and removal of business permissions
to operate. Divergence of UK regulation from other jurisdictions remains a
risk of additional complexity for LBCM and operations in international
jurisdictions
• The pace of technological advances, including failure to adopt and
utilise new technology effectively, evolution of cyber threats, and system,
process and third party disruption
• The evolution of data management and adoption of AI or generative AI,
and the associated risks from a data ethics and data privacy perspective
• The ability to create an agile, high performing workforce with high
quality talent in the right locations. Including timely retention of key
skills in LBCM aligned to the evolving industry need
• The effectiveness of proprietary models which are at risk of being
insufficiently predictive due to the limitations of historical data, extreme
market volatility, and the risk of ineffectiveness in parameterisation,
implementation, oversight and monitoring
•
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Principal risks
The LBCM definition of risks have been updated since the disclosure in LBCM's
2023 annual report and accounts. There has been a detailed review of risk
categories and an event-based risk management framework implemented. This has
resulted in a reduction in the number of principal risk types and the
simplification of secondary risk categories. This change better aligns to the
Basel Committee on Banking Supervisions' event categories which will benefit
LBCM for scenario activities and regulatory reporting. LBCM's principal risk
and uncertainties are regularly reviewed and reported to the Board.
Capital risk - The risk that an insufficient quantity or quality of capital is
held to meet regulatory requirements or to support business strategy, an
inefficient level of capital is held or that capital is inefficiently deployed
across LBCM.
Climate risk - The risk that LBCM experiences losses and/or reputational
damage as a result of climate change, either directly or through its
customers. LBCM is aligned with LBG, its parent company, with the goal of
reducing emissions financing by more than 50 per cent by 2030 and achieving
net zero financed emissions by 2025 (refer LBG 2024 Half-Year Results and the
LBG 2023 sustainability report).
Compliance risk - The risk of financial penalties, regulatory censure,
criminal or civil enforcement action or customer detriment as a result of
failure to identify, assess, correctly interpret, comply with, or manage
regulatory and/or legal requirements.
Conduct risk - The risk of LBCM activities, behaviours, strategy or business
planning, having an adverse impact on outcomes for customers, undermining the
integrity of the market or distorting competition, which could lead to
regulatory censure, reputational damage or financial loss.
The introduction of Consumer Duty has increased regulatory expectations in
relation to customer outcomes for consumers in the UK.
Credit risk - The risk that parties with whom LBCM has contracted fail to meet
their financial obligations (on and off-balance sheet).
Economic crime risk - The risk that LBCM implements ineffective policies,
systems, processes and controls to prevent, detect and respond to the risk of
fraud and/or financial crime resulting in increased losses, regulatory
censure/fines and/or adverse publicity in the UK or other jurisdictions in
which LBCM operates.
Liquidity risk - The risk that LBCM does not have sufficient financial
resources to meet its commitments when they fall due or can only secure them
at excessive cost.
Market risk - The risk that LBCM's capital or earnings profile are adversely
affected by changes in market rates or prices, including but not limited to
interest rates, foreign exchange, equity prices and credit spreads.
Model risk - The potential for adverse consequences from model errors or the
inappropriate use of modelled outputs to inform business decisions. Adverse
consequences could lead to a deterioration in the prudential position,
non-compliance with applicable laws and/or regulations, or damage to LBCM's
reputation. Model risk can also lead to financial loss, as well as qualitative
limitations such as the imposition of restrictions on business activities.
Operational risk - The risk of actual or potential impact to LBCM (financial
and/or non-financial) resulting from inadequate or failed internal processes,
people, and systems or from external events. Resilience is core to the
management of operational risk within LBCM to ensure that business processes
(including those that are outsourced) can withstand operational risks and can
respond to and meet customer and stakeholder needs when continuity of
operations is compromised.
This includes the provision of services to LBCM (including people, systems and
processes) outsourced to Lloyds Bank plc via a shared service provision model
or by external providers via Lloyds Bank plc. The Shared Service Model creates
internal service provision risk and may be elevated in situations where LBCM's
priorities are not wholly aligned with those of the wider Lloyds Banking
Group.
STATUTORY INFORMATION
Condensed consolidated half-year financial statements (unaudited)
Condensed consolidated income statement (unaudited) (#Section6) 8
Condensed consolidated statement of comprehensive income (unaudited) 9
(#Section7)
Condensed consolidated balance sheet (unaudited) (#Section8) 10
Condensed consolidated statement of changes in equity (unaudited) (#Section9) 11
Condensed consolidated cash flow statement (unaudited) (#Section10) 13
Notes to the condensed consolidated half-year financial statements (unaudited)
1 Basis of preparation and accounting policies (#Section12) 14
2 Critical accounting judgements and key sources of estimation uncertainty 15
(#Section13)
3 Operating expenses (#Section14) 15
4 Impairment (#Section15) 15
5 Tax (#Section16) 16
6 Fair values of financial assets and liabilities (#Section17) 16
7 Loans and advances to customers (#Section18) 23
8 Allowance for expected credit losses (#Section19) 24
9 Debt securities in issue (#Section20) 29
10 Dividends on ordinary shares (#Section21) 29
11 Related party transactions (#Section22) 29
12 Contingent liabilities, commitments and guarantees (#Section23) 30
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Note Half-year Half-year
to 30 Jun to 30 Jun
2024 2023
£m £m
Interest income 1,392 1,219
Interest expense (1,336) (1,123)
Net interest income 56 96
Fee and commission income 174 154
Fee and commission expense (21) (17)
Net fee and commission income 153 137
Net trading income 322 200
Other operating income (2) -
Other income 473 337
Total income 529 433
Operating expenses 3 (250) (238)
Impairment 4 14 18
Profit before tax 293 213
Tax expense 5 (62) (46)
Profit for the period 231 167
Profit attributable to ordinary shareholders 191 132
Profit attributable to other equity holders 40 35
Profit for the period 231 167
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(1) (UNAUDITED)
Half-year Half-year
to 30 Jun to 30 Jun
2024 2023
£m £m
Profit for the period 231 167
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Movements in cash flow hedging reserve, net of tax
Effective portion of changes in fair value taken to other comprehensive income (171) (241)
Net income statement transfers 190 177
Tax (5) 18
14 (46)
Movements in foreign currency translation reserve, net of tax
Currency translation differences (tax: £nil) 3 (5)
Transfers to income statement (tax: £nil) - -
3 (5)
Total other comprehensive income (loss) for the period, net of tax 17 (51)
Total comprehensive income for the period 248 116
Total comprehensive income attributable to ordinary shareholders 208 81
Total comprehensive income attributable to other equity holders 40 35
Total comprehensive income for the period 248 116
(1) See note 1 regarding changes to presentation.
