COMMERCIAL BANKING UPDATE 1 LLOYDS BANKING GROUP LLOYDS BANKING GROUP LLOYDS BANKING GROUP LLOYDS BANKING GROUP COMMERCIAL BANKING UPDATE COMMERCIAL BANKING UPDATE COMMERCIAL BANKING UPDATE COMMERCIAL BANKING UPDATE WELCOME & INTRODUCTION WELCOME & INTRODUCTION António Horta-Osório Group Chief Executive WELCOME & INTRODUCTION WELCOME & INTRODUCTION António Horta-Osório Group Chief Executive 1
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LLOYDS BANKING GROUP COMMERCIAL BANKING UPDATE · 4/16/2013 · Director Director Director 1. Independent Group functions. COMMERCIAL BANKING UPDATE 6 ... SME Mid-Markets Global
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COMMERCIAL BANKING UPDATE 1
LLOYDS BANKING GROUP LLOYDS BANKING GROUP LLOYDS BANKING GROUP LLOYDS BANKING GROUP COMMERCIAL BANKING UPDATECOMMERCIAL BANKING UPDATECOMMERCIAL BANKING UPDATECOMMERCIAL BANKING UPDATE
0
WELCOME & INTRODUCTIONWELCOME & INTRODUCTION
António Horta-Osório
Group Chief Executive
WELCOME & INTRODUCTIONWELCOME & INTRODUCTION
António Horta-Osório
Group Chief Executive
1
COMMERCIAL BANKING UPDATE 2
COMMERCIAL BANKINGA core part of Lloyds Banking Group
Strong core franchise across UK
A single division serving all the Group’s business clients
UK-centric approach, focused on meeting our clients’ needsKey to our support for the UK economic recovery
Leveraging Commercial Banking as an integral part of the Group
Strategy and action plan fully aligned and integrated with GroupDelivering cost and product synergies with other parts of the GroupSupporting the Group’s funding and commercial needs
2
A clear plan to improve Commercial Banking’s returns
Growing diversified, sustainable earnings streamsDelivering increased operational and cost efficiencies through SimplificationOptimising the balance sheet through clear participation choices and strong risk controls
1. Excludes own account / non-client2. Focus on equity support into UK Mid-Markets companies
COMMERCIAL BANKINGAll coverage areas will improve current returns
Higher-value switchers
Strategy Actions
Growth“Local Execution”
Growth“Local Execution”
Disciplined Participation
SME
Mid-Markets
Global Corporates
Higher-value switchersGreater relationship manager capacity enabled by investmentIncrease digital take-up
Targeted geographic expansionMore relationship managers Leverage SME success in Mid-Markets
Improve share of walletFocus on UK-linked clientsOptimisation of low return relationships
13
Disciplined Participation
Financial Institutions
Optimisation of low return relationships
Improve share of walletRefocused coverageSupport Group, Commercial Banking franchise and UK financial services industry
Relentless execution focus across four client segments
COMMERCIAL BANKING UPDATE 8
COMMERCIAL BANKINGSME: Grow by winning locally
SME
Client numbers vs. Income1
78%~80%
Mid-Markets
Global C t
22%
£1-£25m Turnover"SME"
~20%
<£1m Turnover"Business Banking"
Income
Number of Clients
Market Share by client turnover2
Strong franchise
Winning switchers
Winning in key GDP regions
Growing lending & deposits
Leveraging Transaction Banking
14
£10m-£25m£0m-£1m
19%21%
£1m-£2m
17%
£2m-£10m
21%Corporates
Financial Institutions
1. FY 20122. Charterhouse UK Business Banking Survey Q4 2012 (including Verde clients)
Banking
Reducing cost to serve
COMMERCIAL BANKINGMid-Markets: Grow by winning locally
SME
Mid-Markets Assets by segment1
Medium-Sized
Mid-Markets
Global C t
Medium-Sized Business and Mid-Cap Market Share3
29%
13% 26%
7%
24%
Education, Communities and GovernmentReal EstateSocial Housing
Mid-Cap2
Business2
Leveraging SME experience
Increasing RM population
Enhancing RM effectiveness
Building capabilities
Leveraging Transaction B ki
