INCOME STATEMENT

2010 2011 2012 2013 2014

Interest and similar income 29,340 26,316 23,548 21,163 19,211
Interest and similar expense 16,794 13,618 15,830 13,825 8,551
Net interest income 12,546 12,698 7,718 7,338 10,660
Fee and commission income 4,992 4,935 4,650 4,119 3,659
Fee and commision expense 1,682 1,391 1,444 1,385 1,402
Net fee and commission income 3,310 3,544 3,206 2,734 2,257
Net trading income 15,724 (368) 15,005 16,467 10,159
Insurance premium income 8,148 8,170 8,284 8,197 7,125
Other operating income 4,228 2,799 4,700 3,249 (309)
Other income 31,410 14,145 31,195 30,647 19,232
Total income 43,956 26,843 38,913 37,985 29,892
Insurance claims 19,088 6,041 18,396 19,507 13,493
Total income, net of insurance claims 24,868 20,802 20,517 18,478 16,399

Regulatory provisions 500 3,375 4,175 3,455 3,125

Other oprating expenses 12,770 13,084 11,799 11,867 10,760
Total operating expenses 13,270 16,459 15,974 15,322 13,885
Trading surplus 11,598 4,343 4,543 3,156 2,514
Impairment 10,952 8,094 5,149 2,741 752
Gain/(loss) on disposal of business - 365
Profit before tax 281 (3,751) (606) 415 1,762
Tax 539 (861) 781 1,217 263
Profit/loss for the year (258) (2,890) (1,387) (802) 1,499
Profit attributable to ordinary shareholders (320) (2,963) (1,471) (838) 1,125
Profit attributable to other equity shareholders 287
Profit attributable to equity holders (320) (2,963) (1,471) (838) 1,412
Profit attributable to non-controlling interest 62 73 84 36 87
Profit/loss for the year (258) (2,890) (1,387) (802) 1,499

Basic EPS -0.5 -4.3 -2.1 -1.2 1.7

Diluted EPS -0.5 -4.3 -2.1 -1.2 1.6

Underlying NII 14,143 12,233 10,331 10,884 10,975

Underlying other income 9,936 9,307 8,055 7,921 6,467
Underlying total income (net of insurance claims) 24,079 21,540 18,386 18,805 17,442
Underlying profit 429 2,565 6,166 7,756
PPI provision 3,200 3,575 3,050 2,200
PPI and other conduct provision 3,455 3,125

BALANCE SHEET
2010 2011 2012 2013 2014
Cash at central banks 38,115 60,722 80,298 49,915 50,492
Item in the course of collection from banks 1,368 1,408 1,256 1,007 1,173
Trading & other financial assets at fair value through prof 156,191 139,510 160,620 142,683 151,931
Derivative financial instruments 50,777 66,013 56,557 30,804 36,128
Loans and receivables 648,604 610,714 555,255 519,672 510,072
Loans and advances to banks 30,272 32,606 32,757 25,365 26,155
Loans and advances to customers 592,597 565,638 517,225 492,952 482,704
Debt securities 25,735 12,470 5,273 1,355 1,213

Available-for-sale financial assets 42,955 37,406 31,374 43,976 56,493

Held-to-maturity investments 7,905 8,098 - -
Goodwill 2,016 2,016 2,016 2,016 2,016
Value of in-force business 7,367 6,638 6,800 5,335 4,864
Other intangible assets 3,496 3,196 2,792 2,279 2,070
PP&E 14,187 13,795 12,747 12,434 12,544
Current tax recoverable 621 434 354 31 127
Deferred tax assets 4,164 4,496 4,913 5,104 4,145
Retirement benefit assets 736 1,338 741 98 1,147
Other assets 13,072 14,762 18,498 27,026 21,694
Total assets 991,574 970,546 934,221 842,380 854,896