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
Note At 30 Jun At 31 Dec
2024 2023
£m £m
Assets
Cash and balances at central banks 17,654 20,201
Financial assets at fair value through profit or loss 6 25,231 21,989
Derivative financial instruments 6 20,053 22,606
Loans and advances to banks 1,183 1,753
Loans and advances to customers 7 16,875 16,447
Reverse repurchase agreements 7,131 6,020
Debt securities 356 374
Due from fellow Lloyds Banking Group undertakings 538 297
Financial assets at amortised cost 26,083 24,891
Current tax recoverable 3 14
Deferred tax assets 102 108
Other assets(1) 2,015 518
Total assets 91,141 90,327
Liabilities
Deposits from banks 2,182 2,078
Customer deposits 28,523 29,439
Repurchase agreements at amortised cost 66 1
Due to fellow Lloyds Banking Group undertakings 1,175 1,213
Financial liabilities at fair value through profit or loss 6 22,647 19,686
Derivative financial instruments 6 14,223 17,576
Debt securities in issue at amortised cost 9 16,015 15,378
Other liabilities 1,884 297
Current tax liabilities 32 12
Provisions 14 16
Subordinated liabilities 746 755
Total liabilities 87,507 86,451
Equity
Share capital 370 370
Other reserves (296) (313)
Retained profits 2,752 3,011
Ordinary shareholders' equity 2,826 3,068
Other equity instruments 808 808
Total equity 3,634 3,876
Total equity and liabilities 91,141 90,327
(1) See note 1 regarding changes to presentation.
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Attributable to ordinary shareholders
Share Other Retained Total Other Total
capital reserves profits £m equity £m
£m £m £m instruments
£m
At 1 January 2024 370 (313) 3,011 3,068 808 3,876
Comprehensive income
Profit for the period - - 191 191 40 231
Other comprehensive income
Movements in cash flow hedging reserve, net of tax - 14 - 14 - 14
Movements in foreign currency translation reserve, net of tax - 3 - 3 - 3
Total other comprehensive income - 17 - 17 - 17
Total comprehensive income(1) - 17 191 208 40 248
Transactions with owners
Dividends - - (450) (450) - (450)
Distributions on other equity instruments - - - - (40) (40)
Total transactions with owners - - (450) (450) (40) (490)
At 30 June 2024(2) 370 (296) 2,752 2,826 808 3,634
(1) Total comprehensive income attributable to owners of the parent was
£248 million.
(2) Total equity attributable to owners of the parent was £3,634 million.
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) (continued)
Attributable to ordinary shareholders
Share Other Retained Total Other Total
capital reserves profits £m equity £m
£m £m £m instruments
£m
At 1 January 2023 370 (525) 2,768 2,613 782 3,395
Comprehensive income
Profit for the period - - 132 132 35 167
Other comprehensive income
Movements in cash flow hedging reserve, net of tax - (46) - (46) - (46)
Movements in foreign currency translation reserve, net of tax - (5) - (5) - (5)
Total other comprehensive loss - (51) - (51) - (51)
Total comprehensive (loss) income - (51) 132 81 35 116
Transactions with owners
Distributions on other equity instruments - - - - (35) (35)
Total transactions with owners - - - - (35) (35)
At 30 June 2023 370 (576) 2,900 2,694 782 3,476
Comprehensive income
Profit for the period - - 126 126 45 171
Other comprehensive income
Movements in revaluation reserve in respect of debt securities held at fair - 2 - 2 2
value through other comprehensive income, net of tax
Movements in cash flow hedging reserve, net of tax - 276 - 276 - 276
Movements in foreign currency translation reserve, net of tax - (15) - (15) - (15)
Total other comprehensive income - 263 - 263 - 263
Total comprehensive income - 263 126 389 45 434
Transactions with owners
Distributions on other equity instruments - - - - (45) (45)
Net issuance of other equity instruments - - - - 26 26
Loss on repayment of other equity instruments - - (15) (15) - (15)
Total transactions with owners - - (15) (15) (19) (34)
At 31 December 2023 370 (313) 3,011 3,068 808 3,876
(1) Total comprehensive income attributable to owners of the parent for the
half-year to 30 June 2023 was £116 million (half-year to 31 December 2023:
£434 million).
(2) Total equity attributable to owners of the parent at 30 June 2023 was
£3,476 million (31 December 2023: £3,876 million).
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
Half-year Half-year
to 30 Jun to 30 Jun 2023
2024 £m
£m
Cash flows from operating activities
Profit before tax 293 213
Adjustments for:
Change in operating assets(1) (2,924) (6,859)
Change in operating liabilities 1,001 7,982
Non-cash and other items 155 508
Net tax paid (32) (52)
Net cash (used in) provided by operating activities(1) (1,507) 1,792
Cash flows from investing activities
Proceeds from sale and maturity of financial assets - 3
Purchase of fixed assets (6) (1)
Proceeds from sale of fixed assets 1 -
Net cash (used in) provided by investing activities (5) 2
Cash flows from financing activities
Dividends paid to ordinary shareholders (450) -
Distributions on other equity instruments (40) (35)
Interest paid on subordinated liabilities (27) (31)
Interest paid on finance leases (2) (4)
Proceeds from issue of subordinated liabilities - 299
Repayment of subordinated liabilities - (284)
Net cash used in financing activities (519) (55)
Effect of exchange rate changes on cash and cash equivalents 54 (447)
Change in cash and cash equivalents(1) (1,977) 1,292
Cash and cash equivalents at beginning of period(1) 21,770 19,524
Cash and cash equivalents at end of period(1) 19,793 20,816
(1) See note 1.
The accompanying notes are an integral part of the condensed consolidated
half-year financial statements.
Cash and cash equivalents comprise cash and non-mandatory balances with
central banks and amounts due from banks with an original maturity of less
than three months.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
Note 1: Basis of preparation and accounting policies
These condensed consolidated half-year financial statements as at and for the
period to 30 June 2024 have been prepared in accordance with the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority (FCA) and
with International Accounting Standard 34 (IAS 34), Interim Financial
Reporting as adopted by the United Kingdom and comprise the results of Lloyds
Bank Corporate Markets plc (the Bank) together with its subsidiaries (the
Group). References within this document to LBCM refer to the Group as defined
here. Lloyds Banking Group plc is the ultimate parent company of LBCM and is
also referred to as LBG in this document. These statements do not include all
of the information required for full annual financial statements and should be
read in conjunction with LBCM's consolidated financial statements as at and
for the year ended 31 December 2023 which complied with international
accounting standards in conformity with the requirements of the Companies Act
2006 and were prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board
(IASB). Copies of the 2023 annual report and accounts are available at
www.lloydsbankinggroup.com and are also available upon request from Investor
Relations, Lloyds Banking Group plc, 25 Gresham Street, London EC2V 7HN.
