Form 6-K Lloyds Banking Group For: Mar 31

April 27, 2022 10:19 AM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
27 April 2022
Commission File number 001-15246
LLOYDS BANKING GROUP plc
(Translation of registrant's name into English)
25 Gresham Street
London
EC2V 7HN
United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒    Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b) (1) ________.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b) (7) ________.
This report on Form 6-K shall be deemed incorporated by reference into the company's Registration Statement on Form F-3 (File No. 333-231902) and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.



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 Lloyds Banking Group 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; expectations about the impact of COVID-19; 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 include, but are not limited to: general economic and business conditions in the UK and internationally; market related risks, trends and developments; risks concerning borrower and counterparty credit quality; fluctuations in interest rates, inflation, exchange rates, stock markets and currencies; volatility in credit markets; volatility in the price of our securities; any impact of the transition from IBORs to alternative reference rates; the ability to access sufficient sources of capital, liquidity and funding when required; changes to the Group’s credit ratings; the ability to derive cost savings and other benefits including, but without limitation, as a result of any acquisitions, disposals and other strategic transactions; inability to capture accurately the expected value from acquisitions; potential changes in dividend policy; the ability to achieve strategic objectives; insurance risks; management and monitoring of conduct risk; exposure to counterparty risk; credit rating risk; tightening of monetary policy in jurisdictions in which the Group operates; instability in the global financial markets, including within the Eurozone, and as a result of ongoing uncertainty following the exit by the UK from the European Union (EU) and the effects of the EU-UK Trade and Cooperation Agreement; political instability including as a result of any UK general election and any further possible referendum on Scottish independence; operational risks; 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; natural pandemic (including but not limited to the COVID-19 pandemic) and other disasters; inadequate or failed internal or external processes or systems; acts of hostility or terrorism and responses to those acts, or other such events; geopolitical unpredictability; the war between Russia and Ukraine; risks relating to sustainability and climate change (and achieving climate change ambitions), including the Group’s ability along with the government and other stakeholders to measure, manage and mitigate the impacts of climate change effectively; changes in laws, regulations, practices and accounting standards or taxation; changes to regulatory capital or liquidity requirements and similar contingencies; assessment related to resolution planning requirements; the policies and actions of governmental or regulatory authorities or courts together with any resulting impact on the future structure of the Group; 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; projected employee numbers and key person risk; increased labour costs; assumptions and estimates that form the basis of our financial statements; the impact of competitive conditions; and exposure to legal, regulatory or competition proceedings, investigations or complaints. A number of these influences and factors are beyond the Group’s control. Please refer to 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.
EXPLANATORY NOTE
This report on Form 6-K contains the interim report of Lloyds Banking Group plc, which includes the unaudited consolidated interim results for the three months ended 31 March 2022 and is being incorporated by reference into the Registration Statement with File No. 333-231902.
Page 1 of 12