151. As at Dec-20122. Medium-Sized Business is £25m-£100m turnover; Mid-Cap is £100m-£750m turnover3. Experian PH. Market share of trading businesses with turnover £25m-500m
Corporates
Financial Institutions
19%
Market Leader
29%
Lloyds Banking Group
Banking
Delivering Financial Markets
COMMERCIAL BANKING UPDATE 9
COMMERCIAL BANKINGGlobal Corporates: Disciplined participation focused on improving returns
Client Segmentation
SME % of clients
Strategy1
Prioritisation Criteria
Franchise opportunity
UK focused
Crit
eria
Mid-Markets
Global C t
clients1
2
Gold
Platinum
Diamond
Sub-hurdle
Grow / defend
Grow / up-tier
Deepen
Optimise
c.5%
c.15%
c.45%
c.35%
16
Returns
Corporates
Financial Institutions
Lending Transaction Banking
Financial Markets
Capital Markets
Product Penetration3 Returns
RoRWA
COMMERCIAL BANKINGFinancial Institutions: Disciplined participation leveraging London as a global financial centre
SME
Prioritisation Criteria Client Segmentation% of
clientsStrategy
1
Mid-Markets
Global C t
Grow / defend
Grow / up-tier
Manage for efficiency
Optimise
c.2%
c.13%
c.65%
c.20%
Correspondent banking
Institutional distribution
Gold
Platinum
Diamond
Sub-hurdle
clients
Supporting the Commercial Banking Franchise
Support the Group
Crit
eria
1
2
17
Corporates
Financial Institutions
Lending Transaction Banking
Financial Markets
Capital Markets
Product Penetration Returns
RoRWASupport financial services industry in the UK
3
COMMERCIAL BANKING UPDATE 10
COMMERCIAL BANKINGContinued cost discipline creates capacity to re-invest
Re-engineering end-to-end processes
Delayering structure
Headcount efficiencies
11 Centres of Excellence
Simplification initiatives
SME: enabling self-serve
Mid-Markets: additional local RMs
Transaction Banking: stronger platform
Markets: digital channel and targeted
Strategic investments
18
Leverage Group functionality
g gcapability build
Transformation Journey
COMMERCIAL BANKINGDeliver sustainable returns above the cost of equity
Normalisation of funding costsStrategic investments in product capabilityFranchise growth SME / Mid-Markets
2015 Core RoRWA
>2%
SimplificationScalable integrated platformsCentres of Excellence
Cost Control
Income Growth
19
Balance Sheet and Risk
Management
Capital optimisationActive portfolio managementLower risk origination discipline
COMMERCIAL BANKINGNormalisation of funding costs will benefit margin
2.22%2.54%Income
Growth
Net interest margin1‘Cost of money’ better understood
Enhanced commercial behaviours
Legacy long duration asset margin drag
(32bps)
20122011
Cost Control
Growth Legacy long duration asset margin drag
Active portfolio management
Client-led solutions to reduce duration
Focus on better quality deposits
Lending maturity profile1
18% Under 5 yearsOver 5 years2
LTSB 5 year CDS spreads (bps)
336400
500
25
Balance Sheet & Risk Mgt
1. Core Commercial Banking2. Based on specific portfolios with a weighted average life of over 5 years and includes Social Housing & Structured Finance
Commercial behaviour driving further NIM improvement
COMMERCIAL BANKINGLeveraging client focused product capability to drive other income
Income Growth
Other Income growth
+9%
Cost Control
Growth
2012
2,442
2011
2,235
10% Term Lending
Other Income by product1,2
Existing pockets of strong product capability
Investment in client focused products
Quarter on quarter growth
Increasing share of wallet
26
Balance Sheet & Risk Mgt
31%
28%
31%
10%
Financial MarketsCapital Markets3
Transaction BankingTerm Lending
Not increasing risk
1. FY 20122. Core Commercial Banking only3. Capital Markets includes LDC
COMMERCIAL BANKINGCost savings reinvested to create income growth
Income Growth
Over 100 projectsProcess automation
Cost Control
Growth
Cost disciplineSimplification cost savings of £0.2bn paCreating capacity
