LLOYDS BANKING GROUP PLC ADDITIONAL FINANCIAL INFORMATION (continued)
At 31 December 2020 2020 2021 2022 2023 2024 2020-2024
% % % % % %
Upside
Gross domestic product (10.5) 3.7 5.7 1.7 1.5 0.3
UK Bank Rate 0.10 1.14 1.27 1.20 1.21 0.98
Unemployment rate 4.3 5.4 5.4 5.0 4.5 5.0
House price growth 6.3 (1.4) 5.2 6.0 5.0 4.2
Commercial real estate price growth (4.6) 9.3 3.9 2.1 0.3 2.1
Base case
Gross domestic product (10.5) 3.0 6.0 1.7 1.4 0.1
UK Bank Rate 0.10 0.10 0.10 0.21 0.25 0.15
Unemployment rate 4.5 6.8 6.8 6.1 5.5 5.9
House price growth 5.9 (3.8) 0.5 1.5 1.5 1.1
Commercial real estate price growth (7.0) (1.7) 1.6 1.1 0.6 (1.1)
Downside
Gross domestic product (10.6) 1.7 5.1 1.4 1.4 (0.4)
UK Bank Rate 0.10 0.06 0.02 0.02 0.03 0.05
Unemployment rate 4.6 7.9 8.4 7.8 7.0 7.1
House price growth 5.6 (8.4) (6.5) (4.7) (3.0) (3.5)
Commercial real estate price growth (8.7) (10.6) (3.2) (0.8) (0.8) (4.9)
Severe downside
Gross domestic product (10.8) 0.3 4.8 1.3 1.2 (0.8)
UK Bank Rate 0.10 0.00 0.00 0.01 0.01 0.02
Unemployment rate 4.8 9.9 10.7 9.8 8.7 8.8
House price growth 5.3 (11.1) (12.5) (10.7) (7.6) (7.5)
Commercial real estate price growth (11.0) (21.4) (9.8) (3.9) (0.8) (9.7) ADDITIONAL FINANCIAL INFORMATION (continued)
ECL sensitivity to economic assumptions
The measurement of ECL reflects an unbiased probability-weighted range of possible future economic outcomes. The Group achieves this by generating four economic scenarios to reflect the range of outcomes; the central scenario reflects the Group's base case assumptions used for medium-term planning purposes, an upside and a downside scenario are also selected together with a severe downside scenario. The base case, upside and downside scenarios carry a 30 per cent weighting; the severe downside is weighted at 10 per cent.
The table below shows the Group's ECL for the upside, base case, downside and severe downside scenarios. The stage allocation for an asset is based on the overall scenario probability-weighted PD and, hence, the Stage 2 allocation is constant across all the scenarios. ECL applied through individual assessments and post-model adjustments is reported flat against each economic scenario, reflecting the basis on which they are evaluated.
Probability- Severe
Upside Base case Downside
weighted downside
Underlying basis GBPm GBPm GBPm GBPm GBPm
UK Mortgages 1,518 1,088 1,285 1,736 2,854
Other Retail 2,325 2,145 2,266 2,442 2,697
Commercial Banking 1,932 1,572 1,777 2,124 2,898
Other 451 451 451 451 451
At 31 March 2021 6,226 5,256 5,779 6,753 8,900
UK Mortgages 1,605 1,192 1,382 1,815 2,884
Other Retail 2,403 2,216 2,345 2,522 2,780
Commercial Banking 2,402 1,910 2,177 2,681 3,718
Other 450 448 450 450 456
At 31 December 2020 6,860 5,766 6,354 7,468 9,838 Application of judgement in adjustments to modelled ECL allowances
Judgements are not typically assessed under each distinct economic scenario used to generate ECL, but instead are applied on the basis of final modelled ECL which reflects the probability weighted view of all scenarios. All adjustments are assessed quarterly and are subject to internal review and challenge, including by the Audit Committee, to ensure that amounts are appropriately calculated and that there are specific release criteria within a reasonable timeframe.
