Lloyds Banking Group (LLOY) investor relations material

Business overview and strategy

• Operates four core divisions: Retail, Commercial, Insurance, and Equity Investments & Central Items, with a strong presence in digital banking and integrated financial services.

• Trusted brands include Halifax, Bank of Scotland, Scottish Widows, and MBNA, serving a broad customer base across the UK.

• Strategic transformation since 2021 has driven net income growth, improved distribution productivity, and significant cost savings.

• Focus on digital and AI leadership, with over 50 live GenAI use cases delivering operational efficiencies and customer benefits.

• Committed to unlocking new growth opportunities and further strengthening the core franchise beyond 2026.

Financial performance and outlook

• Net income reached £18.3bn in 2025, up 7% YoY, with statutory profit after tax of £4.8bn, up 6% YoY.

• Net interest income grew 6% to £13.6bn, with a net interest margin of 306bps, and other income rose 9% to £6.1bn.

• Lending increased 5% to £481.1bn and deposits rose 3% to £496.5bn in 2025.

• Operating costs were £9.76bn, up 3% YoY, with a cost:income ratio of 58.6% (53.3% excluding remediation), targeting <50% in 2026.

• Upgraded 2026 guidance: net interest income c.£14.9bn, operating costs <£9.9bn, cost:income ratio <50%, ROTE >16%.

Capital, dividends, and shareholder returns

• Strong capital generation enabled a 15% increase in dividend per share to 3.65p and a £1.75bn share buyback in 2025.

• CET1 ratio at 13.2%, with a target to pay down to c.13.0% in 2026.

• Over £15bn distributed to shareholders since 2021, with progressive and sustainable ordinary dividends.

• Now reviewing excess capital distributions every half year.