Process automationCentres of ExcellenceChannels & products
Simplification
Headroom for Investment
27
Balance Sheet & Risk Mgt
£0.5bn targeted incremental investment over three yearsCapability build across Transaction Banking and MarketsInvesting in return enhancing capital light products
Invest for Income Growth
COMMERCIAL BANKING UPDATE 15
COMMERCIAL BANKINGActive portfolio management to enhance returns
133-138Income Growth
Core RWAs (£bn)
(10%)
2015
~125
Growth
5-10
Disciplined Participation
15-20
2012 CRD IV pro forma
CRD IV and other Reg lator change
5-10
2012
38
128
90Cost Control
Growth
28
Lending RWAs £90bn correspond to £102bn of Loans and Advances to Customers
Modest impact of CRD IV and regulatory change
Disciplined participation and active portfolio management
Creating capacity for supporting our clients and participating in FLS
Growth includes franchise growth, maturities and repayments
ParticipationIV pro formaRegulatory change
Balance Sheet & Risk Mgt
LendingNon-Lending
COMMERCIAL BANKINGDeliver sustainable returns above the cost of equity
FY111 FY121 2015
Banking net interest margin 2.54% 2.22%Income Growth Income (£bn) 5.1 4.7
Other Income as a % of income 44% 52%
Cost:Income Ratio 45% 48%Cost Control
Growth
29
Impairment charge as a % of average advances 0.95% 0.67%
Risk appetite Conservative, through the cycle approachTarget market and risk acceptance criteria
Single counterparty and selective sector concentration limitsCaps for higher risk sectors and asset classes
5%
95%
2012 Core asset portfolio1
36
Credit policyMinimum obligor quality rating criteria for bulk of new businessSector and product specific parameters
Robust processes with strong oversight are in place
InternationalUK
1. UK defined as all UK-booked business
COMMERCIAL BANKINGImproving credit risk profile
Improved obligor qualityCore CB (excl. Financial Markets): Probability of Default (commitments)
Sector concentrations under control Obligor quality is stable Heritage LTSB approach to originationAdhered to credit risk appetite for FLSBSU transfers do n 37%
Commercial/Residential Property1
Core
37
BSU transfers down 37%Real Estate exposure under control
Total £43.7bn
UK Good Book£18.0bn
UK Business Support Unit
£12.7bn
Overseas2
£13.0bn
1. 2012 Full Year News Release2. Overseas includes £7.4bn of Ireland assets
Core
Non-Core
COMMERCIAL BANKING UPDATE 20
COMMERCIAL BANKINGLower impairments via prudent risk management
1.1
Core impairment charge (£bn)
(33%)
0.7
20122011
Core AQR (bps)
(28bps)
Core impairments down 33%Core AQR 67bps Good book forborne loans minimal
38
67
95
2011 2012
( p )
COMMERCIAL BANKINGActive portfolio management
OriginationNew centralised pricing controls
Origination discipline
Optimise low return clients
Pricing models reflect full Basel III impactsPortfolio Management team approve all larger transactions
Built client return metrics combining all product revenues and risksClient management plans to deepen walletOptimisation of long dated low margin loans
39
RWA optimisation
Disciplined origination reducing capital requirements for new businessStronger distribution focus
BEST BANK FOR CLIENTSBEST BANK FOR CLIENTSBEST BANK FOR CLIENTSBEST BANK FOR CLIENTS
40
BEST BANK FOR CLIENTSBEST BANK FOR CLIENTSDavid Oldfield, Andrew England, Richard Moore, James Garvey
BEST BANK FOR CLIENTSBEST BANK FOR CLIENTSDavid Oldfield, Andrew England, Richard Moore, James Garvey
CLOSING REMARKS AND Q&AAndrew Bester, Chief Executive, Commercial Banking
BEST BANK FOR CLIENTSBEST BANK FOR CLIENTS
SME & Mid-Markets – David Oldfield
BEST BANK FOR CLIENTSBEST BANK FOR CLIENTS
SME & Mid-Markets – David Oldfield
41
COMMERCIAL BANKING UPDATE 22
COMMERCIAL BANKINGSME supports clients’ needs across the UK
SME UK geographic spread
21%21%
Market share by client turnover1