Deposits from banks 50,363 39,810 38,405 13,982 10,887

Customer deposits 393,633 413,906 426,912 439,467 447,067
Items in course of transmission to banks 802 844 996 774 979
Trading & other financial liabilities at fair value through p 26,762 24,955 33,392 43,625 62,102
Derivative financial instruments 42,158 58,212 48,676 27,658 33,187
Notes in circulation 1,074 1,145 1,198 1,176 1,129
Debt securities issue 228,866 185,059 117,253 87,102 76,233
Liabilities arising from insurance contracts and particip 80,729 78,991 82,953 82,777 86,918
Liabilities arising from non-participating investment cont 51,363 49,636 54,372 27,590 27,248
Other liabilities 30,339 32,341 47,060 40,847 28,425
Retirement benefit obligations 423 381 1,905 1,096 453
Current tax liabilities 149 103 138 147 69
Deferred tax liabilities 247 314 327 3 54
Other provisions 1,532 3,166 3,961 4,488 4,200
Subordinated liabilities 36,232 35,089 34,092 32,312 26,042
Total liabilities 944,672 923,952 891,640 803,044 804,993

Share capital 6,815 6,881 7,042 7,145 7,146

Share premium 16,291 16,541 16,872 17,279 17,281
Other reserves 11,575 13,818 12,902 10,477 13,216
Retained profits 11,380 8,680 5,080 4,088 5,692
Shareholders' equity 46,061 45,920 41,896 38,989 43,335
Other equity instruments - - 5,355
Total equity excluding non-controlling interest 46,061 45,920 41,896 38,989 48,690
Non-controlling interests 841 674 685 347 1,213
Total equity 46,902 46,594 42,581 39,336 49,903
Total equity and liabilities 991,574 970,546 934,221 842,380 854,896

Check - - - - -

CASHFLOW STATEMENT
2010 2011 2012 2013 2014
Profit before tax 281 - 3,751 - 606 415 1,762
Adjustments:
Change in operating assets 31,860 44,097 47,805 20,383 - 872
Change in operating liabilities - 45,683 - 19,187 - 46,153 - 47,687 11,992
Non-cash and other items 11,173 - 1,130 2,081 11,382 - 2,496
Tax paid 332 - 136 - 78 - 24 - 33
CFO - 2,037 19,893 3,049 - 15,531 10,353

Purchase of financial assets - 46,890 - 28,995 - 22,050 - 36,959 - 11,533

Proceeds from sale and maturity of financial assets 45,999 36,523 37,664 21,552 4,668
Purchase of fixed assets - 3,216 - 3,095 - 3,003 - 2,982 - 3,442
Proceeds from sale of fixed assets 1,354 2,214 2,595 2,090 2,043
Acquisition of businesses, net of cash acquired - 73 - 13 - 11 - 6 - 1
Disposal of businesses, net of cash disposed 428 298 37 696 543
CFI - 2,398 6,932 15,232 - 15,609 - 7,722

Dividends paid to ordinary shareholders - - -

Distributions on other equity instruments - - - 287
Dividends paid to non-controlling interests - 47 - 50 - 56 - 25 - 27
Interest paid on subordinated liabilities - 1,942 - 2,126 - 2,577 - 2,451 - 2,205
Proceeds from issue of subordinated liabilites 3,237 1,500 629
Proceeds from issue of ordinary shares - 170 350 3
Repayment of subordinated liabilities - 684 - 1,074 - 664 - 2,442 - 3,023
Changes in non-controlling interests 2 8 23 - 635
CFF 566 - 3,242 - 3,104 - 3,068 - 4,275

Effects of exchange rate changes on cash and cash equ 479 6 - 8 - 53 - 6

Change in cash and cash equivalents - 3,390 23,589 15,169 - 34,261 - 1,650
Cash and cash equivalents at beginning of year 65,690 62,300 85,889 101,058 66,797
Cash and cash equivalents at end of year 62,300 85,889 101,058 66,797 65,147
 2015 CAGR
17,615 -10%
6,297 -18%
11,318 -2%
3,252 -8%
1,442 -3%
1,810 -11%
3,714 -25%
4,792 -10%
1,516 -19%
11,832 -18%
23,150 -12%
5,729 -21%
17,421 -7%

4,837 57%
10,550 -4%
15,387 3%
2,034 -29%
390 -49% -96%
-100%
1,644 42%
688 5%
956 -230%
466 -208%
394 #DIV/0!
860 -222%
96 9%
956 -230%
#DIV/0!
0.8 -210%
0.8 -210%

11,482 -4%
6,155 -9%
17,637 -6%
8,112 109% 4.6%
4,000 16,025 Enough to cover to mid 2018
4,837