FINANCIAL REVIEW

Income statement
In the three months to 31 March 2022 the Group reported a profit before tax of £1,623 million compared to £1,898 million in the same period in 2021, representing a decrease of £275 million as higher total income was more than offset by the impact of a net impairment charge for the period compared to a net credit in the first quarter of 2021. Profit after tax was £1,204 million and earnings per share were 1.5 pence.
Total income, net of insurance claims, increased by £261 million, or 7 per cent, to £4,132 million in the three months to 31 March 2022 compared to £3,871 million in the first three months of 2021; there was an increase of £866 million in net interest income offset by a reduction of £605 million in other income, net of insurance claims.
Net interest income was £3,132 million, an increase of £866 million compared to £2,266 million in the three months to 31 March 2021. During the first three months of the year amounts payable to unitholders in Open-Ended Investment Companies (OEICs) included in net interest income amounted to a credit of £233 million compared to a charge of £342 million in the three months to 31 March 2021, reflecting falls in the value of underlying investments, with losses on both equities and debt investments in the three months to 31 March 2022. Excluding these amounts, net interest income increased £291 million, or 11 per cent, to £2,899 million compared to £2,608 million in the first three months of 2021. The increased net interest income was driven by growth in average interest-earning assets and deposits as well as an improved margin; the net interest margin benefited from bank base rate increases and deposit growth, offsetting mortgage book margin impacts.
Other income net of insurance claims amounted to £1,000 million in the three months to 31 March 2022, a reduction of £605 million compared to £1,605 million in the three months to 31 March 2021. Net trading income within the Group’s insurance activities was a loss of £5,941 million compared to net gains of £1,533 million in three months to 31 March 2021, a deterioration of £7,474 million which offset a £6,902 million reduction in insurance claims and the £575 million movement in the amounts payable to unitholders in OEICs included in net interest income. Net fee and commission income increased to £359 million, compared to £303 million in the first quarter of 2021 due to higher card and other transaction-based income streams, reflecting improved levels of customer activity compared to the first quarter of 2021. Net trading income in the Group’s banking activities decreased to £259 million, compared to £320 million for the first three months of 2021, in part due to the impact of interest rate movements on valuation adjustments. Other operating income decreased to £201 million compared to £335 million in the three months to 31 March 2021 as a result of a reduction in income from the value of in-force insurance business, reflecting a negative economic variance in the current period.
Total operating expenses increased by £5 million to £2,332 million compared to £2,327 million in the first three months of 2021. There was an increase of £18 million in operating costs; the impact of staff pay increases was offset by staff number reductions and an increase in IT-related costs, as a result of the Group’s strategic investment, was in part offset by increased gains on disposal of operating lease assets as a result of strong used car prices. The charge in respect of regulatory provisions was £13 million lower at £52 million and largely related to pre-existing programmes. There have been no further charges relating to HBOS Reading since the end of 2021 and the provision held continues to reflect the Group's estimate of its full liability, albeit significant uncertainties remain.
There was a net impairment charge in the quarter of £177 million, compared to a net credit of £354 million in the first quarter of 2021, largely reflecting a low incurred charge and a charge in the first quarter of 2022 as a result of revisions to the Group’s economic outlook, as an improvement from unemployment assumptions and house prices was offset by additional provisions taken to capture elevated inflation risk.
Overall the Group’s loan portfolio continues to be well-positioned, reflecting a prudent through-the-cycle approach to credit risk with high levels of security. The Group's expected credit loss (ECL) allowance remained stable in the first three months of the year at £4,099 million (31 December 2021: £4,042 million). The Group continues to retain £0.8 billion of net management judgements in respect of coronavirus (31 December 2021: £0.8 billion); within this, the Group has maintained its central adjustment of £0.4 billion to recognise the downside risks outside of the base case conditioning assumptions. As noted above, additional judgements have been raised to capture the increased risk of inflation and impact on the cost of living, with a further £0.1 billion added in the quarter, largely within the segments of the Retail book that are considered less resilient to disposable income shocks.
Page 2 of 12


