Lloyds Banking Group (LLOY) Q3 2024 earnings summary

Executive summary

• Delivered robust Q3 2024 performance with income growth, cost discipline, and strong asset quality, reaffirming 2024 guidance and confidence in 2026 commitments.

• Statutory profit after tax for the first nine months was £3.8bn, down 12% year-over-year, with a return on tangible equity (ROTE) of 14%.

• Strategic transformation is progressing, driving higher, more sustainable returns and improved customer propositions.

• Underlying profit before impairment was £5.6bn, down 19% year-over-year; underlying profit after impairment was £5.4bn, down 12%.

• Purpose-driven approach focused on helping Britain prosper, reaffirming 2024 guidance and expressing confidence in 2026 targets.

Financial highlights

• Net income for nine months was £12.7bn, down 7% year-over-year; Q3 net income up 5% sequentially.

• Net interest income YTD £9.6bn, down 8% YoY; Q3 NII £3.2bn, up 2% QoQ; NIM at 2.95% in Q3.

• Other income YTD £4.2bn, up 9% YoY; Q3 £1.4bn.

• Operating costs for nine months were £7bn, up 5% YoY, including higher strategic investment and inflationary pressure; cost-to-income ratio at 55.9% YTD, 53.4% in Q3.

• CET1 ratio at 14.3% after dividend accrual, with strong capital generation of 132bps YTD.

Outlook and guidance

• 2024 guidance reaffirmed: NIM >290bps, operating costs ~£9.4bn, cost:income ratio <50%, AQR <20bps, ROTE ~13%.

• CET1 ratio expected to pay down to ~13.5% by year-end; Basel 3.1 impact seen as modestly positive from 2026.

• 2026 targets reaffirmed: sub-50% cost-to-income ratio, ROTE >15%, and capital return of ~200bps.

• Asset quality ratio forecasted to remain <20bps for 2024.

• Risk-weighted assets expected at £220–225bn for 2024.