2015
58,417 9% 53%
697 -13% -49%
140,536 -2% -10%
29,467 -10% -42%
484,483 -6% -25%
25,117 -4% -17%
455,175 -5% -23%
4,191 -30% -84%
#DIV/0! #DIV/0!
33,032 -5% -23%
19,808 20% 151%
2,016 0% 0%
4,596 -9% -38%
 1,838 -12% -47%
12,979 -2% -9%
44 -41% -93%
4,010 -1% -4%
901 4% 22%
13,864 1% 6%
806,688 -4% -19%
#DIV/0!
16,925 -20%
418,326 1%
717 -2%
51,863 14%
26,301 -9%
1,112 1%
82,056 -19%
80,294 0% -22%
22,777 -15%
29,661 0%
365 -3%
279 13%
33 -33%
5,687 30%
23,312 -8%
759,708 -4%
#DIV/0!
7,146 1%
17,412 1%
12,260 1%
4,416 -17%
41,234 -2%
5,355 #DIV/0!
46,589 0%
391 -14%
46,980 0%
806,688 -4%

2015
1,644

34,700
- 11,985
- 7,808
- 179
16,372

- 19,354
22,000
- 3,417
1,537
- 5
- 4,071
- 3,310

- 1,070
- 394
- 52
- 1,840
338
-
- 3,199
- 41
- 6,258

2
6,806
65,147
71,953
Lloyds Profit and Loss Account (£ million)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Interest received 29,340 26,316 23,548 21,163 19,211 17,615 16,423 15,428 16,219 17,111 18,075
Interest paid (16,794) (13,618) (15,830) (13,825) (8,551) (6,297) (4,744) (3,229) (3,271) (3,321) (3,380)
Net interest income 12,546 12,698 7,718 7,338 10,660 11,318 11,679 12,199 12,948 13,790 14,695
Commissions received 4,992 4,935 4,650 4,119 3,659 3,252 3,350 3,450 3,554 3,660 3,770
Commissions paid (1,682) (1,391) (1,444) (1,385) (1,402) (1,442) (1,485) (1,530) (1,576) (1,623) (1,672)
Net commission income 3,310 3,544 3,206 2,734 2,257 1,810 1,864 1,920 1,978 2,037 2,098
Insurance premium income 8,148 8,170 8,284 8,197 7,125 4,792 4,479 4,479 4,479 4,479 4,479
Trading profit 15,724 (368) 15,005 16,467 10,159 3,714 3,825 3,940 4,058 4,180 4,306
Other income 4228 2799 4700 3249 (309) 1,516 2,137 2,180 2,223 2,268 2,313
Insurance claims (19,088) (6,041) (18,396) (19,507) (13,493) (5,729) (4,903) (4,999) (5,253) (5,230) (5,334)
Total income 24,868 20,802 20,517 18,478 16,399 17,421 19,083 19,719 20,434 21,525 22,557
Operating expenses (12,770) (13,084) (11,799) (11,867) (10,760) (10,550) (11,450) (11,634) (11,851) (12,269) (12,632)
Regulatory provision (500) (3,375) (4,175) (3,455) (3,125) (4,837) (2,500) (2,500) (3,500) (3,500) (1,500)
Provisions for possible loan losses (10,952) (8,094) (5,149) (2,741) (752) (390) (454) (903) (2,268) (2,749) (3,255)
Profit before exceptional items 646 (3,751) (606) 415 1,762 1,644 4,679 4,682 2,814 3,007 5,170
Exceptional items (365) 0 0 0 0 0 - - - - -
Restructuring expenses - - - - -
Profit before taxation 281 (3,751) (606) 415 1,762 1,644 4,679 4,682 2,814 3,007 5,170
Taxation (539) 861 (781) (1,217) (263) (688) (1,263) (1,264) (760) (812) (1,396)
Taxation rate (%) 191.8% 23.0% -128.9% 293.3% 14.9% 41.8% 27.0% 27.0% 27.0% 27.0% 27.0%
Profit after taxation (258) (2,890) (1,387) (802) 1,499 956 3,416 3,418 2,054 2,195 3,774
Minority interest in profit (62) (73) (84) (36) (87) (96) (29) (30) (19) (21) (37)
Profit attributable to ordinary shares (320) (2,963) (1,471) (838) 1,412 860 3,387 3,388 2,035 2,174 3,737
Transfer from capital reserve 0 0 0 0 0
Consolidated profit/loss 1,412 860 3,387 3,388 2,035 2,174 3,737
Ordinary dividends payable (1,963) (2,061) (2,164) (2,272) (1,150) (1,867)
Retained profit/loss 1,412 (1,103) 1,326 1,224 (237) 1,024 1,870
Payout ratio 0.0% 228.2% 70.0% 70.0% 70.0% 70.0% 70.0%

