DGAP-News: Lloyds Banking Group PLC
/ Key word(s): Half Year Results
Lloyds Banking Group PLC: 2021 Half-Year Results
29.07.2021 / 11:20
The issuer is solely responsible for the content of this announcement.
Lloyds Banking Group plc
2021 Half-Year Results
29 July 2021
RESULTS FOR THE HALF-YEAR
"During the first six months of 2021, the Group has delivered a solid financial performance with continued business momentum, bolstered by an improved macroeconomic outlook for the UK. While we are seeing clear progress in the vaccine roll out and emergence from lockdown restrictions, the coronavirus pandemic continues to have a significant impact on the people, businesses and communities of the UK. In this context, the Group remains committed to Helping Britain Recover from the pandemic and delivering for all stakeholders."
William Chalmers Interim Group Chief Executive
Solid financial performance with continued business momentum, bolstered by improved macroeconomic outlook
Good progress on Strategic Review 2021 priorities, including record customer satisfaction scores, improved capabilities in Markets products and a leading payments card spend market share
Announced today the acquisition of Embark, a fast growing investment and retirement platform business. Embark enhances our capabilities to address the attractive mass market and self-directed Wealth segment, completing the Group's Wealth proposition. Embark will also enable the Group to re-platform its pensions and retirement proposition, significantly strengthening its offering in Retirement, an important growth market
Statutory profit before tax of £3.9 billion, increased significantly on first half of 2020, benefiting from solid business momentum and a net impairment credit in the period
Net income of £7.6 billion, up 2 per cent, with increased average interest-earning assets at £441 billion, a strong banking net interest margin of 2.50 per cent and other income of £2.4 billion, alongside a reduction in operating lease depreciation
Sustained cost discipline with operating costs of £3.7 billion, including the impact of rebuilding variable pay in the context of stronger than expected financial performance
Remediation charge of £425 million, materially driven by the £91 million regulatory fine relating to the communication of historical insurance renewals, £150 million of redress and operational costs for HBOS Reading, and charges in relation to other ongoing legacy programmes
Net impairment credit of £656 million, including £333 million in the second quarter, as a result of an £837 million release driven by improvements to the macroeconomic outlook for the UK, combined with robust credit performance. Management judgements in respect of coronavirus retained, now c.£1.2 billion
Balance sheet and capital strength further enhanced
Loans and advances at £447.7 billion, up £7.5 billion in the period, driven by strong growth of £12.6 billion in the open mortgage book
Customer deposits of £474.4 billion up £23.7 billion in the period, with continued inflows into the Group's trusted brands, including Retail current accounts which were up £9.9 billion in the period. Resulting loan to deposit ratio of 94 per cent, continues to provide a strong liquidity position and significant potential to lend into recovery
Strong capital build of 93 basis points in the first half prior to the interim ordinary dividend. Reintroduced a progressive and sustainable ordinary dividend policy, with an interim ordinary dividend of 0.67 pence per share
CET1 ratio of 16.7 per cent after dividend accrual, significantly ahead of both the ongoing target of c.12.5 per cent, plus a management buffer of c.1 per cent and regulatory requirement of c.11 per cent
Outlook
- Given our solid financial performance and the improved UK macroeconomic outlook, the Group is enhancing its guidance for 2021. Based on the Group's current macroeconomic assumptions:
Net interest margin now expected to be around 250 basis points
Operating costs now expected to be c.£7.6 billion
Net asset quality ratio now expected to be below 10 basis points
Return on tangible equity now expected to be c.10 per cent, excluding the c.2.5 percentage point benefit from tax rate changes
Risk-weighted assets in 2021 now expected to be below £200 billion
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29.07.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.
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Language:
English
Company:
Lloyds Banking Group PLC
Gresham Street
EC2V 7HN London
United Kingdom
Phone:
020 7626 1500
Internet:
www.lloydsbankinggroup.com
ISIN:
GB0008706128
WKN:
871784
Listed:
Regulated Unofficial Market in Berlin, Dusseldorf, Frankfurt, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange; London, BX, SIX
Lloyds Banking Group plc is one of the leading British banking groups. Net income breaks down by activity as follows:
- retail banking (60.6%): sales of standard banking products and services to individuals. The group is also involved in real estate lending with Cheltenham & Gloucester;
- commercial banking (30.6%);
- insurance and wealth management (6%): life insurance (Scottish Widows) and non-life insurance (Britain's No. 1 homeowner's insurance distributor);
- other (2.8%).
At the end of 2023, the group managed GBP 471.4 billion in current deposits and GBP 449.7 billion in current loans.
LLOYDS BANKING GROUP PLC 