31% 33%40%
34% 33%31%
Market share by region1,2
£10m-£25m
17%
£2m-£10m
19%
£1m-£2m£0m-£1m
£0m-£1m t/o: ~1m clients
£1m-£25m t/o: ~250,000 clients
~2,500 client facing staff
500 business centres
421. Charterhouse UK Business Banking Survey Q4 2012 (including Verde clients)2. £1m-£25m turnover clients. Market share at Dec-2012
25%31% 33%
Overall UKSouth and West
ScotlandMidlands and North
London and East
3 %
19%
33%
16%
31%
19%
Market LeaderLloyds Banking Group
20 Area Director groups
Area Director and Support Centres
COMMERCIAL BANKINGOpportunity to grow underpenetrated Mid-Markets regions
11% London and South East
Mid-Markets UK geographic spread 2012 Income by region1
30%
40%19%Midlands, East and South West
ScotlandNorth
29%34%
30%34%
29%26%
Market share by region2
£25m-£750m t/o: ~5,000 clients
165+ RMs
20 Area Director groups
431. Comprises Medium-Sized Business and Mid-Cap only2. Experian PH, market shares as at Dec-2012. Market share of trading businesses with turnover £25m-£500m
15%
29%
19%
North Overall UKScotland
29%
Midlands, East and
South West
21%
London and South East
17%
26%
Market LeaderLloyds Banking Group
COMMERCIAL BANKING UPDATE 23
COMMERCIAL BANKINGThe best Relationship Managers local to clients
addresses “client needs” Our proposition
Experienced and knowledgeable RMs, many with 20+ years experienceNamed, local RM supportRM portfolios comprise similar size / sector clients leading to deep insight
Net lending to SME 4% up in a market that declined 4% in 2012Net lending to Mid-Markets in H2 2012 broadly flat in a market that declined 6%Providing discounted lending to SMEs through NLGS and FLSSupport in excess of 100k business start ups annually
Direct access to RMs through client’s preferred channelsReduced time to cash by almost 50%
Best RMs“know the business”
Helping Britain prosper “support UK SME”
Core capabilities“make it easy”
44
Leveraging the combined geographic reach
Access through RMs to broader product/sector specialistsRange of industry accredited key market RMs providing tailored service
make it easy
Franchise growth“help access expertise”
COMMERCIAL BANKINGCommitted to supporting UK clients through a number of government schemes
FLSDiscounts of 1% per annum to all qualifying clients First bank to participate in scheme Committed in excess of £11bn in gross funds to end 2012g
Enterprise Finance
Guarantee (EFG) Scheme
One of the most active EFG lendersBy the end of 2012 we provided– More than 5,200 EFG loans worth in excess of £400m – Represent 26% of all loans granted through the scheme
Business Finance
Key contributor to the Government Business Finance taskforce400 business volunteer mentors – 42% of the UK wide bank mentor population SME and Mid Markets Charters
45
Finance Taskforce
SME and Mid-Markets ChartersClient lending appeals200 client outreach events in 2012
UK Business Angels
Association
Supporting efforts to help SMEs secure equity from private investorsWe are the only bank represented on the Board of the UKBAA£850m early stage equity with advice from angels complements our debt finance support
COMMERCIAL BANKING UPDATE 24
COMMERCIAL BANKINGWinning new clients
Schools ManufacturingAgriculture
Attracted a switcher after 150 year relationship with previous bank
P iti diff ti t d
Bank 57% of all academies
Clients cite service excellence, strength of
iti d d th f
Largest provider of finance to UK agriculture
34% share of lending to f
46
Proposition differentiated through sector knowledge
proposition and depth of sector knowledge as deciding factors
farmers
Support 9 in 10 deals presented to us
BEST BANK FOR CLIENTSBEST BANK FOR CLIENTS
Transaction Banking – Andrew England
BEST BANK FOR CLIENTSBEST BANK FOR CLIENTS
Transaction Banking – Andrew England