The directors consider that it is appropriate to continue to adopt the going
concern basis in preparing these condensed consolidated half-year financial
statements. In reaching this assessment, the directors have taken into account
the uncertainties affecting the UK economy and their potential effects upon
LBCM's performance and projected funding and capital position; the impact of
further stress scenarios has also been considered. On this basis, the
directors are satisfied that LBCM will maintain adequate levels of funding and
capital for the foreseeable future.
LBCM has reassessed which items are included in cash and cash equivalents
against IAS 7 Statement of Cash Flows in the current period and as a result
has included reverse repurchase agreements due from banks with an original
maturity of less than three months within cash and cash equivalents in the
cash flow statement. The 2023 comparative cash flow statement has been
restated. The adjustment has no impact on the balance sheet or the income
statement but the following impact on the underlying lines within the cash
flow statement for LBCM: change in operating assets, net cash provided by
operating activities and change in cash and cash equivalents have increased by
£1,054 million, cash and cash equivalents at 1 January 2023 has increased by
£75 million and cash and cash equivalents at 30 June 2023 has increased by
£1,129 million. Cash and cash equivalents at 1 January 2024 has increased by
£1,574 million.
Except for the change to which items are included in cash and cash equivalents
there has been no change in the basis of accounting for any of the underlying
transactions. Comparatives have been presented on a consistent basis.
Presentational changes
The following change has been made to the presentation of LBCM's financial
statements, to allow for more relevant analysis of its financial performance
and position:
• property, plant and equipment of £44 million (31 December 2023: £48
million) is reported within other assets rather than separately on the face of
the balance sheet; and
• other comprehensive income is now presented gross of tax, with the tax
impact separately identified, rather than being presented net of tax
There has been no change in the basis of accounting for any of the underlying
transactions. Comparatives have been presented on a consistent basis.
The IASB has issued a number of minor amendments to IFRSs that are relevant to
LBCM effective 1 January 2024, including IFRS 16 Lease Liability in a Sale and
Leaseback, IAS 1 Non-current Liabilities with Covenants, and IAS 1
Classification of Liabilities as Current or Non-current. These amendments have
not had a significant impact on LBCM.
Future accounting developments
The IASB has issued Amendments to the Classification and Measurement of
Financial Instruments (IFRS 9 and IFRS 7) which is effective 1 January 2026
and IFRS 19 Subsidiaries without Public Accountability: Disclosures which is
effective 1 January 2027. Neither the amendment nor IFRS 19 are expected to
have a significant impact on LBCM. The IASB has also issued IFRS 18 Primary
Financial Statements which is effective 1 January 2027. The standard includes
no measurement changes, and LBCM is currently assessing the impact of this
standard on its income statement presentation.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 1: Basis of preparation and accounting policies (continued)
The Bank's ultimate parent undertaking and controlling party is Lloyds Banking
Group plc which is incorporated in Scotland. Lloyds Banking Group plc has
published consolidated accounts for the year to 31 December 2023 and copies
may be obtained from Investor Relations, Lloyds Banking Group, 25 Gresham
Street, London EC2V 7HN and available for download from
www.lloydsbankinggroup.com.
The financial information contained in this document does not constitute
statutory accounts within the meaning of section 434 of the Companies Act
2006 (the Act). The statutory accounts for the year ended 31 December 2023
were approved by the directors on 19 March 2024 and were delivered to the
Registrar of Companies on 26 March 2024. The auditors' report on those
accounts was unqualified and did not include a statement under sections 498(2)
(accounting records or returns inadequate or accounts not agreeing with
records and returns) or 498(3) (failure to obtain necessary information and
explanations) of the Act.
Note 2: Critical accounting judgements and key sources of estimation
uncertainty
The preparation of LBCM's financial statements in accordance with IFRS
requires management to make judgements, estimates and assumptions in applying
the accounting policies that affect the reported amounts of assets,
liabilities, income and expenses. Due to the inherent uncertainty in making
estimates, actual results reported in future periods may be based upon amounts
which differ from these estimates. Estimates, judgements and assumptions are
continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances. In preparing the financial statements,
LBCM has considered the impact of climate-related risks on its financial
position and performance. While the effects of climate change represent a
source of uncertainty, LBCM does not consider there to be a material impact on
its judgements and estimates from the physical, transition and other
climate-related risks in the short-term.
LBCM's significant judgements, estimates and assumptions are unchanged
compared to those disclosed in note 3 of LBCM's 2023 financial statements.
Further information on the critical accounting judgements and key sources of
estimation uncertainty for the allowance for expected credit losses is set out
in note 8.
Note 3: Operating expenses
Half-year Half-year
to 30 Jun to 30 Jun
2024 2023
£m £m
Staff costs 109 102
Amounts payable to fellow Lloyds Banking Group undertakings 101 102
Other 40 34
Total operating expenses 250 238
Note 4: Impairment
Half-year Half-year
to 30 Jun to 30 Jun
2024 2023
£m £m
Loans and advances to banks (1) (2)
Loans and advances to customers (9) (12)
Debt securities (2) 3
Financial assets at amortised cost (12) (11)
Loan commitments and financial guarantees (2) (7)
Total impairment credit (14) (18)
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 5: Tax
In accordance with IAS 34, LBCM's income tax expense for the half-year to 30
June 2024 is based on the best estimate of the weighted-average annual income
tax rate expected for the full financial year. The tax effects of one-off
items are not included in the weighted-average annual income tax rate, but are
recognised in the relevant period.
An explanation of the relationship between tax expense and accounting profit
is set out below:
Half-year Half-year
to 30 Jun to 30 Jun
2024 2023
£m £m
Profit before tax 293 213
UK corporation tax thereon at 25.0 per cent (2023: 23.5 per cent) 73 50
Impact of surcharge on banking profits 3 2
Non-deductible costs 1 10
Tax relief on coupons on other equity instruments (10) (8)
Differences in overseas tax rates (5) (7)
Other adjustments in respect of prior years 1 -
Other (1) (1)
Tax expense 62 46
Note 6: Fair values of financial assets and liabilities
The valuations of financial instruments have been classified into three levels
according to the quality and reliability of information used to determine
those fair values. Note 31 to LBCM's financial statements for the year ended
31 December 2023 details the definitions of the three levels in the fair
value hierarchy.
Financial instruments classified as financial assets at fair value through
profit or loss, derivative financial instruments, financial assets at fair
value through other comprehensive income and financial liabilities at fair
value through profit or loss are recognised at fair value.
LBCM manages valuation adjustments for its derivative exposures on a net
basis; LBCM determines their fair values on the basis of their net exposures.
