Supporting customers and colleagues in difficult times
● Actively supporting
retail, small business and commercial customers in the current
environment through a range of flexible propositions and full
support for Government schemes, including Coronavirus Business
Interruption Loan Scheme (CBILS) and Covid Corporate Financing
Facility (CCFF)
● Strong operational
resilience with c.90 per cent of branches remaining open and ATM
availability exceeding 95 per cent
● Multi-channel
distribution model, with the UK’s leading digital bank
enabling the Group to continue to serve customers throughout the
lockdown
Financial performance reflects revised economic
outlook
● Statutory profit
before tax of £74 million, impacted by a significantly
increased impairment charge of £1,430 million given the
revised economic outlook. Statutory return on tangible equity of
5.0 per cent with tangible net assets per share of 57.4
pence
● Solid trading
surplus of £1,988 million, a reduction of 19 per
cent compared to the first three months of 2019, but an increase of
7 per cent on the final quarter of 2019 (decrease of 4 per
cent excluding the bank levy)
- Net income of
£4.0 billion, down 11 per cent, with average interest-earning
banking assets slightly lower at £432 billion, net
interest margin of 2.79 per cent and other income of £1.2
billion, down 21 per cent year on year due to lower levels of
client activity and the absence of 2019 one-off items
- Total costs of
£2.0 billion down 1 per cent, after absorbing
coronavirus-related expenses, driven by continued reductions in
operating costs, down 4 per cent
● The
impairment charge in the quarter increased significantly to
£1,430 million, primarily driven by updates to the
Group’s economic outlook and some charges relating to
existing restructuring cases. Given the economic outlook we will
inevitably be impacted both within the existing book and
potentially in the new lending we are undertaking to support our
customers. However, the Group’s loan portfolio remains robust
and well positioned given its low risk business model
Balance sheet strength maintained with capital, funding and
liquidity remaining strong
● CET1 ratio remains
strong at 14.2 per cent with CCyB reduced to zero, resulting in
increased headroom over regulatory requirements; significant
resources to support customers while absorbing potential credit
losses
● Loans and advances
increased £2.7 billion in the quarter to £443.1 billion,
with increased corporate lending, primarily drawdowns of existing
corporate facilities, partially offset by expected reductions in
the mortgage book along with reductions in credit cards, where
customer activity reduced in March
● Loan to deposit
ratio down 4 percentage points to 103 per cent, largely due to
increased commercial deposits
Outlook
● Given the
significant change in the operating environment and economic
expectations the Group’s previous guidance is no longer
appropriate. The impact of lower rates, lower levels of activity
and higher impairment on the Group’s business will continue
into the second quarter, but remains difficult to quantify given
the significant uncertainty. The Group will update the market once
there is greater clarity