Year end shares outstanding 71,368 71,374 71,374 71,374 71,374 71,374 71,374 71,374
Weighted average shares outstanding diluted 71,009 72,447 72,340 71,374 71,374 71,374 71,374 71,374
Earnings per share -1.18 1.95 1.19 4.75 4.75 2.85 3.05 5.24
Dividends per share (p) - - - - 0.75 2.75 2.89 3.03 3.18 1.61 2.62

4,293 5,539 5,600 5,507 5,697 5,764

394%
Balance sheet

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Assets

Cash at central banks 38,115 60,722 80,298 49,915 50,492 58,417 60,170 61,975 63,834 65,749 67,721
Total loans and receivables 648,604 610,714 555,255 519,672 510,072 484,483 479,459 476,806 476,917 479,774 483,484
Loans and advances to banks 30,272 32,606 32,757 25,365 26,155 25,117 24,363 23,633 22,924 22,236 21,569
Loans and advances to customers 610,970 584,370 532,475 504,918 489,118 458,208 453,626 451,358 453,615 458,151 465,023
Provisions for loan losses (18,373) (18,732) (15,250) (11,966) (6,414) (3,033) (2,722) (2,375) (3,812) (4,804) (7,299)
Debt securities 25,735 12,470 5,273 1,355 1,213 4,191 4,191 4,191 4,191 4,191 4,191
Derivatives 50,777 66,013 56,557 30,804 36,128 29,467 29,467 29,467 29,762 30,059 30,360
Trading securities 156,191 139,510 160,620 142,683 151,931 140,536 140,536 140,536 141,941 143,361 144,794
Available for sale securities 42,955 37,406 31,374 43,976 56,493 33,032 33,693 34,366 35,054 35,755 36,470
Held-to-maturity securities 7,905 8,098 0 0 0 19,808 19,808 19,808 19,808 19,808 19,808
Goodwill 2,016 2,016 2,016 2,016 2,016 2,016 2,016 2,016 2,016 2,016 2,016
Value of in-force business 7,367 6,638 6,800 5,335 4,864 4,596 4,458 4,324 4,195 4,069 3,947
Other intangible assets 3,496 3,196 2,792 2,279 2,070 1,838 1,838 1,838 1,838 1,838 1,838
Fixed assets 14,187 13,795 12,747 12,434 12,544 12,979 12,979 12,979 12,979 12,979 12,979
Tax assets 4,785 4,930 5,267 5,135 4,272 4,054 4,054 4,054 4,054 4,054 4,054
Other assets 15,176 17,508 20,495 28,131 24,014 15,462 15,771 16,087 16,408 16,737 17,071
Total assets 991,574 970,546 934,221 842,380 854,896 806,688 804,248 804,257 808,806 816,198 824,543