In all other cases, fair values of financial assets and liabilities measured
at fair value are determined on the basis of their gross exposures.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 6: Fair values of financial assets and liabilities (continued)
The following tables provide an analysis of the financial assets and
liabilities of LBCM that are carried at fair value in LBCM's consolidated
balance sheet, grouped into levels 1 to 3 based on the degree to which the
fair value is observable. There were no significant transfers between level 1
and level 2 during the period.
Financial assets Level 1 Level 2 Level 3 Total
£m £m £m £m
At 30 June 2024
Financial assets at fair value through profit or loss:
Loans and advances to customers - 687 2 689
Reverse repurchase agreements - 19,815 - 19,815
Debt securities 3,685 888 142 4,715
Treasury and other bills 12 - - 12
Total financial assets at fair value through profit or loss 3,697 21,390 144 25,231
Derivative financial instruments 7 19,686 360 20,053
Total financial assets carried at fair value 3,704 41,076 504 45,284
At 31 December 2023
Financial assets at fair value through profit or loss:
Loans and advances to customers - 23 2 25
Reverse repurchase agreements - 17,414 - 17,414
Debt securities 3,596 750 153 4,499
Treasury and other bills 51 - - 51
Total financial assets at fair value through profit or loss 3,647 18,187 155 21,989
Derivative financial instruments 13 22,160 433 22,606
Total financial assets carried at fair value 3,660 40,347 588 44,595
Financial liabilities Level 1 Level 2 Level 3 Total
£m £m £m £m
At 30 June 2024
Financial liabilities at fair value through profit or loss:
Liabilities in respect of securities sold under repurchase agreements - 20,667 - 20,667
Short positions in securities 1,920 9 - 1,929
Other - 51 - 51
Total financial liabilities at fair value through profit or loss 1,920 20,727 - 22,647
Derivative financial instruments 9 13,959 255 14,223
Total financial liabilities carried at fair value 1,929 34,686 255 36,870
At 31 December 2023
Financial liabilities at fair value through profit or loss:
Liabilities in respect of securities sold under repurchase agreements - 18,101 - 18,101
Short positions in securities 1,569 5 - 1,574
Other - 11 - 11
Total financial liabilities at fair value through profit or loss 1,569 18,117 - 19,686
Derivative financial instruments 10 17,213 353 17,576
Total financial liabilities carried at fair value 1,579 35,330 353 37,262
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 6: Fair values of financial assets and liabilities (continued)
Valuation control framework
Key elements of the valuation control framework include model validation
(incorporating pre-trade and post-trade testing), product implementation
review and independent price verification. The framework covers processes for
all 3 levels in the fair value hierarchy. Formal committees meet quarterly to
discuss and approve valuations in more judgemental areas.
Transfers into and out of level 3 portfolios
Transfers out of level 3 portfolios arise when inputs that could have a
significant impact on the instrument's valuation become market observable;
conversely, transfers into the portfolios arise when sources of data cease to
be observable.
Valuation methodology
For level 2 and level 3 portfolios, there is no significant change to the
valuation methodology (techniques and inputs) disclosed in LBCM's financial
statements for the year ended 31 December 2023 applied to these portfolios.
Movements in level 3 portfolio
The tables below analyse movements in the level 3 financial assets portfolio.
Financial Financial Derivative assets Total
assets at assets at £m financial
fair value fair value assets
through through other carried at
profit or loss comprehensive fair value
£m income £m
£m
At 1 January 2024 155 - 433 588
Exchange and other adjustments - - 2 2
Losses recognised in the income statement within other income (15) - (60) (75)
Purchases/increases 4 - 7 11
Sales/repayments - - (22) (22)
Transfers into the level 3 portfolio - - - -
Transfers out of the level 3 portfolio - - - -
At 30 June 2024 144 - 360 504
Losses recognised in the income statement, within other income, relating to (15) - (41) (56)
the change in fair value of those assets held at 30 June 2024
At 1 January 2023 158 6 565 729
Exchange and other adjustments (8) - (12) (20)
Losses recognised in the income statement within other income (8) - (55) (63)
Purchases/increases 8 - 40 48
Sales/repayments - (2) (20) (22)
Transfers into the level 3 portfolio - - - -
Transfers out of the level 3 portfolio - - (3) (3)
At 30 June 2023 150 4 515 669
Losses recognised in the income statement, within other income, relating to (8) - (58) (66)
the change in fair value of those assets held at 30 June 2023
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 6: Fair values of financial assets and liabilities (continued)
The tables below analyse movements in the level 3 financial liabilities
portfolio.
Derivative liabilities
£m
At 1 January 2024 353
Exchange and other adjustments 16
Gains recognised in the income statement within other income (97)
Purchases/increases 5
Sales/repayments (22)
At 30 June 2024 255
Gains recognised in the income statement, within other income, relating to the (52)
change in fair value of those liabilities held at 30 June 2024
At 1 January 2023 494
Exchange and other adjustments (8)
Gains recognised in the income statement within other income (71)
Purchases/increases 31
Sales/repayments (29)
At 30 June 2023 417
Gains recognised in the income statement, within other income, relating to the (74)
change in fair value of those liabilities held at 30 June 2023
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 6: Fair values of financial assets and liabilities (continued)
Sensitivity of level 3 valuations
The tables below set out the effects of reasonably possible alternative
assumptions for categories of level 3 financial assets and financial
liabilities.
Effect of reasonably
possible alternative
assumptions(1)
At 30 June 2024 Valuation Significant unobservable inputs(2) Carrying value Favourable changes Unfavourable
techniques £m £m changes
£m
Financial assets at fair value through profit or loss
Loans and advances to customers Discounted cash flows Spread (+/- 17bps) 2 - -
Debt securities Discounted cash flows Credit spreads (discount factor) and inflation volatility (+/- 17bps) 142 24 (24)
144
Derivative financial assets
Interest rate derivatives Option pricing model Interest rate volatility 360 6 (4)
(13-200bps)
Level 3 financial assets carried at fair value 504
Derivative financial liabilities
Interest rate derivatives Option pricing model Interest rate volatility 255 14 (16)
(13-200bps)
Level 3 financial liabilities carried at fair value 255
(1) Where the exposure to an unobservable input is managed on a net basis,
only the net impact is shown in the table.