● The longer-term
impact of coronavirus remains unclear but the Group will maintain
its focus on supporting customers and the UK economy while
remaining well positioned to deliver for customers beyond the
crisis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
|
|
Quarter
|
|
|
|
|
ended
|
|
ended
|
|
|
|
ended
|
|
|
|
|
31 Mar
|
|
31 Mar
|
|
|
|
31 Dec
|
|
|
|
|
2020
|
|
2019
|
|
Change
|
|
2019
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
2,950
|
|
3,083
|
|
(4)
|
|
3,102
|
|
(5)
|
Other income
|
|
1,226
|
|
1,556
|
|
(21)
|
|
1,267
|
|
(3)
|
Operating lease depreciation
|
|
(224)
|
|
(219)
|
|
(2)
|
|
(236)
|
|
5
|
Net income
|
|
3,952
|
|
4,420
|
|
(11)
|
|
4,133
|
|
(4)
|
Operating costs
|
|
(1,877)
|
|
(1,957)
|
|
4
|
|
(2,058)
|
|
9
|
Remediation
|
|
(87)
|
|
(20)
|
|
|
|
(219)
|
|
60
|
Total costs
|
|
(1,964)
|
|
(1,977)
|
|
1
|
|
(2,277)
|
|
14
|
Trading surplus
|
|
1,988
|
|
2,443
|
|
(19)
|
|
1,856
|
|
7
|
Impairment
|
|
(1,430)
|
|
(275)
|
|
|
|
(341)
|
|
|
Underlying profit
|
|
558
|
|
2,168
|
|
(74)
|
|
1,515
|
|
(63)
|
Restructuring
|
|
(63)
|
|
(126)
|
|
50
|
|
(191)
|
|
67
|
Volatility and other items
|
|
(421)
|
|
(339)
|
|
(24)
|
|
122
|
|
|
Payment protection insurance provision
|
|
–
|
|
(100)
|
|
100
|
|
–
|
|
|
Statutory profit before tax
|
|
74
|
|
1,603
|
|
(95)
|
|
1,446
|
|
(95)
|
Tax credit (expense)
|
|
406
|
|
(403)
|
|
|
|
(427)
|
|
|
Statutory profit after tax
|
|
480
|
|
1,200
|
|
(60)
|
|
1,019
|
|
(53)
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
0.5p
|
|
1.5p
|
|
(67)
|
|
1.3p
|
|
(62)
|
|
|
|
|
|
|
|
|
|
|
|
Banking net interest margin
|
|
2.79%
|
|
2.91%
|
|
(12)bp
|
|
2.85%
|
|
(6)bp
|
Average interest-earning banking assets
|
|
£432bn
|
|
£433bn
|
|
–
|
|
£437bn
|
|
(1)
|
Cost:income ratio
|
|
49.7%
|
|
44.7%
|
|
5.0pp
|
|
55.1%
|
|
(5.4)pp
|
Asset quality ratio
|
|
1.30%
|
|
0.25%
|
|
105bp
|
|
0.30%
|
|
100bp
|
Underlying return on tangible equity
|
|
4.7%
|
|
17.0%
|
|
(12.3)pp
|
|
12.2%
|
|
(7.5)pp
|
Return on tangible equity
|
|
5.0%
|
|
12.5%
|
|
(7.5)pp
|
|
11.0%
|
|
(6.0)pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 Mar
|
|
At 31 Mar
|
|
Change
|
|
At 31 Dec
|
|
Change
|
|
|
2020
|
|
2019
|
|
%
|
|
2019
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to customers1
|
|
£443bn
|
|
£441bn
|
|
1
|
|
£440bn
|
|
1
|
Customer deposits2
|
|
£428bn
|
|
£417bn
|
|
3
|
|
£412bn
|
|
4
|
Loan to deposit ratio
|
|
103%
|
|
106%
|
|
(3)pp
|
|
107%
|
|
(4)pp
|
CET1 ratio3,4
|
|
14.2%
|
|
13.9%
|
|
0.3pp
|
|
13.8%
|
|
0.4pp
|
Transitional MREL ratio3,4
|
|
34.5%
|
|
31.5%
|
|
3.0pp
|
|
32.6%
|
|
1.9pp
|
UK leverage ratio3,4
|
|
5.3%
|
|
5.3%
|
|
–
|
|
5.2%
|
|
0.1pp
|
Risk-weighted assets3
|
|
£209bn
|
|
£208bn
|
|
–
|
|
£203bn
|
|
3
|
Tangible net assets per share
|
|
57.4p
|
|
53.4p
|
|
4.0p
|
|
50.8p
|
|
6.6p
|
|
|
1
|
Excludes
reverse repos of £55.2 billion (31 December 2019: £54.6
billion).
|
2
|
Excludes
repos of £9.4 billion (31 December 2019: £9.5
billion).
|
3
|
The
CET1, MREL, leverage ratios and risk-weighted assets at 31 December
2019 were reported on a pro forma basis, reflecting the dividend
paid up by the Insurance business in the subsequent first quarter
period.