Liabilities

Liabilities to banks 50,363 39,810 38,405 13,982 10,887 16,925 17,433 17,956 18,494 19,049 19,621
Liabilities to customers 393,633 413,906 426,912 439,467 447,067 418,326 424,601 430,970 439,589 448,381 459,591
Debt securities in issue 228,866 185,059 117,253 87,102 76,233 82,056 77,953 74,056 70,353 66,835 63,493
Derivatives 42,158 58,212 48,676 27,658 33,187 26,301 26,301 26,301 26,301 26,301 26,301
Trading liabilities 26,762 24,955 33,392 43,625 62,102 51,863 54,456 57,179 60,038 63,040 66,192
Insurance liabilities 132,092 128,627 137,325 110,367 114,166 103,071 99,979 96,980 94,070 91,248 88,511
Provisions 1,532 3,166 3,961 4,488 4,200 5,687 5,858 6,033 6,214 6,401 6,593
Tax liabilities 396 417 465 150 123 312 321 331 341 351 362
Other liabilities 32,638 34,711 51,159 43,893 30,986 31,855 25,000 20,131 18,560 17,938 14,531
Subordinated capital 36,232 35,089 34,092 32,312 26,042 23,312 24,011 24,732 25,474 26,238 27,025
Minority interests
Total liabilities 944,672 923,952 891,640 803,044 804,993 759,708 755,913 754,668 759,435 765,782 772,219
Subscribed capital 23,106 23,422 23,914 24,424 24,427 24,558 24,558 24,558 24,558 24,558 24,558
Capital reserve 11,575 13,818 12,902 10,477 13,216 12,260 12,260 12,260 12,260 12,260 12,260
Retained earnings 11,380 8,680 5,080 4,088 5,692 4,416 5,742 6,966 6,730 7,754 9,624
Other equity instrument 0 0 0 0 5,355 5,355 5,355 5,355 5,355 5,355 5,355
Measurement of cash flow hedges
Reserve from currency translation
Consolidated profit/loss
Treasury stock
Shareholders funds 46,061 45,920 41,896 38,989 48,690 46,589 47,915 49,139 48,903 49,927 51,797
Minority interests 841 674 685 347 1,213 391 420 450 468 489 526
Total shareholders' equity 46,902 46,594 42,581 39,336 49,903 46,980 48,335 49,589 49,371 50,416 52,324
Total liabilities and shareholders funds 991,574 970,546 934,221 842,380 854,896 806,688 804,248 804,257 808,806 816,198 824,543

Bad debt provisions 47,915 49,139 48,903 49,927 51,797

Opening provision for loan losses 18,373 18,732 15,250 11,966 6,414 3,033 2,722 2,375 3,812 4,804
Provision for year 8,094 5,149 2,741 752 390 454 903 2,268 2,749 3,255
Amounts utilised and other changes (7,735) (8,631) (6,025) (6,304) (3,771) (751) (1,362) (1,023) (2,002) (1,135)
Closing provision for loan losses 18,373 18,732 15,250 11,966 6,414 3,033 2,736 2,262 3,620 4,559 6,924
Provisions/claims on customers (%) 3.01% 3.21% 2.86% 2.37% 1.31% 0.66% 0.60% 0.50% 0.80% 1.00% 1.50%
Annual provision/claims on customers (%) 1.79% 1.39% 0.97% 0.54% 0.15% 0.09% 0.10% 0.20% 0.50% 0.60% 0.70%

Average earning assets 456,072 893,663 858,990 805,505 771,807 757,356 737,848 736,127 738,616 745,308 754,413

222,843 223,504 224,177 226,565 228,983 231,432

40,945 41,116 41,298 41,490 41,692 41,905

160,220 158,710 157,535 156,692 156,176 155,986

37,854 31,179 26,495 25,115 24,689 21,486
Balance Sheet Drivers

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Assets

Cash at central banks 59.3% 32.2% -37.8% 1.2% 15.7% 3.0% 3.0% 3.0% 3.0% 3.0%
Loans and advances to banks 7.7% 0.5% -22.6% 3.1% -4.0% -3.0% -3.0% -3.0% -3.0% -3.0%
Loans and advances to customers -4.4% -8.9% -5.2% -3.1% -6.3% -1.0% -0.5% 0.5% 1.0% 1.5%
Provisions for loan losses 2.0% -18.6% -21.5% -46.4% -52.7% -10.3% -12.7% 60.5% 26.0% 51.9%
Derivatives 30.0% -14.3% -45.5% 17.3% -18.4% 0.0% 0.0% 1.0% 1.0% 1.0%
Trading securities -10.7% 15.1% -11.2% 6.5% -7.5% 0.0% 0.0% 1.0% 1.0% 1.0%
Available for sale securities -12.9% -16.1% 40.2% 28.5% -41.5% 2.0% 2.0% 2.0% 2.0% 2.0%
Value of in-force business -9.9% 2.4% -21.5% -8.8% -5.5% -3.0% -3.0% -3.0% -3.0% -3.0%
Goodwill 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Other intangible assets -8.6% -12.6% -18.4% -9.2% -11.2% 0.0% 0.0% 0.0% 0.0% 0.0%
Fixed assets -2.8% -7.6% -2.5% 0.9% 3.5% 0.0% 0.0% 0.0% 0.0% 0.0%
Tax assets 3.0% 6.8% -2.5% -16.8% -5.1% 0.0% 0.0% 0.0% 0.0% 0.0%
Other assets 15.4% 17.1% 37.3% -14.6% -35.6% 2.0% 2.0% 2.0% 2.0% 2.0%
Total assets -2.1% -3.7% -9.8% 1.5% -5.6% -0.3% 0.0% 0.6% 0.9% 1.0%

