LLOYDS BANKING GROUP PLC 
DGAP-News: Lloyds Banking Group PLC / Key word(s): Quarterly / Interim Statement
Lloyds Banking Group PLC: Q1 2021 Interim Management Statement
2021-04-28 / 09:00
The issuer is solely responsible for the content of this announcement.
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Lloyds Banking Group plc
Q1 2021 Interim Management Statement
28 April 2021
RESULTS FOR THE THREE MONTHS ENDED 31 MARCH 2021
"The coronavirus pandemic continues to have a significant impact on people, businesses and communities in the UK and
around the world. Whilst we are seeing positive signs, notably the progress of the vaccine roll-out and the emergence
from lockdown restrictions, the outlook remains uncertain. The Group remains absolutely focused on supporting its
customers and Helping Britain Recover from the financial effects of the pandemic.
The long-run transformation of the Group has positioned the business well to address the challenges of the pandemic.
We have made a strong start to the year with the quarterly results and on delivering Strategic Review 2021.
It is with both pride and sadness that I will step down as Group Chief Executive later this month. Most importantly,
the Group is well placed for sustainable success and the publication of Strategic Review 2021 in February shows that
the Group has clear execution outcomes for 2021, underpinned by long-term strategic vision. The Group also has
exceptional people. I am very proud of all of our colleagues across the Group, who have again shown their continued
dedication and relentless focus on supporting their customers through these challenging times."
António Horta-Osório, Group Chief Executive
"As this is António's last set of results, I would like to take this opportunity to thank him, on behalf of the Board,
for his outstanding contribution. Over the last decade he has led the transformation of the business; delivering its
purpose of Helping Britain Prosper whilst creating a truly customer focussed business underpinned by strong financial
foundations."
Robin Budenberg, Chair
HIGHLIGHTS FOR THE THREE MONTHS ENDED 31 MARCH 2021
Solid financial performance reflects business momentum and improved economic outlook
. Statutory profit after tax of GBP1,397 million supported by business momentum and a release of
expected credit loss provisions, given the improved economic outlook. Statutory return on tangible
equity of 13.9 per cent with tangible net assets per share of 52.4 pence
. Recovering trading surplus of GBP1,748 million, a reduction of 12 per cent compared to the first
three months of 2020, but an increase of 21 per cent on the final quarter of 2020
? Net income of GBP3.7 billion, down 7 per cent year on year (up 2 per cent on the previous
quarter), with higher average interest-earning assets of GBP439 billion, net interest margin of
2.49 per cent and other income of GBP1.1 billion
? Total costs of GBP1.9 billion down 2 per cent, driven by continued operating cost control and
lower remediation costs
. Asset quality remains strong with credit experience benign. Net impairment credit of GBP323 million
in the quarter, driven by a GBP459 million release given the UK's improved economic outlook.
Management judgements in respect of coronavirus retained, now c.GBP1 billion including the GBP400
million central overlay taken in the fourth quarter
Balance sheet and capital strength further enhanced
. Capital build of 54 basis points in the quarter with CET1 ratio of 16.7 per cent, significantly
ahead of the ongoing target of c.12.5 per cent, plus a management buffer of c.1 per cent and
regulatory requirements of c.11 per cent
. Loans and advances up GBP3.3 billion in the quarter to GBP443.5 billion, including GBP6.0 billion open
mortgage book growth
. Customer deposits up GBP11.7 billion in the quarter to GBP462.4 billion with Retail current accounts up
GBP5.6 billion
. Loan to deposit ratio of 96 per cent provides a strong liquidity position and significant potential
to lend into recovery
Outlook
. Given the solid financial performance in the first quarter of 2021, the Group is enhancing its
guidance for 2021. Based on the Group's current economic assumptions:
? Net interest margin now expected to be in excess of 245 basis points
? Operating costs to reduce to c.GBP7.5 billion
? Net asset quality ratio now expected to be below 25 basis points
? Risk-weighted assets in 2021 to be broadly stable on 2020
? Statutory return on tangible equity now expected to be between 8 and 10 per cent, excluding
c.2.5 percentage point benefit from tax rate changes
. Accruing dividends with intention to resume progressive and sustainable ordinary dividend policy
INCOME STATEMENT - UNDERLYING BASIS
Quarter Quarter Quarter
ended ended Change ended Change
31 Mar 31 Mar 31 Dec 2020
2021 2020
GBPm GBPm % GBPm %
Net interest income 2,677 2,950 (9) 2,677 -
Other income 1,135 1,226 (7) 1,066 6
Operating lease depreciation (148) (224) 34 (150) 1
Net income 3,664 3,952 (7) 3,593 2
Operating costs (1,851) (1,877) 1 (2,028) 9
Remediation (65) (87) 25 (125) 48
Total costs (1,916) (1,964) 2 (2,153) 11
Trading surplus 1,748 1,988 (12) 1,440 21
Impairment 323 (1,430) (128)
Underlying profit 2,071 558 1,312 58
Restructuring (173) (63) (233) 26
Volatility and other items - (421) (202)
Payment protection insurance provision - - (85)
Statutory profit before tax 1,898 74 792
Tax (expense) credit (501) 406 (112)
Statutory profit after tax 1,397 480 680
Earnings per share 1.8p 0.5p 0.7p
Banking net interest margin 2.49% 2.79% (30)bp 2.46% 3bp
Average interest-earning banking assets GBP439bn GBP432bn 2 GBP437bn 1
Cost:income ratio 52.3% 49.7% 2.6pp 59.9% (7.6)pp
Asset quality ratio (0.29)% 1.30% (159)bp 0.11% (40)bp
Return on tangible equity 13.9% 3.7% 10.2pp 5.9% 8.0pp KEY BALANCE SHEET METRICS
At 31 Mar Change Change
2021 At 31 Mar 2020 At 31 Dec 2020
% %
Loans and advances to customers1 GBP444bn GBP443bn - GBP440bn 1
Customer deposits2 GBP462bn GBP428bn 8 GBP451bn 3
Loan to deposit ratio 96% 103% (7)pp 98% (2)pp
CET1 ratio3 16.7% 14.2% 2.5pp 16.2% 0.5pp
CET1 ratio pre IFRS 9 transitional relief3,4 15.8% 13.9% 1.9pp 15.0% 0.8pp
Transitional MREL ratio3 36.1% 34.5% 1.6pp 36.4% (0.3)pp
UK leverage ratio3 6.0% 5.3% 0.7pp 5.8% 0.2pp
Risk-weighted assets GBP199bn GBP209bn (5) GBP203bn (2)
Wholesale funding GBP106bn GBP126bn (16) GBP109bn (4)
Liquidity coverage ratio (12 month average) 134% 138% (4)pp 136% (2)pp
Tangible net assets per share 52.4p 57.4p (5.0)p 52.3p 0.1p 1. Excludes reverse repos of GBP52.8 billion (31 March 2020: GBP55.2 billion; 31 December 2020: GBP58.6 billion). 2. Excludes repos of GBP8.5 billion (31 March 2020: GBP9.4 billion; 31 December 2020: GBP9.4 billion). 3. Incorporating profits for the period that remain subject to formal verification in accordance with the Capital Requirements Regulation. 4. CET1 ratio pre IFRS 9 transitional relief reflects the full impact of IFRS 9, prior to the application of
transitional arrangements for capital that provide relief for the impact of IFRS 9.
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