The coronavirus pandemic and the various support measures that have been put in place have resulted in an economic environment which differs significantly from the historical economic conditions upon which the impairment models have been built. As a result, there is a need for management judgement to be applied, as seen in the elevated levels present since year end.
Given continued macroeconomic uncertainties, the Group has retained the judgemental overlays applied at year end for coronavirus and other unrelated model limitations. Management judgements in respect of coronavirus of c.GBP1 billion (31 December 2020: c.GBP0.9 billion) include the central GBP400 million overlay (31 December 2020: GBP400 million) in respect of risks around base case conditioning assumptions which are not sufficiently captured by the Group's approach to multiple economic scenarios, as well as c.GBP600 million of judgements within the underlying portfolios (31 December 2020: c.GBP500 million).
ADDITIONAL FINANCIAL INFORMATION (continued)
Commercial Banking lending in key coronavirus-impacted sectors1
At 31 March 2021 At 31 December 2020
Drawn and Drawn as a % of Drawn and Drawn as a % of
Drawn Undrawn undrawn Group loans and Drawn Undrawn undrawn Group loans and
advances advances
GBPbn GBPbn GBPbn % GBPbn GBPbn GBPbn %
Retail 2.1 1.6 3.7 0.4 2.1 1.7 3.8 0.4
non-food
Automotive 2.0 1.7 3.7 0.4 1.8 2.0 3.8 0.4
dealerships2
Oil and gas 1.1 2.5 3.6 0.2 1.1 2.7 3.8 0.2
Construction 0.7 1.5 2.2 0.1 0.8 1.7 2.5 0.2
Passenger 1.4 0.8 2.2 0.3 1.1 1.1 2.2 0.2
transport
Hotels 1.6 0.3 1.9 0.4 1.8 0.3 2.1 0.4
Leisure 0.5 0.7 1.2 0.1 0.6 0.7 1.3 0.1
Restaurants 0.6 0.4 1.0 0.1 0.6 0.5 1.1 0.1
and bars
Total 10.0 9.5 19.5 2.0 9.9 10.7 20.6 2.0 1. Lending classified using ONS Standard Industrial Classification codes at legal entity level; drawn balances exclude c.GBP1 billion lending under the Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan Scheme. 2. Automotive dealerships includes Black Horse Motor Wholesale lending (within Retail).
Support measures
Retail payment holiday characteristics1
Mortgages Cards Loans Motor Total
000s GBPbn 000s GBPbn 000s GBPbn 000s GBPbn 000s GBPbn
Total payment holidays granted 491 61.6 341 1.7 304 2.4 161 2.2 1,297 68.0
First payment holiday still in force 6 0.9 10 0.0 7 0.1 5 0.1 29 1.1
Matured payment holidays - repaying 443 55.4 282 1.4 259 2.1 139 1.8 1,123 60.7
Matured payment holidays - extended 15 2.0 9 0.0 14 0.1 6 0.1 43 2.3
Matured payment holidays - missed payment 27 3.3 41 0.2 24 0.2 11 0.2 103 3.9
As a percentage of total matured
Matured payment holidays - repaying 91% 91% 85% 85% 87% 87% 89% 86% 89% 91%
Matured payment holidays - extended 3% 3% 3% 3% 5% 5% 4% 5% 3% 3%
Matured payment holidays - missed payment 6% 5% 12% 12% 8% 8% 7% 9% 8% 6% 1. Data as at 31 March 2021. Analysis of mortgage payment holidays excludes St James Place, Intelligent Finance and Tesco; motor finance payment holidays excludes Lex Autolease. Total payment holidays granted are equal to the sum
of first payment holiday still in force and matured payment holidays. Charged-off balances are included within
missed payments. Totals and percentages calculated using unrounded numbers.
Government-backed loan scheme approvals and value1
000s GBPbn
Coronavirus Business Interruption Loan Scheme 10.5 2.5
Bounce Back Loan Scheme 343.3 9.7
Coronavirus Large Business Interruption Loan Scheme 0.1 0.7
Total 353.9 12.9 1. Data as at 2 April 2021. 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 2021.
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