EQS-News: 2025 Half-Year Results

Lloyds Banking Group plc
2025 Half-Year Results
24 July 2025
 
 
 

CONTENTS

Results for the half-year	1
Income statement (underlying basis) and key balance sheet metrics	3
Quarterly information	4
Balance sheet analysis	5
Group results - statutory basis	6
Group Chief Executive's statement	7
Summary of Group results	9
Divisional results
Segmental analysis - underlying basis	18
Retail	20
Commercial Banking	22
Insurance, Pensions and Investments	24
Equity Investments and Central Items	28
Alternative performance measures	29
Risk management
Principal risks and uncertainties	35
Capital risk	36
Credit risk	41
Liquidity risk	52
Interest rate sensitivity	54
Statutory information
Condensed consolidated half-year financial statements (unaudited)	55
Condensed consolidated income statement (unaudited)	56
Condensed consolidated statement of comprehensive income (unaudited)	57
Condensed consolidated balance sheet (unaudited)	58
Condensed consolidated statement of changes in equity (unaudited)	59
Condensed consolidated cash flow statement (unaudited)	62
Notes to the condensed consolidated half-year financial statements (unaudited)	63
Statement of directors' responsibilities	95
Independent review report to Lloyds Banking Group plc	96
Key dates	97
Basis of presentation	97
Forward-looking statements	98
Contacts	99

Alternative performance measures
The Group uses a number of alternative performance measures, including underlying profit, in the description of its business performance and financial position. These measures are labelled with a superscript 'A' throughout this document, with the exception of content on pages 1 to 2 and pages 7 to 8 which is, unless otherwise stated, presented on an underlying basis. Further information on these measures is set out on page 29.
Forward-looking statements
This news release contains forward-looking statements. For further details, reference should be made to page 98.

 RESULTS FOR THE HALF-YEAR
"We have shown sustained strength in our financial performance in the first half of 2025, with income growth, cost discipline and robust asset quality, driving strong capital generation and increased shareholder distributions, with a 15% increase in the interim ordinary dividend.
We continue to make great progress in our purpose-driven strategy, building differentiated customer outcomes and delivering growth across our business as we build towards our ambitious targets for 2026.
Our strategic progress and sustained strength in our financial performance allows us to re-affirm our 2025 guidance and gives us confidence in our 2026 commitments. It also underpins our delivery of higher, more sustainable returns for our shareholders."
Charlie Nunn, Group Chief Executive
Successfully delivering our purpose-driven strategy
•  Driving growth across the business through deeper customer relationships, focusing on high value areas, cross-Group collaboration and building the core franchise
•  Enhancing operating leverage through improving capabilities and capitalising on scale
•  Leveraging investment in technology and data to reinforce competitive strength, with increased digital capabilities and engagement driving broader revenue opportunities and improved productivity
•  Delivered more than £1 billion annualised additional revenues from strategic initiatives and confident in delivering more than £1.5 billion by 2026
Sustained strength in financial performance¹
•  Statutory profit after tax of £2.5 billion (half-year to 30 June 2024: £2.4 billion) with net income up 6% year on year, partly offset by higher operating costs and impairment charge. Robust return on tangible equity of 14.1%
•  Underlying net interest income of £6.7 billion, up 5% compared to the first half of 2024. This reflects a banking net interest margin of 3.04%, up 10 basis points year-on-year (up 1 basis point quarter-on-quarter), alongside higher average interest-earning banking assets of £458 billion
•  Underlying other income of £3.0 billion, 9% higher than the prior year (and 4% higher in the second quarter versus the first quarter of 2025), driven by strengthening customer activity and the benefit of strategic initiatives
•  Operating lease depreciation of £710 million, up 5% due to fleet growth, depreciation of higher value vehicles and declines in used electric car prices. Stable in the second quarter reflecting mitigating management actions
•  Operating costs of £4.9 billion, up 4% versus the prior year, reflecting inflationary pressures, strategic investment and business growth costs, partly offset by cost savings and continued cost discipline
•  Robust asset quality with underlying impairment charge of £442 million and asset quality ratio of 19 basis points
Strong growth in lending and deposits
•  Underlying loans and advances to customers increased by £11.9 billion (3%) in the first six months to £471.0 billion, with growth across Retail of £10.1 billion, alongside an increase in Commercial Banking of £1.2 billion
•  Customer deposits increased in the first half of 2025, by £11.2 billion (2%) to £493.9 billion, with £3.7 billion growth in Retail and £7.6 billion in Commercial Banking
Strong capital generation
•  Risk-weighted assets of £231.4 billion, up £6.8 billion in the first half of 2025, reflecting lending growth and a c.£1.2 billion increase primarily due to hedging activity expected to reverse in the third quarter
•  Strong pro forma capital generation of 86 basis points; CET1 ratio of 13.8% after 50 basis points for ordinary dividend accrual
•  Tangible net assets per share of 54.5 pence, up by 2.1 pence in the first half of 2025, from attributable profit and the unwind of the cash flow hedging reserve, partially offset by capital distributions in respect of 2024
•  Interim ordinary dividend of 1.22 pence per share (equivalent to £731 million), up 15% on the prior year
 RESULTS FOR THE HALF-YEAR (continued)
2025 guidance re-affirmed
Based on our current macroeconomic assumptions, for 2025 the Group continues to expect:
•  Underlying net interest income of c.£13.5 billion
•  Operating costs of c.£9.7 billion
•  Asset quality ratio of c.25 basis points
•  Return on tangible equity of c.13.5%
•  Capital generation to be c.175 basis points²
Confident in 2026 guidance
Based on our current macroeconomic assumptions and confidence in our strategy, the Group is maintaining its guidance for 2026:
•  Cost:income ratio of less than 50%
•  Return on tangible equity of greater than 15%
•  Capital generation of greater than 200 basis points²
•  To pay down to a CET1 ratio of c.13.0%
¹    See the basis of presentation on page 97.
²    Excludes capital distributions. Includes ordinary dividends received from the Insurance business in February of the following year.

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