(2) Ranges are shown where appropriate and represent the highest and lowest
inputs used in the level 3 valuations.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 6: Fair values of financial assets and liabilities (continued)
Effect of reasonably
possible alternative
assumptions(1)
At 31 December 2023 Valuation Significant Carrying value Favourable changes Unfavourable
techniques unobservable inputs(2) £m £m changes
£m
Financial assets at fair value through profit or loss
Loans and advances to customers Discounted cash flows Spread (+/- 20bps) 2 - -
Debt securities Discounted cash flows Credit spreads (discount factor) and inflation volatility (+/- 6bps) 153 30 (30)
155
Derivative financial assets
Interest rate derivatives Option pricing model Interest rate volatility (17.1-104.9bps) 433 6 (3)
Level 3 financial assets carried at fair value 588
Derivative financial liabilities
Interest rate derivatives Option pricing model Interest rate volatility (17.1-104.9bps) 353 14 (15)
Level 3 financial liabilities carried at fair value 353
(1) Where the exposure to an unobservable input is managed on a net basis,
only the net impact is shown in the table.
(2) Ranges are shown where appropriate and represent the highest and lowest
inputs used in the level 3 valuations.
Unobservable inputs
Significant unobservable inputs affecting the valuation of debt securities and
derivatives are unchanged from those described in the Group's financial
statements for the year ended 31 December 2023.
Reasonably possible alternative assumptions
Valuation techniques applied to many of LBCM's level 3 instruments often
involve the use of two or more inputs whose relationship is interdependent.
The calculation of the effect of reasonably possible alternative assumptions
included in the table above reflects such relationships and is unchanged from
that described in LBCM's financial statements for the year ended 31 December
2023.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 6: Fair values of financial assets and liabilities (continued)
The table below summarises the carrying values of financial assets and
liabilities measured at amortised cost in LBCM's consolidated balance sheet.
The fair values presented in the table are at a specific date and may be
significantly different from the amounts which will actually be paid or
received on the maturity or settlement date.
At 30 June 2024 At 31 December 2023
Carrying Fair Carrying Fair
value value value value
£m £m £m £m
Financial assets
Loans and advances to banks 1,183 1,183 1,753 1,753
Loans and advances to customers 16,875 16,856 16,447 16,376
Reverse repurchase agreements 7,131 7,131 6,020 6,020
Debt securities 356 348 374 368
Due from fellow Lloyds Banking Group undertakings 538 538 297 297
Financial assets at amortised cost 26,083 26,056 24,891 24,814
Financial liabilities
Deposits from banks 2,182 2,182 2,078 2,078
Customer deposits 28,523 28,551 29,439 29,462
Repurchase agreements at amortised cost 66 66 1 1
Due to fellow Lloyds Banking Group undertakings 1,175 1,175 1,213 1,213
Debt securities in issue at amortised cost 16,015 15,981 15,378 15,273
Subordinated liabilities 746 746 755 755
The carrying amount of the following financial instruments is a reasonable
approximation of fair value: cash and balances at central banks, items in the
course of collection from banks and items in course of transmission to banks.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 7: Loans and advances to customers
Half-year to 30 June 2024
Gross carrying amount Allowance for expected credit losses
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
£m £m £m £m £m £m £m £m
At 1 January 2024 16,264 193 9 16,466 14 5 - 19
Exchange and other adjustments (158) - - (158) - - - -
Transfers to Stage 1 25 (25) - - - - - -
Transfers to Stage 2 (13) 13 - - - - - -
Transfers to Stage 3 (1) (18) 19 - - (1) 1 -
Net change in ECL due to transfers - - - -
- (1) 1 -
Impact of transfers between stages 11 (30) 19 -
Other changes in credit quality (4) (1) - (5)
Additions and repayments 622 (28) (17) 577 (3) (1) - (4)
(Credit) charge to the (7) (3) 1 (9)
income statement
Advances written off (1) (1) (1) (1)
Recoveries of advances written off in previous years - - - -
At 30 June 2024 16,739 135 10 16,884 7 2 - 9
Allowance for ECL (7) (2) - (9)
Net carrying amount 16,732 133 10 16,875
Drawn ECL coverage(1) (%) - 1.5 - 0.1
Year ended 31 December 2023
Gross carrying amount Allowance for expected credit losses
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
£m £m £m £m £m £m £m £m
At 1 January 2023 18,084 1,060 22 19,166 23 15 1 39
Exchange and other adjustments (603) (15) - (618) - - (1) (1)
Transfers to Stage 1 636 (636) - - 8 (8) - -
Transfers to Stage 2 (47) 47 - - - - - -
Transfers to Stage 3 (2) - 2 - - - - -
Net change in ECL due to transfers (6) 1 - (5)
2 (7) - (5)
Impact of transfers between stages 587 (589) 2 -
Other changes in credit quality (1) - 2 1
Additions and repayments (1,804) (263) (14) (2,081) (10) (3) (1) (14)
(Credit) charge to the income statement (9) (10) 1 (18)
Advances written off (2) (2) (2) (2)
Recoveries of advances written off in previous years 1 1 1 1
At 31 December 2023 16,264 193 9 16,466 14 5 - 19
Allowance for ECL (14) (5) - (19)
Net carrying amount 16,250 188 9 16,447
Drawn ECL coverage(1) (%) 0.1 2.6 - 0.1
(1) Allowance for expected credit losses on loans and advances to customers
as a percentage of gross loans and advances to customers.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 7: Loans and advances to customers (continued)
The movement tables are compiled by comparing the position at the end of the
period to that at the beginning of the year. Transfers between stages are
deemed to have taken place at the start of the reporting period, with all
other movements shown in the stage in which the asset is held at the end of
the period.
Additions and repayments comprise new loans originated and repayments of
outstanding balances throughout the reporting period.
LBCM's impairment charge comprises impact of transfers between stages, other
changes in credit quality and additions and repayments.
Advances written off have first been transferred to Stage 3 and then acquired
a full allowance through other changes in credit quality. Recoveries of
advances written off in previous years are shown at the full recovered value,
with a corresponding entry in repayments and release of allowance through
other changes in credit quality.
(
)
Note 8: Allowance for expected credit losses
The calculation of LBCM's allowance for expected credit loss allowances
requires LBCM to make a number of judgements, assumptions and estimates. These
are set out in detail in LBCM's 2023 annual report and accounts, with the most
significant set out below.
The table below analyses total ECL allowance, separately identifying the
amounts that have been modelled, those that have been individually assessed
and those arising through the application of judgemental adjustment.