47
COMMERCIAL BANKING UPDATE 25
COMMERCIAL BANKINGSignificant volumes across Transaction Banking platforms
Payment volumes (m)1
Leveraging platforms post integration
EUROMONEY TRADE FINANCE April 2012Best Domestic Trade Finance Provider
COMMERCIAL BANKINGInvesting to serve the different needs of our clients
Complete core Financial Markets infrastructure build in 2013– Capability to respond to regulation, automation and capital challenges Alignment to coverage and product partners is critical to stable and diversified income
Mid-Markets
SME
Access to market li idit
Financial Markets Role
Simple FX & Interest Rate Hedging ProductsMoney Market Deposits
FX & Interest Rate Risk ManagementLiquidity Management
Alignment to coverage and product partners is critical to stable and diversified income– Top 3 core banks command 80% share of wallet
Client Segments
54
Global Corporates
Financial Institutions
liquidity through multiple channels
FX & Interest Rate Risk ManagementBond DistributionLiquidity & Collateral Management
Access to market liquidity in FX, Rates & CreditBond Distribution Securitisation Distribution
COMMERCIAL BANKINGEffective intermediation to deliver for the client
“We bring together UK focused clients and relevant investors”
ClientsCapital Markets
private side
Financial Markets
public sideInvestors
55
Origination SyndicationPricing
and Liquidity
DistributionStructuring
and solutions
Research and
Insight
Lending / reciprocity
UK Gateway Strategy
COMMERCIAL BANKING UPDATE 29
COMMERCIAL BANKINGDelivering solutions in capital light products
GEMMBroadcasterARENA
Rapid growth and increased credibility
Supported the c.£3.6bn refinance of Arqiva existing
Single, customisable e-trading interface for FX
Gilt Edged Market Maker
56
Market leading position
Flagship FM product and gateway to our core proposition
debt facilities
Lloyds acted as bookrunner on the Senior and Junior notes
and Money Market deposits with insight, analysis and reporting
Built for our clients by our clients
BEST BANK FOR CLIENTSBEST BANK FOR CLIENTS
Capital Markets – James Garvey
BEST BANK FOR CLIENTSBEST BANK FOR CLIENTS
Capital Markets – James Garvey
57
COMMERCIAL BANKING UPDATE 30
COMMERCIAL BANKINGSupporting clients with financing & risk management
Support relationship managers and their client franchise ambitions
Focus on Debt Financing and Risk Management
Partner with Coverage and Financial Markets to drive distribution in support of originate-to-distribute model
Seek to maximise share of wallet by addressing client needs
Conservative risk profile with strong oversight and control
Build a competitive range of client-centric
financing and risk management
products
58
COMMERCIAL BANKINGEstablished a competitive range of client solution capabilities
Largest provider of syndicated
Supporting UK clients How we are structured to succeed
Largest provider of syndicated lending to the UK economy
An established UK corporate bond franchise
Leading UK corporate Risk Management Solutions team help
Financing Risk Management
Loans Bonds Asset Backed Solutions
Loan Markets
Asset Backed Bonds
Corp / FI DCM
Risk Management Solutions
Product Solutions
59
Management Solutions team help clients manage their balance sheet risks
Building an enhanced financing and risk management product suite for our clients
Short Term FinancingInfrastructure & Energy
Acquisition Finance
COMMERCIAL BANKING UPDATE 31
CAPITAL MARKETS Strong growth in Capital Markets franchise
60%
nshi
ps 50% UK competitors
Total UK Corporate DCM Service Quality
#2 for ‘Best Domestic Bond Distribution’
Lloyds Banking Group improvement in overall DCM specialist capability was the largest among major competitors
2012
-150 -100 -50 0
20112010
DCM Origination Quality* Difference from average