FINANCIAL REVIEW (continued)
Following changes in credit risk measurement and modelling associated with CRD IV regulatory requirements during the quarter, the Group has amended its definition of Stage 3 for UK mortgages to maintain alignment between IFRS 9 and regulatory definitions of default. Default continues to be considered to have occurred when there is evidence that the customer is experiencing financial difficulty which is likely to significantly affect their ability to repay the amount due. For UK mortgages, this was previously deemed to have occurred no later than when a payment was 180 days past due; in line with CRD IV this has now been reduced to 90 days, as well as including end-of-term payments on interest-only accounts and all non-performing loans. Overall ECL is not impacted as management judgements were previously held in lieu of these known changes, however they result in £0.1 billion of ECL moving from Stage 1 and 2 to Stage 3 with £1.5 billion of additional assets in Stage 3. These changes also lead to £7.4 billion of additional assets moving to Stage 2 given the consequential change in approach to the prediction and modelling of up to date accounts and their likelihood of reaching the new broader definition of default in the future. Given these are up to date accounts with low probability of default that are moving to Stage 2, there is no material ECL impact. Absent this definitional change, the sustained low levels of new to arrears observed means that mortgage accounts that are classified as Stage 2, due to being in early arrears, have reduced slightly in the quarter.
The Group recognised a tax expense of £419 million in the period compared to £501 million in the first three months of 2021. On 2 February 2022, the UK Government substantively enacted a change in banking surcharge from 8 per cent to 3 per cent with effect from 1 April 2023. As a result of rate changes, including the impact of the surcharge reduction, the Group recognised a £25 million deferred tax charge in the income statement and a £65 million credit within other comprehensive income, increasing the Group’s net deferred tax asset by £40 million.
Balance sheet
Total assets were £23,350 million, or 3 per cent higher at £909,875 million at 31 March 2022 compared to £886,525 million at 31 December 2021. Cash and balances at central banks rose by £24,651 million to £101,071 million reflecting the placement of funds from increased available liquidity. Financial assets at amortised cost increased by £3,227 million, or 1 per cent, to £520,383 million at 31 March 2022 compared to £517,156 million at 31 December 2021, as a result of a £3,282 million increase in loans and advances to customers, net of impairment allowances and £1,509 million in debt securities, offset by a £1,236 million decrease in reverse repurchase agreement balances. The increase in loans and advances to customers, net of impairment allowances, was driven by continued growth in the open mortgage book and increases in Corporate and Institutional lending, partially offset by further reductions in the closed mortgage book and hedging impacts. Derivative assets were £2,565 million higher at £24,616 million compared to £22,051 million at 31 December 2021, reflecting the impacts of interest rate movements over the first three months of 2022. Other assets increased £4,644 million, mainly due to a £1,579 million increase in retirement benefit assets as a result of significant accelerated pension contributions in the period and a £1,314 million increase in settlement balances since the 2021 year end. These asset increases have been partly offset by a reduction of £7,502 million, or 4 per cent in financial assets at fair value through profit or loss to £199,269 million at 31 March 2022 with decreases in policyholder investments within the insurance business reflecting market losses in the first quarter of 2022. Financial assets at fair value through other comprehensive income decreased £4,235 million as a result of sales during the period.
Total liabilities were £24,560 million, or 3 per cent higher at £857,933 million compared to £833,373 million at 31 December 2021. Customer deposits increased by £4,804 million, or 1 per cent, to £481,148 million compared to £476,344 million at 31 December 2021, as a result of continued inflows to retail current and savings accounts and commercial deposits. Repurchase agreements at amortised cost increased £15,395 million to £46,520 million, as the Group took advantage of favourable funding opportunities and debt securities in issue increased by £6,291 million reflecting issuances of commercial paper and certificates of deposit. Liabilities arising from insurance and investment contracts decreased by £6,232 million, or 4 per cent, reflecting the decreases in the value of the related policyholder assets as a result of market performance in the first quarter of 2022. Subordinated liabilities decreased by £2,140 million following redemptions during the period.
The Group completed the acquisition of Embark Group Limited (Embark), which together with its subsidiaries operates an investment and retirement platform business, on 31 January 2022 and Embark has been consolidated into the Group’s results from that date. The Group’s balance sheet at 31 March 2022 reflects provisional fair values for the assets and liabilities of Embark.
Page 3 of 12