Modelled Other judgemental adjustments Total
ECL £m ECL
£m £m
At 30 June 2024 22 (7) 15
At 31 December 2023 34 (3) 31
Other judgemental adjustments
Other judgemental adjustments include corporate insolvency rates of £(7)
million (31 December 2023: £(5) million)
The volume of UK corporate insolvencies has continued to remain well above
December 2019 levels, revealing a marked misalignment between observed UK
corporate insolvencies and LBCM's credit performance which has been better
than this. This dislocation gives rise to uncertainty over the drivers of
observed trends and the appropriateness of LBCM's Commercial Banking model
response which uses observed UK corporate insolvencies data to anchor future
loss estimates to. Given LBCM's asset quality remains strong with low new
defaults, a negative adjustment is applied by using the long-term average
rate. The slightly greater negative adjustment in the period reflects the
widening gap between the increasing industry level and the long-term average
rate used.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 8: Allowance for expected credit losses (continued)
Base case and MES economic assumptions
LBCM's base case economic scenario as at 30 June 2024 has been updated to
reflect ongoing geopolitical and economic developments, as the slow reduction
of inflationary pressures brings into view a shift to less restrictive
monetary policies globally. LBCM's updated base case scenario has three
conditioning assumptions: first, the wars in Ukraine and the Middle East
remain geographically contained; second, the UK's post-election economic
policies retain the framework of the inflation target and fiscal rules, while
allowing for an increase in both current and capital public spending; and
third, the outcome of the US election broadly maintains economic policy
continuity, including an unchanged position for the Federal Reserve.
Based on these assumptions and incorporating the economic data published in
the second quarter of 2024, LBCM's base case scenario is for a gradual
expansion of economic activity and a slight rise in the unemployment rate,
alongside modest changes in residential and commercial property prices.
Following a gradual reduction in inflationary pressures, UK Bank Rate is
expected to be lowered twice during 2024. Risks around this base case economic
view lie in both directions and are largely captured by the generation of
alternative economic scenarios.
LBCM 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 in the second
quarter of 2024, for which actuals may have since emerged prior to
publication. LBCM's base case economic scenario predated the results of the UK
General Election and, as such, information that has become available since the
election has not been included.
LBCM's approach to generating alternative economic scenarios is set out in
detail in note 14 to the financial statements for the year ended 31 December
2023. LBCM has taken into account the latest available information at the
reporting date in defining its base case scenario and generating alternative
economic scenarios. A small refinement was made to LBCM's approach during the
first half of 2024, with alternative economic scenarios now dispersing from
the base case after the balance sheet date. This is one quarter later than
previously adopted reflecting the use of a base case that is now set closer to
the reporting date than at the onset of IFRS 9. As a result, all scenarios
include the same forecasted level for key variables in the second quarter of
2024, for which actuals may have since emerged prior to publication.
For June 2024, LBCM continues to judge it appropriate to include a
non-modelled severe downside scenario for LBCM ECL calculations. The scenario
is now generated as a simple average of a fully modelled severe scenario,
better representing shocks to demand, and a scenario with higher paths for UK
Bank Rate and CPI inflation, as a representation of shocks to supply. The
combined 'adjusted' scenario used in ECL modelling is considered to better
reflect the risks around LBCM's base case view in an economic environment
where demand and supply shocks are more balanced.
Scenarios by year
The key UK economic assumptions made by LBCM are shown in the following tables
across a number of measures explained below.
Annual assumptions
UK and US Gross domestic product (GDP) growth is presented as an annual change
and UK Commercial real estate price growth is presented as the growth in the
index over each year. UK and US unemployment rates and UK Bank Rate are
averages over the year.
Five-year average
The five-year average reflects the average annual growth rate, or level, over
the five-year period. It includes movements within the current reporting year,
such that the position as of 30 June 2024 covers the five years 2024 to 2028.
The inclusion of the reporting year within the five-year period reflects the
need to predict variables which remain unpublished at the reporting date and
recognises that credit models utilise both level and annual changes. The use
of calendar years maintains a comparability between the annual assumptions
presented.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 8: Allowance for expected credit losses (continued)
At 30 June 2024 2024 2025 2026 2027 2028 2024
% % % % % to 2028
average
%
Upside
UK Gross domestic product growth 1.1 2.3 1.7 1.5 1.4 1.6
UK Unemployment rate 4.1 3.2 3.0 2.9 2.9 3.2
UK Commercial real estate price growth 2.2 8.7 2.4 2.8 1.2 3.4
UK Bank Rate 5.17 5.30 5.17 5.33 5.55 5.31
US Gross domestic product growth 2.6 3.6 2.8 1.2 0.6 1.9
US Unemployment rate 3.9 3.6 3.0 3.1 3.6 3.4
Base case
UK Gross domestic product growth 0.8 1.2 1.6 1.6 1.6 1.3
UK Unemployment rate 4.5 4.8 4.8 4.6 4.6 4.7
UK Commercial real estate price growth (1.6) 1.2 0.0 1.9 1.0 0.5
UK Bank Rate 5.06 4.19 3.63 3.50 3.50 3.98
US Gross domestic product growth 2.0 1.5 2.0 1.8 1.7 1.6
US Unemployment rate 4.1 4.4 4.3 4.3 4.2 4.3
Downside
UK Gross domestic product growth 0.6 (0.5) 0.8 1.5 1.6 0.8
UK Unemployment rate 4.9 6.9 7.5 7.4 7.2 6.7
UK Commercial real estate price growth (4.7) (6.7) (4.1) (0.8) (1.3) (3.5)