Liabilities

Liabilities to banks -21.0% -3.5% -63.6% -22.1% 55.5% 3.00% 3.00% 3.00% 3.00% 3.00%
Liabilities to customers 5.2% 3.1% 2.9% 1.7% -6.4% 1.50% 1.50% 2.00% 2.00% 2.50%
Debt securities in issue -19.1% -36.6% -25.7% -12.5% 7.6% -5.00% -5.00% -5.00% -5.00% -5.00%
Derivatives 38.1% -16.4% -43.2% 20.0% -20.7% 0.00% 0.00% 0.00% 0.00% 0.00%
Trading liabilities -6.8% 33.8% 30.6% 42.4% -16.5% 5.00% 5.00% 5.00% 5.00% 5.00%
Insurance liabilities -2.6% 6.8% -19.6% 3.4% -9.7% -3.00% -3.00% -3.00% -3.00% -3.00%
Provisions 106.7% 25.1% 13.3% -6.4% 35.4% 3.0% 3.00% 3.00% 3.00% 3.00%
Tax liabilities 5.3% 11.5% -67.7% -18.0% 153.7% 3.0% 3.00% 3.00% 3.00% 3.00%
Other liabilities 6.4% 47.4% -14.2% -29.4% 2.8% 3.0% 3.00% 3.00% 3.00% 3.00%
Subordinated capital -3.2% -2.8% -5.2% -19.4% -10.5% 3.0% 3.00% 3.00% 3.00% 3.00%
Minority interests -19.9% 1.6% -49.3% 249.6% -67.8% 7.3% 7.1% 4.2% 4.5% 7.6%
Total liabilities -5.6% -0.5% -0.2% 0.6% 0.8% 0.8%
Subscribed capital 0.5% 0.0% 0.0% 0.0% 0.0% 0.0%
Capital reserve -7.2% 0.0% 0.0% 0.0% 0.0% 0.0%
Retained earnings -22.4% 30.0% 21.3% -3.4% 15.2% 24.1%
Other equity instrument 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Measurement of cash flow hedges #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Reserve from currency translation #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Consolidated profit/loss na na na na na na
Treasury stock na na na na na na
Shareholders funds -4.3% 2.8% 2.6% -0.5% 2.1% 3.7%
Total liabilities and shareholders funds -5.6% -0.3% 0.0% 0.6% 0.9% 1.0%
Profit and Loss Drivers

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Interest received/average earning assets 2.94% 2.74% 2.63% 2.49% 2.33% 2.23% 2.10% 2.20% 2.30% 2.40%
Interest paid/average interest-bearing liabilities 0.95% 1.17% 1.09% 0.69% 0.52% 0.40% 0.27% 0.27% 0.27% 0.27%
2.00% 1.57% 1.54% 1.80% 1.81% 1.83% 1.83% 1.93% 2.03% 2.13%
Growth in commissions received -1.14% -5.78% -11.42% -11.17% -11.12% 3.00% 3.00% 3.00% 3.00% 3.00%
Growth in commissions paid -17.30% 3.81% -4.09% 1.23% 2.85% 3.00% 3.00% 3.00% 3.00% 3.00%

Growth in trading profit -102.34% -4177.45% 9.74% -38.31% -63.44% 3.00% 3.00% 3.00% 3.00% 3.00%
Profit on investments 6.97% 13.67% 8.62% -0.62% 3.39% 6.41% 6.41% 6.41% 6.41% 6.41%