FINANCIAL REVIEW (continued)
Ordinary shareholders’ equity decreased by £764 million to £46,247 million as retained profit for the period and positive actuarial remeasurements in respect of the Group’s post-retirement defined benefit schemes were more than offset by negative movements in the cash flow hedging reserve and the impact to date of the ordinary share buyback programme announced in February 2022. Other equity instruments were £421 million lower as a result of repurchases during the period.
The Group’s operations are predominantly UK-based with no direct credit exposure to Russia or Ukraine. The Group does have credit exposure to businesses that are impacted, either directly or indirectly, by higher energy costs or commodity prices, or potential disruption within their supply chains. Such activity is monitored through prudent risk management. The Group continues to monitor and analyse carefully key internal and external indicators for signs of contagion risk and any second or third order risks that may arise from the war in Ukraine above and beyond those captured in the macroeconomic outlook. Investigations so far have not revealed any significant risks, although the Group remains vigilant and proactive risk mitigation is undertaken as appropriate to ensure that it supports clients, including those in financial difficulty, whilst protecting its portfolios.
Capital
The Group’s common equity tier 1 (CET1) capital ratio has reduced from 17.3 per cent at 31 December 2021 to 14.2 per cent1 at 31 March 2022, largely reflecting the implementation of regulatory changes on 1 January 2022 which had the impact of an increase in risk-weighted assets as well as other related modelled impacts, in addition to the reinstatement of the full deduction treatment for intangible software assets and phased reductions in IFRS 9 transitional relief. Further reductions in the ratio during the quarter resulted from accelerated pension contributions to the Group’s three main defined benefit pension schemes and accruals for the full impact of the ordinary share buyback programme and foreseeable ordinary dividends. This was partially offset by banking profits for the period, the dividend received from the Group’s Insurance business and a reduction in risk-weighted assets, subsequent to the increase on 1 January 2022.
The total capital ratio reduced to 18.9 per cent1 (31 December 2021: 23.6 per cent) and the minimum requirement for own funds and eligible liabilities (MREL) reduced to 31.6 per cent1 (31 December 2021: 37.2 per cent) primarily reflecting the reduction in CET1 capital, increase in risk-weighted assets and completion of the transition to end-point eligibility rules for regulatory capital and MREL on 1 January 2022. The UK leverage ratio reduced to 5.2 per cent1 (31 December 2021: 5.8 per cent), predominantly reflecting the reduction in tier 1 capital.
Risk-weighted assets increased from £196.0 billion at 31 December 2021 to £210.2 billion at 31 March 2022, reflecting the implementation of the regulatory changes on 1 January 2022, including the implementation of new CRD IV models to meet revised regulatory standards for modelled outputs and a new standardised approach for measuring counterparty credit risk (SA-CCR) following the UK implementation of the remainder of Capital Requirements Regulation (CRR) 2. This was partially offset by a subsequent reduction in risk-weighted assets during the quarter which largely reflected optimisation activities, model recalibrations and lower market risk exposure, offset in part by the growth in balance sheet lending.

1Incorporating profits for the quarter that remain subject to formal verification in accordance with capital regulations.
Page 4 of 12


CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Three
months
ended
31 Mar
2022
Three
months
ended
31 Mar
2021
£m£m
Net interest income3,132 2,266 
Other income(2,899)4,608 
Total income233 6,874 
Insurance claims3,899 (3,003)
Total income, net of insurance claims4,132 3,871 
Operating expenses(2,332)(2,327)
Impairment (charge) credit(177)354 
Profit before tax1,623 1,898 
Tax expense(419)(501)
Profit for the period1,204 1,397 
Profit attributable to ordinary shareholders1,069 1,275 
Profit attributable to other equity holders109 107 
Profit attributable to equity holders1,178 1,382 
Profit attributable to non-controlling interests26 15 
Profit for the period1,204 1,397 
Basic earnings per share1.5p1.8p
Diluted earnings per share1.5p1.8p
Page 5 of 12


CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
At 31 Mar 2022
At 31 Dec 2021
£m£m
Assets
Cash and balances at central banks101,071 76,420 
Financial assets at fair value through profit or loss199,269 206,771 
Derivative financial instruments24,616 22,051 
Loans and advances to banks6,673 7,001 
Loans and advances to customers451,849 448,567 
Reverse repurchase agreements53,517 54,753 
Debt securities8,344 6,835 
Financial assets at amortised cost520,383 517,156 
Financial assets at fair value through other comprehensive income23,902 28,137 
Other assets40,634 35,990 
Total assets909,875 886,525 
Liabilities
Deposits from banks8,213 7,647 
Customer deposits481,148 476,344 
Repurchase agreements at amortised cost46,520 31,125 
Financial liabilities at fair value through profit or loss24,492 23,123 
Derivative financial instruments20,846 18,060 
Debt securities in issue77,843 71,552 
Liabilities arising from insurance and investment contracts162,231 168,463 
Other liabilities25,672 23,951 
Subordinated liabilities10,968 13,108 
Total liabilities857,933 833,373 
Ordinary shareholders’ equity46,247 47,011 
Other equity instruments5,485 5,906 
Non-controlling interests210 235 
Total equity51,942 53,152 
Total equity and liabilities909,875 886,525 
Page 6 of 12