15010050
Impo
rtant
DC
M R
elat
ion
0%
40%
20%
10%
30%
competitors
IB providers
Interest Rate Derivative Service Quality
Lloyds Banking Group
60
UK competitors
#1 in UK corporate IRD Market Share
#1 in UK corporate IRD Sterling Swaps Penetration
#1 jointly for Quality Index and Quality Index Sales
#1 for ‘Best’ & ‘Top 3’ Sales Rep
20112010
2012
100
2%
-500%
10%
6%
-150 0
8%
150
Est
imat
ed M
arke
t Sha
re
4%
-100 50
Service Quality Difference from average
IB providers
Lloyds Banking Group
Housing Association Bond League Table FY 20121
COMMERCIAL BANKINGIncreasing the availability of UK housing stock through public bond issues
Rank BookrunnerAmount
(£m) No.3Market share
1Lloyds Banking Group 883 9 27.7%
2 Peer 1 801 8 25.1%
3 Peer 2 634 7 19.9%
4 Peer 3 300 4 9.4%
5 Peer 4 233 4 7.3%
£225m 5.375% notes due 2042
Bookrunner
May 2012
£225m 5.375% notes due 2042
Bookrunner
May 2012
Case Study: Saxon Weald
61
6 Peer 5 100 1 3.1%
Total2 2,785 16 100%
Excludes aggregation vehicle transactions and private placements
Saxon Weald issued £225m, 30 yr amortising bonds
1. Dealogic2. Total Amount and Market Share includes banks not in the top 63. Each deal may have more than one Bookrunner
BEST BANK FOR CLIENTSDavid Oldfield, Andrew England,
Richard Moore, James Garvey
CLOSING REMARKS AND Q&ACLOSING REMARKS AND Q&AAndrew Bester, Chief Executive, Commercial Banking
CLOSING REMARKS AND Q&ACLOSING REMARKS AND Q&AAndrew Bester, Chief Executive, Commercial Banking
COMMERCIAL BANKING UPDATE 33
Transformation Journey
COMMERCIAL BANKINGDeliver sustainable returns above the cost of equity
Normalisation of funding costsStrategic investments in product capabilityFranchise growth SME / Mid-Markets
2015 Core RoRWA
>2%
SimplificationScalable integrated platformsCentres of Excellence
Cost Control
Income Growth
64
Balance Sheet and Risk
Management
Capital optimisationActive portfolio managementLower risk origination discipline
Relentless execution
LLOYDS BANKING GROUP LLOYDS BANKING GROUP LLOYDS BANKING GROUP LLOYDS BANKING GROUP COMMERCIAL BANKING UPDATECOMMERCIAL BANKING UPDATECOMMERCIAL BANKING UPDATECOMMERCIAL BANKING UPDATE
65
Best Bank for ClientsBest Bank for ClientsBest Bank for ClientsBest Bank for Clients
COMMERCIAL BANKING UPDATE 34
APPENDIX
66
Andrew Bester, Group Director and Chief Executive, Commercial Banking, was appointed on 1 July 2012. He has worked in Financial Services for 22 years in a wide variety of client origination, product specialist, finance and general management roles across 3 continents. He has spent most of his senior career transforming businesses.
Andrew started his banking career with Standard Chartered and rejoined in 2004. Most recently within Consumer Banking he was Global COO having also been the Chief Financial Officer. Prior to this he was Co-Head of Wholesale Banking for Greater China and before that undertook the same role for the Africa region. He also served on the Boards of Standard Chartered in China, Korea and Taiwan.
Before joining Standard Chartered, Andrew was the Group Finance Director for Xchanging, a leading European outsourcing firm. Prior to this, he worked at Deutsche Bank in Europe.
Andrew qualified as a Chartered Accountant with Deloitte & Touche. He is a member of the South African Institute of Chartered Accountants the Chartered Institute of Management
67
South African Institute of Chartered Accountants, the Chartered Institute of Management Accountants and is a Chartered Global Management Accountant. Andrew is also a member of the Association of Corporate Treasurers.
Andrew is the Chairman of Lloyds Development Capital (LDC) and sits on the Boards of both the Global Financial Markets Association (GFMA) and the Association of Financial Marketsin Europe (AFME).