Premium on insurance assets 6.27% 6.23% 6.62% 6.35% 4.41% 4.41% 4.41% 4.41% 4.41% 4.41%
Insurance claims - 7,983 - 7,506 - 8,495 - 7,995 - 7,999 - 8,163 - 8,052 - 8,071
Change in insurance liabilities 176 - 4,141 6,624 3,092 2,999 2,909 2,822 2,737
Total insurance claims - 7,807 - 11,647 - 1,871 - 4,903 - 4,999 - 5,253 - 5,230 - 5,334

Operating expenses/total income 63% 58% 64% 66% 61% 60% 59% 58% 57% 56%
PPI provision - 3,200 - 3,575 - 3,050 - 2,200 - 4,000 - 2,000 - 2,000 - 3,000 - 3,000 - 1,000
Other regulatory provision - 175 - 600 - 405 - 925 - 837 - 500 - 500 - 500 - 500 - 500

Minority interest in profit -10.04% 0.00% 0.88% 0.00% 0.00% 0.00%

2.00% 1.57% 1.54% 1.80% 1.81% 1.83% 1.83% 1.93% 2.03% 2.13%
 Choose 2

Case 2016 2017 2018

Loans and advance to customers 1 -2.0% -1.5% -1.0%
2 -1.0% -0.5% 0.5%
3 0.5% 1.0% 1.5%
Trading securities 1 -5% -5% -5%
2 0% 0% 1%
3 1% 1% 2%
Derivatives 1 -5% -5% -5%
2 0% 0% 1%
3 2% 2% 2%
Available for sales securities 1 1% 1% 1%
2 2% 2% 2%
3 3% 3% 3%
Held to maturity securities 1 0% 0% 0%
2 1% 1% 1%
3 2% 2% 2%
Value of in force business 1 -5% -5% -5%
2 -3% -3% -3%
3 0% 0% 0%

Customer deposits 1 1% 1% 2%
2 2% 2% 2%
3 2% 2% 3%
Trading & other financial liabilities at fair value through prof 1 3% 3% 3%
2 5% 5% 5%
3 7% 7% 7%
Derivative financial instruments 1 -5% -5% -5%
2 0% 0% 0%
3 2% 2% 2%
Debt securities issue 1 -10% -10% -10%
2 -5% -5% -5%
3 0% 0% 0%
Insurance liabilities 1 -5% -5% -5%
2 -3% -3% -3%
3 0% 0% 0%
 1 Low case
2 Base case
3 High case

2019 2020
-0.5% 0.0%
1.0% 1.5%
2.0% 2.5%
-5% -5%
1% 1%
2% 2%
-5% -5%
1% 1%
2% 2%
1% 1%
2% 2%
3% 3%
0% 0%
1% 1%
2% 2%
-5% -5%
-3% -3%
0% 0%

2% 2%
2% 3%
3% 3%
3% 3%
5% 5%
7% 7%
-5% -5%
0% 0%
2% 2%
-10% -10%
-5% -5%
0% 0%
-5% -5%
-3% -3%
0% 0%
6. Risk Weighted Assets and Capital Ratios (£ million)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total book assets 970,546 934,221 842,380 854,896 806,688 804,248 804,257 808,806 816,198 824,543
Risk weighted assets (RWA) 352,300 310,299 263,850 239,734 222,845 221,168 225,192 234,554 244,859 255,608 260,720
Risk weighted assets/total assets 36.30% 33.21% 31.32% 28.04% 27.62% 27.50% 28.00% 29.00% 30.00% 31.00%

CET1 Ratio 10.8% 12.0% 14.0% 12.8% 12.8%

Tier 1 Ratio 12.5% 13.8% 14.5% 16.5% 16.4% 16.00% 16.00% 16.00% 16.00% 16.00%
Total capital ratio 15.60% 17.30% 20.80% 22.00% 21.5%

CET1 Capital 38,048 37,236 36,939 30,686 28,524

Tier 1 Capital 44,038 42,821 38,258 39,556 36,547
Total capital 54,959 53,682 54,881 52,741 47,912
Minimum Tier 1 ratio (%) 16.00% 16.00% 16.00% 16.00% 16.00% 16.00%

