31st July 2020

Lloyds Bank reports half year financials
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Lloyds Banking GRoup has reported first half results-highlights are:

Financial performance reflects revised economic outlook
-Net income of £7.4bn, down 16%. Lower net interest margin of 2.59% reflecting lower rates, actions taken to support customers and changes in asset mix; average interest earning assets were broadly stable. Other income of £2.5bn, impacted by slowdown across key markets in the first half
-Total costs of £3.9bn, 4% lower, with business as usual costs down 6%, enabling continued investment in digital projects and enhanced support for customers during the pandemic
-Trading surplus of £3.5bn, a reduction of 26% compared to the first six months of 2019, providing still significant
capacity to absorb impairment impacts of the coronavirus crisis
-Impairment charge of £3.8bn, including £2.4bn in the second quarter primarily reflecting a significant deterioration
in forward looking economic outlook. Loan books, based on actual defaults to date, continue to perform well, with the
additional provisions building balance sheet resilience
-Statutory loss before tax of £602m and statutory profit after tax of £19m, both impacted by income developments and the increased impairment charge. Tangible net asset value per share of 51.6 pence.

António Horta-Osório, Group Chief Executive, comments “The impact of the coronavirus pandemic in the first half of 2020 has been profound on the way we live our lives and on the global economy. We remain fully focused on helping our customers and the UK economy recover, in collaboration with
Government and our regulators.
I want to express my sincere gratitude to all my colleagues across the Group for their dedication and persistence which have allowed us to deliver vital banking services to our customers effectively throughout the pandemic.
Although the outlook is uncertain, the Group’s financial strength and business model allow us to help Britain recover and play our part in returning our country to prosperity. Our customer focused strategic plan remains fully aligned with the Group’s long term strategic objectives, the position of our franchise and the interests of shareholders.”

The bank outlined supporting customers, colleagues and the economy in difficult times:

-Actively supporting retail, small business and commercial customers through a range of flexible propositions
-Over £9bn lending provided to businesses through government-backed schemes, including Bounce Back Loan,
Coronavirus Business Interruption Loan and Coronavirus Large Business Interruption Loan schemes
-Over 1.1m payment holidays granted to retail customers and c.33,000 capital repayment holidays provided to
small businesses and corporates to alleviate temporary financial pressures
-Payment holidays granted on insurance premiums and advance payments for life and critical illness claims to support
customers in financial difficulty during the pandemic
-Job and pay security provided to all colleagues since March. c.50,000 colleagues now working from home
-Multi-channel distribution model, with the UK’s leading digital bank, combined with around 90% of branches
remaining open throughout the lockdown, enabling the Group to continue to serve customers
Continued strategic progress
-Continued progress against strategy with particular focus on building a leading customer experience, further digitising the Group, transforming the way the bank works and maximising Group capabilities. Over £2.4bn billion invested in strategic initiatives during GSR3 to help deliver sustainable shareholder value creation
-The benefits of investments from GSR3 have positioned the bank well in the current environment:
-Operating the UK’s leading digital bank, Lloyds now have more than 17 million digitally active users, up 4% during
lockdown, while recording digital customer satisfaction levels at an all-time high, even in a period of increased demand
-It's commitment to delivering cost efficiencies and creating capacity to invest in the business has enabled it to respond quickly to new challenges, such as using robotics to process c.98% of Bounce Back Loan applications
-It's unique Single Customer View, which added another 1 million customers in the first half of the year, enables it
to serve a wider range of customers’ financial needs than ever before
-The opportunity exists to accelerate the bank's transformation, and further enhance and adapt strategy, customer propositions and colleague work practices as the Group learns from the crisis.