|
4
|
Incorporating
profits for the period that remain subject to formal verification
in accordance with the Capital Requirements
Regulation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
ended
|
|
ended
|
|
ended
|
|
ended
|
|
ended
|
|
|
31 Mar
|
|
31 Dec
|
|
30 Sept
|
|
30 June
|
|
31 Mar
|
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
2,950
|
|
3,102
|
|
3,130
|
|
3,062
|
|
3,083
|
Other income
|
|
1,226
|
|
1,267
|
|
1,315
|
|
1,594
|
|
1,556
|
Operating lease depreciation
|
|
(224)
|
|
(236)
|
|
(258)
|
|
(254)
|
|
(219)
|
Net income
|
|
3,952
|
|
4,133
|
|
4,187
|
|
4,402
|
|
4,420
|
Operating costs
|
|
(1,877)
|
|
(2,058)
|
|
(1,911)
|
|
(1,949)
|
|
(1,957)
|
Remediation
|
|
(87)
|
|
(219)
|
|
(83)
|
|
(123)
|
|
(20)
|
Total costs
|
|
(1,964)
|
|
(2,277)
|
|
(1,994)
|
|
(2,072)
|
|
(1,977)
|
Trading surplus
|
|
1,988
|
|
1,856
|
|
2,193
|
|
2,330
|
|
2,443
|
Impairment
|
|
(1,430)
|
|
(341)
|
|
(371)
|
|
(304)
|
|
(275)
|
Underlying profit
|
|
558
|
|
1,515
|
|
1,822
|
|
2,026
|
|
2,168
|
Restructuring
|
|
(63)
|
|
(191)
|
|
(98)
|
|
(56)
|
|
(126)
|
Volatility and other items
|
|
(421)
|
|
122
|
|
126
|
|
(126)
|
|
(339)
|
Payment protection insurance provision
|
|
–
|
|
–
|
|
(1,800)
|
|
(550)
|
|
(100)
|
Statutory profit before tax
|
|
74
|
|
1,446
|
|
50
|
|
1,294
|
|
1,603
|
Tax credit (expense)
|
|
406
|
|
(427)
|
|
(288)
|
|
(269)
|
|
(403)
|
Statutory profit (loss) after tax
|
|
480
|
|
1,019
|
|
(238)
|
|
1,025
|
|
1,200
|
|
|
|
|
|
|
|
|
|
|
|
Banking net interest margin
|
|
2.79%
|
|
2.85%
|
|
2.88%
|
|
2.89%
|
|
2.91%
|
Average interest-earning banking assets
|
|
£432bn
|
|
£437bn
|
|
£435bn
|
|
£433bn
|
|
£433bn
|
|
|
|
|
|
|
|
|
|
|
|
Cost:income ratio
|
|
49.7%
|
|
55.1%
|
|
47.6%
|
|
47.1%
|
|
44.7%
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality ratio
|
|
1.30%
|
|
0.30%
|
|
0.33%
|
|
0.27%
|
|
0.25%
|
Gross asset quality ratio
|
|
1.35%
|
|
0.39%
|
|
0.40%
|
|
0.38%
|
|
0.30%
|
|
|
|
|
|
|
|
|
|
|
|
Underlying return on tangible equity
|
|
4.7%
|
|
12.2%
|
|
14.3%
|
|
15.6%
|
|
17.0%
|
Return on tangible equity
|
|
5.0%
|
|
11.0%
|
|
(2.8)%
|
|
10.5%
|
|
12.5%
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to customers1
|
|
£443bn
|
|
£440bn
|
|
£447bn
|
|
£441bn
|
|
£441bn
|
Customer deposits2
|
|
£428bn
|
|
£412bn
|
|
£419bn
|
|
£418bn
|
|
£417bn
|
Loan to deposit ratio
|
|
103%
|
|
107%
|
|
107%
|
|
106%
|
|
106%
|
Risk-weighted assets3
|
|
£209bn
|
|
£203bn
|
|
£209bn
|
|
£207bn
|
|
£208bn
|
Tangible net assets per share
|
|
57.4p
|
|
50.8p
|
|
52.0p
|
|
53.0p
|
|
53.4p
|
|
|
1
|
Excludes
reverse repos.
|
2
|
Excludes
repos.
|
3
|
Risk-weighted
assets at 30 June 2019 and 31 December 2019 are reported on a pro
forma basis reflecting the Insurance dividend paid to the Group in
the subsequent reporting period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 Mar
|
|
At 31 Mar
|
|
|
|
At 31 Dec
|
|
|
|
|
|
2020
|
|
2019
|
|
Change
|
|
2019
|
|
Change
|
|
|
|
£bn
|
|
£bn
|
|
%
|
|
£bn
|
|
%
|
|
Loans and advances to customers
|
|
|
|
|
|
|
|
|
|
|
|
Open mortgage book
|
|
268.1
|
|
264.1
|
|
2
|
|
270.1
|
|
(1)
|
|
Closed mortgage book
|
|
17.9
|
|
20.5
|
|
(13)
|
|
18.5
|
|
(3)
|
|
Credit cards
|
|
16.7
|
|
17.7
|
|
(6)
|
|
17.7
|
|
(6)
|
|
UK Retail unsecured loans
|
|
8.6
|
|
8.1
|
|
6
|
|
8.4
|
|
2
|
|
UK Motor Finance
|
|
15.8
|
|
15.3
|
|
3
|
|
15.6
|
|
1
|
|
Overdrafts
|
|
1.2
|
|
1.2
|
|
–
|
|
1.3
|
|
(8)
|
|
Retail other1
|
|
9.3
|
|
8.5
|
|
9
|
|
9.0
|
|
3
|
|
SME2,3
|
|
32.0
|
|
32.1
|
|
–
|
|
32.1
|
|
–
|
|
Mid Corporates3
|
|
4.7
|
|
5.3
|
|
(11)
|
|
5.3
|
|
(11)
|
|
Corporate and Institutional3
|
|
60.9
|
|
59.6
|