ADDITIONAL FINANCIAL INFORMATION
1.Basis of presentation
This release covers the results of Lloyds Banking Group plc together with its subsidiaries (the Group) for the three months ended 31 March 2022.
Accounting policies
The accounting policies are consistent with those applied by the Group in its 2021 Annual Report on Form 20-F.
2.Capital
Capital and leverage ratios reported as at 31 March 2022 incorporate profits for the three months that remain subject to formal verification in accordance with capital regulations. The Group’s Q1 2022 Interim Pillar 3 Report will be available in early May and can be found at: https://www.lloydsbankinggroup.com/investors/financial-downloads.html.
Page 7 of 12


ADDITIONAL FINANCIAL INFORMATION (continued)
3.Group loans and advances to customers and expected credit loss allowance
Stage 1Stage 2Stage 3POCITotalStage 2
as % of
total
Stage 3
as % of
total
At 31 March 2022
£m£m£m£m£m
Loans and advances to customers
UK mortgages266,028 29,188 3,480 10,768 309,464 9.4 1.1 
Credit cards12,181 2,092 287  14,560 14.4 2.0 
Loans and overdrafts8,225 1,213 269  9,707 12.5 2.8 
UK Motor Finance12,305 1,866 192  14,363 13.0 1.3 
Other16,148 2,302 1,009  19,459 11.8 5.2 
Retail314,887 36,661 5,237 10,768 367,553 10.0 1.4 
SME26,775 3,167 822  30,764 10.3 2.7 
Corporate and other52,457 3,244 1,827  57,528 5.6 3.2 
Commercial Banking79,232 6,411 2,649  88,292 7.3 3.0 
Insurance and Wealth915 36 56  1,007 3.6 5.6 
Other1
(1,138)1 6  (1,131)
Total gross lending393,896 43,109 7,948 10,768 455,721 9.5 1.7 
ECL allowance on drawn balances(909)(1,103)(1,649)(211)(3,872)
Net balance sheet carrying value392,987 42,006 6,299 10,557 451,849 
Customer related ECL allowance (drawn and undrawn)
UK mortgages41 305 269 211 826 
Credit cards151 284 126  561 
Loans and overdrafts130 191 136  457 
UK Motor Finance2
106 72 110  288 
Other45 65 56  166 
Retail473 917 697 211 2,298 
SME61 121 86  268 
Corporate and other80 156 856  1,092 
Commercial Banking141 277 942  1,360 
Insurance and Wealth6 1 9  16 
Other400  4  404 
Total1,020 1,195 1,652 211 4,078 
Customer related ECL allowance (drawn and undrawn) as a percentage of loans and advances to customers3
UK mortgages 1.0 7.7 2.0 0.3 
Credit cards1.2 13.6 57.5  3.9 
Loans and overdrafts1.6 15.7 66.7  4.7 
UK Motor Finance0.9 3.9 57.3  2.0 
Other0.3 2.8 14.0  0.9 
Retail0.2 2.5 15.5 2.0 0.6 
SME0.2 3.8 12.8  0.9 
Corporate and other0.2 4.8 46.9  1.9 
Commercial Banking0.2 4.3 37.7  1.5 
Insurance and Wealth0.7 2.8 16.1  1.6 
Other  66.7  
Total0.3 2.8 23.4 2.0 0.9 
1Contains centralised fair value hedge accounting adjustments.
2UK Motor Finance for Stages 1 and 2 includes £94 million relating to provisions against residual values of vehicles subject to finance leasing agreements. These provisions are included within the calculation of coverage ratios.
3Total and Stage 3 ECL allowances as a percentage of drawn balances exclude loans in recoveries in credit cards of £68 million, loans and overdrafts of £65 million, Retail other of £610 million, SME of £149 million and in Corporate and other of £2 million. Other excludes the £400 million ECL central adjustment.
Page 8 of 12


