2025 Q3 Interim Management Statement

Lloyds Banking Group plc

Q3 2025 Results

23 October 2025

RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2025
 

“The Group continues to perform well, demonstrating robust financial performance alongside strategic progress, including our recent acquisition of Schroders Personal Wealth.

Strong capital generation was supported by income growth, cost discipline and strong asset quality in the first nine months of 2025, despite the impact of the additional motor finance charge in the third quarter. Our strategic progress combined with this financial performance gives us confidence in our performance for the year and our 2026 guidance.”

Charlie Nunn, Group Chief Executive

Robust financial performance¹

• Statutory profit after tax of £3.3 billion (nine months to 30 September 2024: £3.8 billion) with net income up 6% and an £800 million charge for motor finance commission arrangements in the third quarter. Return on tangible equity of 11.9%, or 14.6% excluding the third quarter charge for motor finance

• Underlying net interest income of £10.1 billion, up 6% compared to the first nine months of 2024. This reflected a banking net interest margin of 3.04%, up 10 basis points year-on-year (up 2 basis points quarter-on-quarter to 3.06%), alongside higher average interest-earning banking assets of £460.4 billion

• Underlying other income of £4.5 billion, 9% higher than the prior year (and 3% higher quarter-on-quarter), driven by strengthening customer activity and the benefit of our strategic initiatives

• Operating lease depreciation of £1,075 million, up 8% in line with fleet growth

• Operating costs of £7.2 billion, up 3% versus the prior year, reflecting inflationary pressures, strategic investment and business growth costs, partially offset by cost savings and continued cost discipline

• Remediation costs of £912 million, including £875 million in the third quarter, of which £800 million was in relation to the potential impact of motor finance commission arrangements. The total motor finance provision of £1.95 billion represents the Group's best estimate of the potential impact of this issue

• Strong asset quality with an underlying impairment charge of £618 million; asset quality ratio of 18 basis points

• Underlying loans and advances to customers increased by £18.0 billion (4%) in the first nine months to £477.1 billion, with growth across Retail of £15.2 billion and Commercial Banking of £2.5 billion. Balances increased by £6.1 billion in the third quarter, with growth in Retail and Corporate and Institutional Banking

• Customer deposits increased in the first nine months of 2025 by £14.0 billion (3%) to £496.7 billion, with £4.0 billion growth in Retail and £10.0 billion in Commercial Banking. Customer deposits grew by £2.8 billion in the third quarter, largely within Commercial Banking

• Risk-weighted assets of £232.3 billion, up £7.7 billion in the first nine months of 2025, reflecting lending growth offset by ongoing optimisation activity

• Strong capital generation of 110 basis points, or 141 basis points excluding the third quarter charge for motor finance. CET1 ratio of 13.8% after 74 basis points for the interim ordinary dividend paid and the foreseeable ordinary dividend accrual

• Tangible net assets per share of 55.0 pence, up by 2.6 pence in the first nine months of 2025, from attributable profit, the unwind of the cash flow hedging reserve and a reduction in the number of shares in issue due to the ongoing share buyback, partially offset by capital distributions

• On 9 October, the Group announced the full acquisition of Schroders Personal Wealth, previously operated as a joint venture with Schroders Group. The acquired business supports c.£17 billion in assets under administration and accelerates delivery of the Group’s wealth strategy to deepen relationships in a high value segment

2025 guidance revised

Based on our current macroeconomic assumptions, for 2025 the Group expects:

• Underlying net interest income now expected to be c.£13.6 billion

• Operating costs of c.£9.7 billion, excluding the acquisition of Schroders Personal Wealth²

• Asset quality ratio now expected to be c.20 basis points

• Return on tangible equity now expected to be c.12% (c.14% excluding the third quarter motor finance charge)

• Capital generation now expected to be c.145 basis points³ (c.175 basis points³ excluding the third quarter motor finance charge)

¹ See the basis of presentation on page 17.

² Modestly greater than £9.7 billion, including the acquisition of Schroders Personal Wealth in the fourth quarter of 2025.

³ Excludes capital distributions.

INCOME STATEMENT (UNDERLYING BASIS)^A AND KEY BALANCE SHEET METRICS

^A See page 16.

¹ 30 June 2025 reflects the interim ordinary dividend received from the Insurance business in July 2025. 31 December 2024 reflects both the full impact of the share buyback announced in respect of 2024 and the ordinary dividend received from the Insurance business in February 2025.

² Excludes balances relating to margins of £0.9 billion (31 December 2024: £2.8 billion, 30 June 2025: £1.1 billion).

³ The liquidity coverage ratio is calculated as a simple average of month-end observations over the previous 12 months.

⁴ The net stable funding ratio is calculated as a simple average of month-end observations over the previous four quarter-ends.

QUARTERLY INFORMATION^A