|
2
|
|
54.6
|
|
12
|
|
Commercial Banking other3
|
|
4.9
|
|
4.6
|
|
7
|
|
5.2
|
|
(6)
|
|
Wealth
|
|
0.9
|
|
0.9
|
|
–
|
|
0.9
|
|
–
|
|
Central items
|
|
2.1
|
|
2.6
|
|
(19)
|
|
1.7
|
|
24
|
|
Loans and advances to
customers4
|
|
443.1
|
|
440.5
|
|
1
|
|
440.4
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer deposits
|
|
|
|
|
|
|
|
|
|
|
|
Retail current accounts
|
|
79.9
|
|
75.2
|
|
6
|
|
76.9
|
|
4
|
|
Commercial current accounts2,5
|
|
34.5
|
|
33.9
|
|
2
|
|
34.9
|
|
(1)
|
|
Retail relationship savings accounts
|
|
144.1
|
|
144.7
|
|
–
|
|
144.5
|
|
–
|
|
Retail tactical savings accounts
|
|
12.7
|
|
15.6
|
|
(19)
|
|
13.3
|
|
(5)
|
|
Commercial deposits2,6
|
|
142.5
|
|
133.0
|
|
7
|
|
127.6
|
|
12
|
|
Wealth
|
|
13.3
|
|
13.9
|
|
(4)
|
|
13.7
|
|
(3)
|
|
Central items
|
|
1.4
|
|
0.7
|
|
|
|
0.9
|
|
56
|
|
Total customer
deposits7
|
|
428.4
|
|
417.0
|
|
3
|
|
411.8
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
861.7
|
|
818.3
|
|
5
|
|
833.9
|
|
3
|
|
Total liabilities
|
|
809.0
|
|
767.8
|
|
5
|
|
786.1
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
46.6
|
|
43.8
|
|
6
|
|
41.7
|
|
12
|
|
Other equity instruments
|
|
5.9
|
|
6.5
|
|
(9)
|
|
5.9
|
|
–
|
|
Non-controlling interests
|
|
0.2
|
|
0.2
|
|
–
|
|
0.2
|
|
–
|
|
Total equity
|
|
52.7
|
|
50.5
|
|
4
|
|
47.8
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares in issue, excluding own shares
|
|
70,411m
|
|
71,165m
|
|
(1)
|
|
70,031m
|
|
1
|
|
|
|
1
|
Primarily
Europe.
|
2
|
Includes
Retail Business Banking.
|
3
|
Commercial
Banking segmentation has been updated to reflect how the business
is managed by the Group.
|
4
|
Excludes
reverse repos.
|
5
|
Primarily
non interest-bearing Commercial Banking current
accounts.
|
6
|
Primarily
Commercial Banking interest-bearing accounts.
|
7
|
Excludes
repos.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
|
|
Quarter
|
|
|
|
|
ended
|
|
ended
|
|
|
|
ended
|
|
|
|
|
31 Mar
|
|
31 Mar
|
|
|
|
31 Dec
|
|
|
|
|
2020
|
|
2019
|
|
Change
|
|
2019
|
|
Change
|
|
|
£m
|
|
£m
|
|
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charge
|
|
1,430
|
|
275
|
|
|
|
341
|
|
|
Asset quality ratio
|
|
1.30%
|
|
0.25%
|
|
105bp
|
|
0.30%
|
|
100bp
|
Gross asset quality ratio
|
|
1.35%
|
|
0.30%
|
|
105bp
|
|
0.39%
|
|
96bp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 Mar
|
|
At 31 Dec
|
|
|
|
|
|
|
|
|
20201
|
|
20191
|
|
Change
|
|
|
|
|
|
|
%
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stage 3 loans and advances to customers as a % of
total
|
|
|
|
|
|
1.8
|
|
1.8
|
|
–
|
Stage 3 ECL2
allowances as % of Stage 3 drawn
balances
|
|
|
|
|
|
25.0
|
|
22.5
|
|
2.5pp
|
|
|
|
|
|
|
|
|
|
|
|
Total ECL2
allowances as % of drawn
balances
|
|
|
|
|
|
1.0
|
|
0.8
|
|
0.2pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
|
|
Quarter
|
|
|
|
|
ended
|
|
ended
|
|
|
|
ended
|
|
|
|
|
31 Mar
|
|
31 Mar
|
|
|
|
31 Dec
|
|
|
|
|
2020
|
|
2019
|
|
Change
|
|
2019
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Underlying charges
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
325
|
|
302
|
|
(8)
|
|
222
|
|
(46)
|
Commercial
Banking
|
|
52
|
|
1
|
|
|
|
112
|
|
54
|
Insurance
and Wealth
|
|
1
|
|
(1)
|
|
|
|
(2)
|
|
|
Central
items
|
|
(10)
|
|
(27)
|
|
63
|
|
9
|
|
|
|
|
368
|
|
275
|
|
(34)
|
|
341
|
|
(8)
|
Coronavirus impacted restructuring cases
|
|
218
|
|
–
|
|
|
|
–
|
|
|
Updated economic outlook
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
564
|
|
–
|
|
|
|
–
|
|
|
Commercial
Banking
|
|
280
|
|
–
|
|
|
|
–
|
|
|
|
|
844
|
|
–
|
|
|
|
–
|
|
|
Impairment charge
|
|
1,430
|
|
275
|
|
|
|
341
|
|
|
|
|
1
|
Underlying
basis.