ADDITIONAL FINANCIAL INFORMATION (continued)
3.Group loans and advances to customers and expected credit loss allowance (continued)
Stage 1Stage 2Stage 3POCITotalStage 2
as % of
total
Stage 3
as % of
total
At 31 December 2021
£m£m£m£m£m
Loans and advances to customers
UK mortgages273,629 21,798 1,940 10,977 308,344 7.1 0.6 
Credit cards12,148 2,077 292 — 14,517 14.3 2.0 
Loans and overdrafts8,181 1,105 271 — 9,557 11.6 2.8 
UK Motor Finance12,247 1,828 201 — 14,276 12.8 1.4 
Other16,414 1,959 778 — 19,151 10.2 4.1 
Retail322,619 28,767 3,482 10,977 365,845 7.9 1.0 
SME27,260 3,002 843 — 31,105 9.7 2.7 
Corporate and other49,115 3,128 2,049 — 54,292 5.8 3.8 
Commercial Banking76,375 6,130 2,892 — 85,397 7.2 3.4 
Insurance and Wealth898 34 62 — 994 3.4 6.2 
Other1
144 — — 151 — 4.6 
Total gross lending400,036 34,931 6,443 10,977 452,387 7.7 1.4 
ECL allowance on drawn balances(915)(1,114)(1,581)(210)(3,820)
Net balance sheet carrying value399,121 33,817 4,862 10,767 448,567 
Customer related ECL allowance (drawn and undrawn)
UK mortgages49 394 184 210 837 
Credit cards144 249 128 — 521 
Loans and overdrafts136 170 139 — 445 
UK Motor Finance2
108 74 116 — 298 
Other45 65 55 — 165 
Retail482 952 622 210 2,266 
SME61 104 90 — 255 
Corporate and other76 142 858 — 1,076 
Commercial Banking137 246 948 — 1,331 
Insurance and Wealth10 — 17 
Other400 — — 406 
Total1,024 1,200 1,586 210 4,020 
Customer related ECL allowance (drawn and undrawn) as a percentage of loans and advances to customers3
UK mortgages— 1.8 9.5 1.9 0.3 
Credit cards1.2 12.0 56.9 — 3.6 
Loans and overdrafts1.7 15.4 67.5 — 4.7 
UK Motor Finance0.9 4.0 57.7 — 2.1 
Other0.3 3.3 13.8 — 0.9 
Retail0.1 3.3 20.9 1.9 0.6 
SME0.2 3.5 12.7 — 0.8 
Corporate and other0.2 4.5 42.0 — 2.0 
Commercial Banking0.2 4.0 34.4 — 1.6 
Insurance and Wealth0.6 5.9 16.1 — 1.7 
Other— — 85.7 — 4.0 
Total0.3 3.4 27.4 1.9 0.9 
1Contains centralised fair value hedge accounting adjustments.
2UK Motor Finance for Stages 1 and 2 includes £95 million relating to provisions against residual values of vehicles subject to finance leasing agreements. These provisions are included within the calculation of coverage ratios.
3Total and Stage 3 ECL allowances as a percentage of drawn balances exclude loans in recoveries in credit cards of £67 million, loans and overdrafts of £65 million, Retail other of £379 million, SME of £135 million and in Corporate and other of £4 million. Other excludes the £400 million ECL central adjustment.
Page 9 of 12