UK Bank Rate 4.97 2.77 1.38 0.89 0.63 2.13
US Gross domestic product growth 1.5 (0.6) 0.6 1.9 2.4 1.0
US Unemployment rate 4.2 5.5 6.4 6.5 6.2 5.8
Severe downside
UK Gross domestic product growth 0.1 (2.2) 0.4 1.2 1.5 0.2
UK Unemployment rate 5.5 9.4 10.2 10.1 9.8 9.0
UK Commercial real estate price growth (9.1) (15.1) (8.6) (5.3) (4.7) (8.6)
UK Bank Rate - modelled 4.81 1.12 0.16 0.05 0.02 1.23
UK Bank Rate - adjusted(1) 5.09 3.22 2.33 2.02 1.79 2.89
US Gross domestic product growth 0.9 (3.1) (1.2) 1.8 3.3 0.3
US Unemployment rate 4.4 6.9 8.9 9.2 8.6 7.6
Probability-weighted
UK Gross domestic product growth 0.8 0.7 1.3 1.5 1.5 1.2
UK Unemployment rate 4.6 5.4 5.6 5.5 5.4 5.3
UK Commercial real estate price growth (2.1) (0.5) (1.3) 0.6 (0.2) (0.7)
UK Bank Rate - modelled 5.04 3.79 3.07 2.92 2.90 3.55
UK Bank Rate - adjusted(1) 5.07 4.00 3.29 3.12 3.08 3.71
US Gross domestic product growth 1.9 1.0 1.5 1.6 1.7 1.4
US Unemployment rate 4.1 4.7 5.0 5.1 5.1 4.8
(1) The adjustment to UK Bank Rate and CPI inflation in the severe downside
is considered to better reflect the risks to LBCM's base case view in an
economic environment where the risks of supply and demand shocks are seen as
more balanced.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 8: Allowance for expected credit losses (continued)
At 31 December 2023 2023 2024 2025 2026 2027 2023
% % % % % to 2027
average
%
Upside
UK Gross domestic product growth 0.3 1.5 1.7 1.7 1.9 1.4
UK Unemployment rate 4.0 3.3 3.1 3.1 3.1 3.3
UK Commercial real estate price growth (3.9) 9.0 3.8 1.3 1.3 2.2
UK Bank Rate 4.94 5.72 5.61 5.38 5.18 5.37
US Gross domestic product growth 2.5 2.7 3.1 1.7 0.5 2.0
US Unemployment rate 3.6 3.9 3.3 3.0 3.4 3.4
Base case
UK Gross domestic product growth 0.3 0.5 1.2 1.7 1.9 1.1
UK Unemployment rate 4.2 4.9 5.2 5.2 5.0 4.9
UK Commercial real estate price growth (5.1) (0.2) 0.1 0.0 0.8 (0.9)
UK Bank Rate 4.94 4.88 4.00 3.50 3.06 4.08
US Gross domestic product growth 2.4 1.0 1.4 1.7 1.6 1.6
US Unemployment rate 3.6 4.3 4.5 4.4 4.3 4.2
Downside
UK Gross domestic product growth 0.2 (1.0) (0.1) 1.5 2.0 0.5
UK Unemployment rate 4.3 6.5 7.8 7.9 7.6 6.8
UK Commercial real estate price growth (6.0) (8.7) (4.0) (2.1) (1.2) (4.4)
UK Bank Rate 4.94 3.95 1.96 1.13 0.55 2.51
US Gross domestic product growth 2.3 (0.4) (0.6) 1.0 2.1 0.9
US Unemployment rate 3.7 4.8 6.1 6.6 6.4 5.5
Severe downside
UK Gross domestic product growth 0.1 (2.3) (0.5) 1.3 1.8 0.1
UK Unemployment rate 4.5 8.7 10.4 10.5 10.1 8.8
UK Commercial real estate price growth (7.7) (19.5) (10.6) (7.7) (5.2) (10.3)
UK Bank Rate - modelled 4.94 2.75 0.49 0.13 0.03 1.67
UK Bank Rate - adjusted(1) 4.94 6.56 4.56 3.63 3.13 4.56
US Gross domestic product growth 2.2 (2.2) (3.0) 0.1 2.5 0.0
US Unemployment rate 3.7 5.5 8.2 9.3 9.0 7.1
Probability-weighted
UK Gross domestic product growth 0.3 0.1 0.8 1.6 1.9 0.9
UK Unemployment rate 4.2 5.3 5.9 5.9 5.7 5.4
UK Commercial real estate price growth (5.3) (1.9) (1.1) (1.0) (0.2) (1.9)
UK Bank Rate - modelled 4.94 4.64 3.52 3.02 2.64 3.75
UK Bank Rate - adjusted(1) 4.94 5.02 3.93 3.37 2.95 4.04
US Gross domestic product growth 2.4 0.8 0.8 1.3 1.5 1.3
US Unemployment rate 3.7 4.5 5.0 5.1 5.2 4.7
(1) The adjustment to UK Bank Rate and CPI inflation in the severe downside
was considered to better reflect the risks to LBCM's base case view in an
economic environment where supply shocks were the principal concern.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 8: Allowance for expected credit losses (continued)
Base case scenario by quarter
Gross domestic product growth is presented quarter-on-quarter. Commercial real
estate price growth is 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 30 June 2024 First Second Third Fourth First Second Third Fourth
quarter quarter quarter quarter quarter quarter quarter quarter
2024 2024 2024 2024 2025 2025 2025 2025
% % % % % % % %
UK Gross domestic product growth 0.6 0.4 0.3 0.2 0.3 0.3 0.4 0.4
UK Unemployment rate 4.3 4.5 4.6 4.7 4.8 4.9 4.9 4.8
UK Commercial real estate price growth (5.3) (5.3) (3.5) (1.6) (0.9) 0.2 (0.2) 1.2
UK Bank Rate 5.25 5.25 5.00 4.75 4.50 4.25 4.00 4.00
US Gross domestic product growth 0.3 0.3 0.1 0.2 0.4 0.5 0.5 0.5
US Unemployment rate 3.8 4.0 4.1 4.3 4.4 4.4 4.4 4.4
At 31 December 2023 First Second Third Fourth First Second Third Fourth
quarter quarter quarter quarter quarter quarter quarter quarter
2023 2023 2023 2023 2024 2024 2024 2024
% % % % % % % %
UK Gross domestic product growth 0.3 0.0 (0.1) 0.0 0.1 0.2 0.3 0.3
UK Unemployment rate 3.9 4.2 4.2 4.3 4.5 4.8 5.0 5.2
UK Commercial real estate price growth (18.8) (21.2) (18.2) (5.1) (4.1) (3.8) (2.2) (0.2)
UK Bank Rate 4.25 5.00 5.25 5.25 5.25 5.00 4.75 4.50
US Gross domestic product growth 0.6 0.5 1.3 0.0 0.0 0.1 0.2 0.3
US Unemployment rate 3.5 3.5 3.7 3.9 4.1 4.3 4.4 4.5
ECL sensitivity to economic assumptions
The table below shows LBCM's ECL for the probability-weighted, upside, base
case, downside and severe downside scenarios. The stage allocation for an
asset is based on the overall scenario probability-weighted PD and hence the
staging of assets is typically constant across all the scenarios. ECL for
post-model adjustments have been apportioned relative to their sensitivity in
each scenario. Judgements applied through changes to inputs are reflected in
the scenario sensitivities.
Probability- Upside Base case Downside Severe
weighted £m £m £m downside
£m £m
At 30 June 2024 15 8 12 19 32
At 31 December 2023 31 17 24 38 68
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 9: Debt securities in issue
At 30 Jun 2024 At 31 Dec 2023
Senior unsecured notes issued(1) 6,630 6,557
Certificates of deposit issued 5,738 4,963
Commercial paper 3,647 3,858
Total debt securities in issue 16,015 15,378
(1) At 30 June 2024 includes £2,716 million (31 December 2023: £2,720
million) which was previously disclosed as 'Amounts due to fellow Group
undertakings'.
Note 10: Dividends on ordinary shares
The Bank paid a dividend of £450 million on 25 March 2024 (no dividend was
paid during the half-year to 30 June 2023).