|
2
|
Expected
credit loss.
|
|
|
|
|
|
|
|
|
|
At 31 Mar
|
|
At 31 Dec
|
|
Change
|
|
|
2020
|
|
2019
|
|
%
|
|
|
|
|
|
|
|
Loans and advances to customers1
|
|
£443bn
|
|
£440bn
|
|
1
|
Customer deposits2
|
|
£428bn
|
|
£412bn
|
|
4
|
Loan to deposit ratio
|
|
103%
|
|
107%
|
|
(4)pp
|
|
|
|
|
|
|
|
Wholesale funding3
|
|
£126bn
|
|
£124bn
|
|
1
|
Wholesale funding <1 year maturity3
|
|
£39bn
|
|
£39bn
|
|
(2)
|
Of which money-market funding <1 year
maturity3
|
|
£25bn
|
|
£24bn
|
|
5
|
Liquidity coverage ratio - eligible assets4
|
|
£132bn
|
|
£131bn
|
|
–
|
Liquidity coverage ratio5
|
|
138%
|
|
137%
|
|
1pp
|
|
|
1
|
Excludes
reverse repos of £55.2 billion (31 December 2019: £54.6
billion).
|
2
|
Excludes
repos of £9.4 billion (31 December 2019: £9.5
billion).
|
3
|
Excludes
balances relating to margins of £7.3 billion (31 December
2019: £4.2 billion).
|
4
|
Eligible
assets are calculated as a simple average of month end observations
over the previous 12 months.
|
5
|
The
Liquidity coverage ratio is calculated as a simple average of month
end observations over the previous 12 months.
|
|
|
|
|
|
Retail
|
|
|
|
|
Payment holidays granted
|
|
|
|
|
Mortgages
|
|
|
|
404k
|
Average LTV
|
|
|
|
50%
|
UK
Retail unsecured loans
|
|
|
|
174k
|
UK
Motor Finance
|
|
|
|
83k
|
Credit
cards
|
|
|
|
219k
|
|
|
|
|
|
Commercial Banking
|
|
|
|
|
Clients supported to access Coronavirus Business
Interruption
Loan Scheme (CBILS)
|
|
£410m
|
|
3.0k
|
New overdraft requests with no arrangement fee
|
|
|
|
12.9k
|
Capital repayment holidays granted
|
|
|
|
24.1k
|
|
|
|
|
|
|
|
|
|
At 31 Mar
|
|
At 31 Dec
|
|
Change
|
|
|
2020
|
|
2019
|
|
%
|
|
|
|
|
|
|
|
CET1 ratio1,2
|
|
14.2%
|
|
13.8%
|
|
0.4pp
|
Transitional total capital ratio1,2
|
|
21.9%
|
|
21.5%
|
|
0.4pp
|
Transitional MREL ratio1,2
|
|
34.5%
|
|
32.6%
|
|
1.9pp
|
UK leverage ratio1,2
|
|
5.3%
|
|
5.2%
|
|
0.1pp
|
Risk-weighted assets1
|
|
£209bn
|
|
£203bn
|
|
3
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
£47bn
|
|
£42bn
|
|
12
|
Tangible net assets per share
|
|
57.4p
|
|
50.8p
|
|
6.6p
|
|
|
1
|
The
CET1, transitional total capital, MREL and leverage ratios and
risk-weighted assets at 31 December 2019 were reported on a pro
forma basis, reflecting the dividend paid up by the Insurance
business in the subsequent first quarter period.