ADDITIONAL FINANCIAL INFORMATION (continued)
4.UK economic assumptions
Scenarios by year
Key annual assumptions made by the Group are shown below. Gross domestic product and CPI inflation are 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. CPI numbers are translations of modelled RPIX estimates, except for the base case view.
202220232024202520262022-2026
average
At 31 March 2022
%%%%%%
Upside
Gross domestic product3.6 1.0 1.8 1.6 1.6 1.9 
UK Bank Rate1.39 1.80 2.00 2.02 2.05 1.85 
Unemployment rate3.3 3.4 3.6 3.8 3.8 3.6 
House price growth5.3 4.8 4.9 3.9 3.8 4.5 
Commercial real estate price growth9.1 3.1 0.5 (2.9)(0.8)1.7 
CPI inflation7.6 4.6 2.2 2.1 2.3 3.8 
Base case
Gross domestic product3.5 1.2 1.7 1.7 1.5 1.9 
UK Bank Rate1.06 1.31 1.50 1.50 1.50 1.38 
Unemployment rate4.1 4.3 4.4 4.5 4.5 4.3 
House price growth3.3 0.0 0.2 0.7 1.0 1.0 
Commercial real estate price growth0.5 (1.3)(0.3)(1.5)(0.3)(0.6)
CPI inflation7.5 4.3 1.6 1.2 1.3 3.2 
Downside
Gross domestic product3.3 0.7 1.6 1.7 1.5 1.7 
UK Bank Rate0.67 0.47 0.52 0.53 0.53 0.54 
Unemployment rate5.1 6.1 6.1 6.0 5.9 5.8 
House price growth0.0 (7.0)(6.7)(5.0)(2.2)(4.2)
Commercial real estate price growth(6.8)(6.1)(3.6)(3.4)(0.2)(4.0)
CPI inflation7.5 4.1 1.2 1.2 1.4 3.1 
Severe downside
Gross domestic product1.1 (0.2)1.6 1.7 1.5 1.1 
UK Bank Rate0.24 0.03 0.06 0.06 0.06 0.09 
Unemployment rate6.8 8.5 8.5 8.1 7.8 7.9 
House price growth(1.4)(12.1)(12.3)(9.4)(6.1)(8.4)
Commercial real estate price growth(17.9)(12.8)(6.5)(4.3)(0.8)(8.7)
CPI inflation7.5 3.9 0.6 0.4 0.7 2.6 
Probability-weighted
Gross domestic product3.2 0.8 1.7 1.6 1.5 1.8 
UK Bank Rate0.96 1.08 1.21 1.22 1.23 1.14 
Unemployment rate4.4 5.0 5.1 5.1 5.0 4.9 
House price growth2.4 (1.9)(1.7)(1.1)0.1 (0.4)
Commercial real estate price growth(1.0)(2.6)(1.7)(2.8)(0.5)(1.7)
CPI inflation7.5 4.3 1.6 1.4 1.6 3.3 

Page 10 of 12


ADDITIONAL FINANCIAL INFORMATION (continued)
4.UK economic assumptions (continued)
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, commercial real estate growth and CPI inflation are presented year-on-year. UK Bank Rate and unemployment rate are presented as at the end of each quarter.
First
quarter
2022
Second
quarter
2022
Third
quarter
2022
Fourth
quarter
2022
First
quarter
2023
Second
quarter
2023
Third
quarter
2023
Fourth
quarter
2023
At 31 March 2022
%%%%%%%%
Gross domestic product0.8 0.0 0.2 0.2 0.4 0.2 0.4 0.4 
UK Bank Rate0.75 1.00 1.25 1.25 1.25 1.25 1.25 1.50 
Unemployment rate3.9 4.0 4.1 4.2 4.2 4.2 4.3 4.3 
House price growth10.5 9.5 6.5 3.3 1.4 0.0 0.1 0.0 
Commercial real estate price growth13.9 11.5 6.7 0.5 (0.8)(2.0)(0.9)(1.3)
CPI inflation5.9 8.0 7.9 8.3 7.5 4.0 3.9 1.6 

Page 11 of 12


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.
LLOYDS BANKING GROUP plc
By:
/s/ William Chalmers
Name:William Chalmers
Title:Chief Financial Officer
Dated:
27 April 2022
Page 12 of 12


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