Note 11: Related party transactions
Balances and transactions with fellow Lloyds Banking Group undertakings
The Bank and its subsidiaries have balances due to and from the Bank's
ultimate parent company, Lloyds Banking Group plc, and fellow Lloyds Banking
Group undertakings. These are included on the balance sheet as follows:
At 30 Jun At 31 Dec
2024 2023
£m £m
Assets, included within:
Financial assets at fair value through profit or loss 75 54
Derivative financial instruments 3,182 3,173
Financial assets at amortised cost: due from fellow Lloyds Banking Group 538 297
undertakings
Liabilities, included within:
Due to fellow Lloyds Banking Group undertakings 1,175 1,213
Financial liabilities at fair value through profit or loss 500 45
Derivative financial instruments 1,942 2,291
Debt securities in issue at amortised cost 2,716 2,720
Subordinated liabilities 748 748
Other equity instruments:
Additional tier 1 instruments 808 808
During the half-year to 30 June 2024 LBCM earned £5 million (half-year to 30
June 2023: £4 million) of interest income and incurred £132 million
(half-year to 30 June 2023: £110 million) of interest expense on balances
and transactions with Lloyds Banking Group plc and fellow Group undertakings.
Other related party transactions
Other related party transactions for the half-year to 30 June 2024 are similar
in nature to those for the year ended 31 December 2023.
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)
(continued)
Note 12: Contingent liabilities, commitments and guarantees
Contingent liabilities, commitments and guarantees arising from the banking
business
At 30 June 2024 contingent liabilities, such as performance bonds and letters
of credit, arising from the banking business were £89 million (31 December
2023: £94 million).
The contingent liabilities of LBCM arise in the normal course of its banking
business and it is not practicable to quantify their future financial effect.
Total commitments and guarantees were £20,761 million (31 December 2023:
£21,627 million), of which in respect of undrawn formal standby facilities,
credit lines and other commitments to lend, £20,276 million (31 December
2023: £21,157 million) was irrevocable.
Legal actions and regulatory matters
In addition, in the course of its business LBCM is subject to other complaints
and threatened or actual legal proceedings (including class or group action
claims) brought by or on behalf of current or former employees, customers
(including their appointed representatives), investors or other third parties,
as well as legal and regulatory reviews, enquiries and examinations, requests
for information, audits, challenges, investigations and enforcement actions,
which could relate to a number of issues. This includes matters in relation to
compliance with applicable laws and regulations, such as those relating to
prudential regulation, consumer protection, investment advice, business
conduct, systems and controls, environmental, competition/anti-trust, tax,
anti-bribery, anti-money laundering and sanctions, some of which may be beyond
LBCM's control, both in the UK and overseas. Where material, such matters are
periodically reassessed, with the assistance of external professional advisers
where appropriate, to determine the likelihood of LBCM incurring a liability.
LBCM does not currently expect the final outcome of any such case to have a
material adverse effect on its financial position, operations or cash flows.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors listed below (being all the directors of Lloyds Bank Corporate
Markets plc) confirm that to the best of their knowledge these condensed
consolidated half-year financial statements have been prepared in accordance
with UK adopted International Accounting Standard 34, Interim Financial
Reporting, and that the half-year management report herein includes a fair
review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:
• an indication of important events that have occurred during the six
months ended 30 June 2024 and their impact on the condensed consolidated
half-year financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
• material related party transactions in the six months ended 30 June 2024
and any material changes in the related party transactions described in the
last annual report.
Signed on behalf of the Board by
Carla Antunes da Silva
Chief Executive Officer
30 July 2024
Lloyds Bank Corporate Markets plc Board of directors:
Executive directors
Carla Antunes da Silva (Chief Executive Officer)
Julienne Daglish (Chief Financial Officer)
Non-executive directors
Mark Basten
Eve Henrikson
Cecile Hillary
Andrew McIntyre
John Owen (Interim Chair)
Changes to the composition of the Board since 1 January 2024 up to the date of
this report are shown below:
Lord Lupton CBE (resigned 16 May 2024)
Rose St Louis (resigned 17 May 2024)
Nathan Bostock (to be appointed as Non-executive director and Chair on 1
August 2024)
INDEPENDENT REVIEW REPORT TO LLOYDS BANK CORPORATE MARKETS PLC
Conclusion
We have been engaged by Lloyds Bank Corporate Markets plc and its subsidiaries
(the Group) to review the condensed consolidated set of financial statements
in the half-yearly financial report for the six months ended 30 June 2024
which comprises the condensed consolidated income statement, the condensed
consolidated statement of comprehensive income, the condensed consolidated
balance sheet, the condensed consolidated statement of changes in equity, the
condensed consolidated cash flow statement and related notes 1 to 12.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed consolidated set of financial statements in the
half-yearly financial report for the six months ended 30 June 2024 is not
prepared, in all material respects, in accordance with United Kingdom adopted
International Accounting Standard 34 and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the Group will be
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed consolidated set of financial statements included in
this half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE (UK) 2410, however future events or conditions may cause the Group
to cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the Group a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our conclusion, including our
Conclusions Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the basis for conclusion
paragraph of this report.
INDEPENDENT REVIEW REPORT TO LLOYDS BANK CORPORATE MARKETS PLC (continued)
Use of our report
This report is made solely to the Group in accordance with International
Standard on Review Engagements (UK) 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity" issued by the
Financial Reporting Council. Our work has been undertaken so that we might
state to the Bank those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Bank, for our review work, for this report, or for the conclusions we
have formed.
Deloitte LLP
Statutory Auditor
London, England
30 July 2024
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 Corporate Markets 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; 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; exposure to counterparty risk; the impact of
any regulatory and/or legislative divergence between the UK and EU as a result
of the exit by the UK from the European Union (EU) and the effects of the
EU-UK Trade and Cooperation Agreement; 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; tightening of monetary policy in
jurisdictions in which the Group operates; natural pandemic and other
disasters; risks concerning borrower and counterparty credit quality; 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
control of the Group or Lloyds Banking Group plc. Please refer to the Base
Prospectus for the Group's Euro Medium-Term Note Programme and 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
douglas.radcliffe@lloydsbanking.com
Nora Thoden
Director of Investor Relations - ESG
020 7356 2334
nora.thoden@lloydsbanking.com
Tom Grantham
Investor Relations Senior Manager
07851 440 091
thomas.grantham@lloydsbanking.com
Sarah Robson
Investor Relations Senior Manager
07494 513 983
sarah.robson2@lloydsbanking.com
CORPORATE AFFAIRS
Grant Ringshaw
External Relations Director
020 7356 2362
grant.ringshaw@lloydsbanking.com
Matt Smith
Head of Media Relations
07788 352 487
matt.smith@lloydsbanking.com
Copies of this News Release may be obtained from:
Investor Relations, Lloyds Banking Group plc, 25 Gresham Street, London EC2V
7HN
The statement can also be found on the Lloyds Banking Group's website -
www.lloydsbankinggroup.com
Registered office: Lloyds Bank Corporate Markets plc, 25 Gresham Street,
London EC2V 7HN
Registered in England No. 10399850
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