|
2
|
Incorporating
profits for the period that remain subject to formal verification
in accordance with the Capital Requirements
Regulation.
|
|
|
|
|
|
|
|
Pro forma CET1 ratio at 31 December 2019
|
|
|
|
|
|
13.8%
|
Banking business underlying capital build
excluding impairment charge (bps)
|
|
|
|
|
|
56
|
Impairment charge (bps)
|
|
|
|
|
|
(56)
|
Banking business underlying capital build (bps)
|
|
|
|
|
|
–
|
RWA movements (bps)
|
|
|
|
|
|
(29)
|
Other movements (bps)
|
|
|
|
|
|
(9)
|
Reversal of FY 2019 ordinary dividend accrual (bps)
|
|
|
|
|
|
83
|
CET1 ratio at 31 March 2020
|
|
|
|
|
|
14.2%
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
|
ended
|
|
ended
|
|
|
31 Mar
|
|
31 Mar
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Group net interest income – statutory basis
(£m)
|
|
5,185
|
|
2,113
|
Insurance gross up (£m)
|
|
(2,265)
|
|
878
|
Volatility and other items (£m)
|
|
30
|
|
92
|
Group net interest income – underlying basis
(£m)
|
|
2,950
|
|
3,083
|
Non-banking net interest expense (£m)
|
|
44
|
|
22
|
Banking net interest income – underlying basis
(£m)
|
|
2,994
|
|
3,105
|
|
|
|
|
|
Net loans and advances to customers
(£bn)1
|
|
443.1
|
|
440.5
|
Impairment provision and fair value adjustments
(£bn)
|
|
4.8
|
|
4.0
|
Non-banking items:
|
|
|
|
|
Fee-based
loans and advances (£bn)
|
|
(7.6)
|
|
(6.9)
|
Other
non-banking (£bn)
|
|
(3.1)
|
|
(3.4)
|
Gross banking loans and advances (£bn)
|
|
437.2
|
|
434.2
|
Averaging (£bn)
|
|
(5.6)
|
|
(0.8)
|
Average interest-earning banking assets (£bn)
|
|
431.6
|
|
433.4
|
|
|
|
|
|
Banking net interest margin (%)
|
|
2.79
|
|
2.91
|
|
|
1
|
Excludes
reverse repos.
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
|
ended
|
|
ended
|
|
|
31 Mar
|
|
31 Mar
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Average shareholders' equity (£bn)
|
|
44.1
|
|
43.6
|
Average intangible assets (£bn)
|
|
(6.1)
|
|
(5.8)
|
Average tangible equity (£bn)
|
|
38.0
|
|
37.8
|
|
|
|
|
|
Underlying profit after tax (£m)
|
|
468
|
|
1,636
|
Add back amortisation of intangible assets (post tax)
(£m)
|
|
105
|
|
88
|
Less profit attributable to non-controlling interests and other
equity holders (£m)
|
|
(132)
|
|
(137)
|
Adjusted underlying profit after tax (£m)
|
|
441
|
|
1,587
|
|
|
|
|
|
Underlying return on tangible equity (%)
|
|
4.7
|
|
17.0
|
|
|
|
|
|
Group statutory profit after tax (£m)
|
|
480
|
|
1,200
|
Add back amortisation of intangible assets (post tax)
(£m)
|
|
105
|
|
88
|
Add back amortisation of purchased intangible assets (post tax)
(£m)
|
|
17
|
|
18
|
Less profit attributable to non-controlling interests and other
equity holders (£m)
|
|
(132)
|
|
(137)
|
Adjusted statutory profit after tax (£m)
|
|
470
|
|
1,169
|
|
|
|
|
|
Statutory return on tangible equity (%)
|
|
5.0
|
|
12.5
|
|
|
|
|
|
|
|
|
|
|
|
Base case
|
|
Upside
|
|
Downside
|
|
Severe
downside
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
|
|
|
|
|
|
|
At 31 March 2020
|
|
|
|
|
|
|
|
|
GDP
|
|
0.9
|
|
1.2
|
|
0.4
|
|
(0.1)
|
Interest rate
|
|
0.24
|
|
0.88
|
|
0.08
|
|
0.02
|
Unemployment rate
|
|
5.0
|
|
4.7
|
|
6.5
|
|
7.6
|
House price growth
|
|
1.4
|
|
4.7
|
|
(3.7)
|
|
(8.8)
|
Commercial real estate price growth