Andrew reports to António Horta-Osório and is a member of the Group Executive Committee
COMMERCIAL BANKING UPDATE 35
David Oldfield – MD, SME & Mid-Markets Head of Lending
Transaction BankingAndrew has worked for Lloyds Banking Group, UniCredit, Deutsche Bank and Citibank, and has over 30 years of banking experience
MarketsRichard has worked for Lloyds Banking Group and Citigroup, and has over 25 years of banking experience
James Garvey – MD, Capital MarketsJames has worked for Lloyds Banking Group, Goldman Sachs, West LB, UBS
Darryl Eales – MD, LDCDarryl has worked for Lloyds Banking Group and has over 25 years of banking experience
69
Group, Goldman Sachs, West LB, UBS and Citicorp, and has over 25 years of banking experience
experience
COMMERCIAL BANKING UPDATE 36
Adrian Walker – MD, Business Development and TransformationAdrian has worked for Lloyds Banking Group RBS and NatWest and Royal
Karin Cook – Chief Operating OfficerKarin has worked for Lloyds Banking Group, HSBC, Goldman Sachs and Morgan Stanley and has over 20 years
APPENDIX: MANAGEMENT BIOGRAPHIESDelivery / Functional Support Leadership
Group, RBS and NatWest, and Royal Bank of Canada and has over 25 years of banking experience
Morgan Stanley, and has over 20 years of banking experience
Stephen Shelley – Risk DirectorStephen has worked for Lloyds Banking Group and Barclays, and has over 20 years of banking experience
Nick Slape – Finance DirectorNick has worked for Lloyds Banking Group, Lehman Brothers, Merrill Lynch, Deutsche Bank and Dresdner Kleinwort, and has over 25 years of banking experience
70
Hugh McKay – HR DirectorHugh has worked for Lloyds Banking Group and has over 30 years of banking experience
FORWARD LOOKING STATEMENTSThis presentation contains forward looking statements with respect to the business, strategy and plans of the Lloyds Banking Group, its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about the Group or the Group’s management’s beliefs and expectations, are forward looking statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future The Group’s actual future business strategy plans and/or results may differ materially from those expressed or implied in these
FORWARD LOOKING STATEMENTS ANDBASIS OF PRESENTATION
future. The Group s actual future business, strategy, plans and/or results may differ materially from those expressed or implied in these forward looking statements as a result of a variety of risks, uncertainties and other factors, including, but not limited to, UK domestic and global economic and business conditions; the ability to derive cost savings and other benefits, including as a result of the Group’s simplification programme; the ability to access sufficient funding to meet the Group’s liquidity needs; changes to the Group’s credit ratings; risks concerning borrower or counterparty credit quality; instability in the global financial markets, including Eurozone instability and the impact of any sovereign credit rating downgrade or other sovereign financial issues; market related risks including, but not limited to, changes in interest rates and exchange rates; changing demographic and market related trends; changes in customer preferences; changes to laws, regulation, accounting standards or taxation, including changes to regulatory capital or liquidity requirements; the policies and actions of governmental or regulatory authorities in the UK, the European Union, or jurisdictions outside the UK, including other European countries and the US; the implementation of the draft EU crisis management framework directive and banking reform following the recommendations made by the Independent Commission on Banking; the ability to attract and retain senior management and other employees; requirements or limitations imposed on the Group as a result of HM Treasury’s investment in the Group; the ability to complete satisfactorily the disposal of certain assets as part of the Group’s EC state aid obligations; the extent of any future impairment charges or write-downs caused by depressed asset valuations, market disruptions and illiquid markets; the effects of competition and the actions of competitors including non bank financial services and lendingdisruptions and illiquid markets; the effects of competition and the actions of competitors, including non-bank financial services and lending companies; exposure to regulatory scrutiny, legal proceedings, regulatory investigations or complaints, and other factors. Please refer to the latest Annual Report on Form 20-F filed with the US Securities and Exchange Commission for a discussion of certain factors together with examples of forward looking statements. The forward looking statements contained in this presentation are made as at the date of this presentation, and the Group undertakes no obligation to update any of its forward looking statements.
BASIS OF PRESENTATIONThe results of the Group and its business are presented in this presentation on a management basis and include certain income statement, balance sheet and regulatory capital analysis between core and non-core portfolios to enable a better understanding of the Group’s core business trends and outlook. Please refer to the Basis of Presentation in the 2012 Results News Release which sets out the principles adopted in the preparation of the management basis of reporting as well as certain factors and methodologies regarding the allocation of income, expenses, assets and liabilities in respect of the Group's core and non-core portfolios.