|
|
(0.3)
|
|
1.0
|
|
(4.8)
|
|
(7.2)
|
|
|
|
|
|
|
|
|
|
At 31 December 2019
|
|
|
|
|
|
|
|
|
GDP
|
|
1.3
|
|
1.6
|
|
1.1
|
|
0.4
|
Interest rate
|
|
1.25
|
|
2.04
|
|
0.49
|
|
0.11
|
Unemployment rate
|
|
4.3
|
|
3.9
|
|
5.8
|
|
7.2
|
House price growth
|
|
1.3
|
|
5.0
|
|
(2.6)
|
|
(7.1)
|
Commercial real estate price growth
|
|
(0.2)
|
|
1.8
|
|
(3.8)
|
|
(7.1)
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2021
|
|
2022
|
|
2020-22
|
|
|
%
|
|
%
|
|
%
|
|
%
|
Base Case
|
|
|
|
|
|
|
|
|
GDP
|
|
(5.0)
|
|
3.0
|
|
3.5
|
|
1.2
|
Interest rate
|
|
0.10
|
|
0.25
|
|
0.25
|
|
0.20
|
Unemployment rate
|
|
5.9
|
|
5.4
|
|
4.7
|
|
5.3
|
House price growth
|
|
(5.0)
|
|
2.0
|
|
2.5
|
|
(0.7)
|
Commercial real estate price growth
|
|
(15.0)
|
|
5.0
|
|
5.0
|
|
(6.3)
|
|
|
|
|
|
|
|
|
|
Upside
|
|
|
|
|
|
|
|
|
GDP
|
|
(5.0)
|
|
3.8
|
|
3.7
|
|
2.2
|
Interest rate
|
|
0.26
|
|
1.03
|
|
1.08
|
|
0.79
|
Unemployment rate
|
|
5.9
|
|
5.0
|
|
4.3
|
|
5.0
|
House price growth
|
|
(2.2)
|
|
6.8
|
|
6.8
|
|
11.6
|
Commercial real estate price growth
|
|
(11.9)
|
|
8.9
|
|
6.0
|
|
1.7
|
|
|
|
|
|
|
|
|
|
Downside
|
|
|
|
|
|
|
|
|
GDP
|
|
(6.5)
|
|
1.8
|
|
3.6
|
|
(1.4)
|
Interest rate
|
|
0.00
|
|
0.03
|
|
0.06
|
|
0.03
|
Unemployment rate
|
|
6.3
|
|
6.7
|
|
6.4
|
|
6.5
|
House price growth
|
|
(7.6)
|
|
(4.1)
|
|
(5.3)
|
|
(16.1)
|
Commercial real estate price growth
|
|
(26.6)
|
|
(3.3)
|
|
2.1
|
|
(27.5)
|
|
|
|
|
|
|
|
|
|
Severe downside
|
|
|
|
|
|
|
|
|
GDP
|
|
(7.8)
|
|
(0.1)
|
|
3.1
|
|
(5.1)
|
Interest rate
|
|
0.00
|
|
0.00
|
|
0.00
|
|
0.00
|
Unemployment rate
|
|
6.7
|
|
8.0
|
|
8.0
|
|
7.6
|
House price growth
|
|
(10.0)
|
|
(10.9)
|
|
(12.9)
|
|
(30.2)
|
Commercial real estate price growth
|
|
(39.2)
|
|
(5.7)
|
|
3.8
|
|
(40.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Probability-
|
|
|
|
|
|
|
|
Severe
|
|
|
weighted
|
|
Upside
|
|
Base case
|
|
Downside
|
|
downside
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
Underlying basis
|
|
|
|
|
|
|
|
|
|
|
UK Mortgages
|
|
1,345
|
|
1,025
|
|
1,211
|
|
1,457
|
|
2,372
|
Other Retail
|
|
1,987
|
|
1,870
|
|
1,947
|
|
2,046
|
|
2,284
|
Commercial Banking
|
|
1,826
|
|
1,646
|
|
1,731
|
|
1,940
|
|
2,308
|
Other
|
|
40
|
|
40
|
|
40
|
|
40
|
|
40
|
At 31 March 2020
|
|
5,198
|
|
4,581
|
|
4,929
|
|
5,483
|
|
7,004
|
|
|
|
|
|
|
|
|
|
|
|
Underlying basis
|
|
|
|
|
|
|
|
|
|
|
UK Mortgages
|
|
1,216
|
|
964
|
|
1,111
|
|
1,300
|
|
2,036
|
Other Retail
|
|
1,580
|
|
1,502
|
|
1,551
|
|
1,623
|
|
1,771
|
Commercial Banking
|
|
1,315
|
|
1,211
|
|
1,258
|
|
1,382
|
|
1,597
|
Other
|
|
50
|
|
50
|
|
50
|
|
50
|
|
50
|
At 31 December 2019
|
|
4,161
|
|
3,727
|
|
3,970
|
|
4,355
|
|
5,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Of which -
|
|
|
|
|
|
|
|
|
Net AQR
|
|
coronavirus
|
|
Of which
|
|
Net AQR
|
|
|
|
|
Q1 2020
|
|
ECL
|
|
underlying
|
|
Q1 2019
|
|
Increase
|
|
|
bps
|
|
bps
|
|
bps
|
|
bps
|
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
104
|
|
66
|
|
38
|
|
36
|
|
68
|
Mortgages
|
|
22
|
|
24
|
|
(2)
|
|
–
|
|
22
|
Other
|
|
531
|
|
287
|
|
244
|
|
228
|
|
303
|
Commercial Banking
|
|
232
|
|
210
|
|
22
|
|
1
|
|
231
|
Total
|
|
130
|
|
97
|
|
33
|
|
25
|
|
105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mar 2020
|
|
Net ECL
|
|
Write-offs
|
|
P&L
|
|
Dec 2019
|
|
|
ECL
|
|
increase
|
|
and other
|
|
charge
|
|
ECL
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
3,332
|
|
536
|
|
(353)
|
|
889
|
|
2,796
|
Mortgages
|
|
1,345
|
|
129
|
|
(31)
|
|
160
|
|
1,216
|
Other
|
|
1,987
|
|
407
|
|
(322)
|
|
729
|
|
1,580
|
Commercial Banking
|
|
1,826
|
|
511
|
|
(39)
|
|
550
|
|
1,315
|
Other
|
|
40
|
|
(10)
|
|
(1)
|
|
(9)
|
|
50
|
Total
|
|
5,198
|
|
1,037
|
|
(393)
|
|
1,430
|
|
4,161
|
|
|
|
|
|
|
|
|
|
|
|
Coverage
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
1.03%
|
|
|
|
|
|
|
|
0.83%
|
Stage
3
|
|
25.0%
|
|
|
|
|
|
|
|
22.5%
|
|
|
|
|
|
|
|
Drawn
|
|
Undrawn
|
|
|
£bn
|
|
£bn
|
|
|
|
|
|
Retail non-food
|
|
2.6
|
|
1.2
|
Automotive dealerships
|
|
2.3
|
|
1.3
|
Oil and gas
|
|
1.3
|
|
2.2
|
Construction
|
|
1.2
|
|
1.6
|
Hotels
|
|
1.8
|
|
0.3
|
Passenger transport
|
|
1.2
|
|
0.5
|
Leisure
|
|
0.8
|
|
0.5
|
Restaurants and bars
|
|
0.7
|
|
0.5
|
|
|
1
|
Lending
classified using ONS SIC codes at legal entity level.
|
|
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 2020.
|
Statutory basis: Statutory profit before
tax and statutory profit after tax are included on pages 2 and 3.
However, a number of factors have had a significant effect on the
comparability of the Group’s financial position and results.
Accordingly, the results are also presented on an underlying
basis.
|
Underlying basis: The statutory results
are adjusted for certain items which are listed below, to allow a
comparison of the Group’s underlying
performance.
- restructuring,
including severance-related costs, the rationalisation of the
non-branch property portfolio, the establishment of the Schroders
partnership, the integration of MBNA and Zurich’s UK
workplace pensions and savings business;
- volatility and
other items, which includes the effects of certain asset sales, the
volatility relating to the Group’s hedging arrangements and
that arising in the insurance businesses, insurance gross up, the
unwind of acquisition-related fair value adjustments and the
amortisation of purchased intangible assets;
-payment protection
insurance provisions.
|
Unless
otherwise stated, income statement commentaries throughout this
document compare the three months ended 31 March 2020 to the
three months ended 31 March 2019, and the balance sheet
analysis compares the Group balance sheet as at 31 March 2020
to the Group balance sheet as at 31 December
2019.
|
Alternative performance measures: The
Group uses a number of alternative performance measures, including
underlying profit, in the discussion of its business performance
and financial position. There have been no changes to the
definitions used by the Group; further information on these
measures is set out on page 331 of the Group’s 2019 Annual
Report and Accounts.
Capital: Capital and leverage ratios
reported as at 31 March 2020 incorporate profits for the quarter
that remain subject to formal verification in accordance with the
Capital Requirements Regulation. The Q1 2020 Interim Pillar 3
Report can be found at: http://www.lloydsbankinggroup.com/investors/financial-performance/
|