Tier 1 capital
Equity capital requirement in balance sheet 45,920 41,896 38,989 48,690 46,589 45,649 46,461 48,122 49,927 51,797 52,833
Other equity instrument - - - (5,355) (5,355) (5,355) (5,355) (5,355) (5,355) (5,355) (5,462)
Intangibles (3,196) (2,792) (2,279) (2,070) (1,838) (1,838) (1,838) (1,838) (1,838) (1,838) (1,875)
Defered tax assets (4,496) (4,913) (5,104) (4,145) (4,010) (4,054) (4,054) (4,054) (4,054) (4,054) (4,135)
Preference shares 4,910 4,910 4,910 4,910 4,728 4,553 4,384 4,221 4,065 3,914 3,993
Other adjustments 900 3,720 1,742 (2,474) (3,567) (3,567) (3,567) (3,567) (3,567) (3,567) (3,639)
Tier I capital requirement 44,038 42,821 38,258 39,556 36,547 35,387 36,031 37,529 39,178 40,897 41,715

Beginning shareholders' equity 46,061 45,920 41,896 38,989 48,690 46,589 47,915 49,139 48,903 49,927 51,797
Plus: Net income 3,387 3,388 2,035 2,174 3,737 3,812
Less dividend 2,061 2,164 2,272 1,150 1,867 2,776
Ending shareholders' equity 45,920 41,896 38,989 48,690 46,589 47,915 49,139 48,903 49,927 51,797 52,833

Number of shares 71,374 71,374 71,374 71,374 71,374 71,374

Div per share 0.75 2.75 2.89 3.03 3.18 1.61 2.62 3.89
7. Equity (£ million)

2013 2014 2015

Share price (p) 53.95

Par value (p) 10.00

Equity issued
Equity bought back

Shares issued
Shares bought back

Common equity tier 1

Shareholders’ equity per balance sheet 43,335 41,234
Adjustment to retained earnings for foreseeable dividends (535) (1,427)
Deconsolidation of insurance entities1 (824) 578
Adjustment for own credit 158 67
Cash flow hedging reserve (1,139) (727)
Other adjustments 333 72
41,328 39,797
less: deductions from common equity tier 1
Goodwill and other intangible assets (1,875) (1,719)
Excess of expected losses over impairment provisions and value adjustments (565) (270)
Removal of defined benefit pension surplus (909) (721)
Securitisation deductions (211) (169)
Significant investments1 (2,546) (4,500)
Deferred tax assets (4,533) (3,874)
Common equity tier 1 capital 30,689 28,544

Additional tier 1
Other equity instruments 5355 5355
Preference shares and preferred securities2 4,910 4,728
Transitional limit and other adjustments (537) (906)
9,728 9,177
less: deductions from tier 1
Significant investments1 (859) (1,177)
Total tier 1 capital 39,558 36,544

Tier 2
Other subordinated liabilities2 21,132 18,584
Deconsolidation of instruments issued by insurance entities1 (2,522) (1,665)
Adjustments for transitional limit and non-eligible instruments (675) (52)
Amortisation and other adjustments (3,738) (3,880)
14,197 12,987
Eligible provisions 333 221
Less: deductions from tier 2
Significant investments1 (1,288) (1,756)
Total capital resources 52,800 47,996
2016 2017 2018 2019 2020

0 0 0 0 0
0 0 0 0 0

0 0 0 0 0
0 0 0 0 0
FINANCIAL RATIOS

2009 2010 2011 2012 2013

1. Profitability
Net interest margin NIM 2.21 2.07 1.93 2.12
Av yield on earning assets YOEA
Average cost of financing COF
CIR (net of insurance claims) 53 79 78 83
CIR (excluding PPI) 53 64 60 66
Pre-tax ROE 0.6 (8.1) (1.4) 1.1
ROE (0.7) (6.4) (3.5) (2.1)
Pre-tax ROA 0.0 (0.4) (0.1) 0.0
Preprovision ROA

2. Asset quality
Asset quality ratio 2.01 1.62 1.02 0.57
Impaired loans as a % of closing advances 10.3 10.1 8.6 6.3
Provisions as a % of impaired loans 45.9 46.9 48.2 50.1

3. Capital adequacy
CET1 Ratio 10.8% 12.0% 14.0%
Pro-forma CET1
Transitional tier 1 capital ratio 9.60% 11.60% 12.5% 13.8% 14.5%
Transitional total capital ratio 15.20% 15.6% 17.3% 20.8%
Equity/Asset 4.7% 4.8% 4.6% 4.7%
RWAs 406,400 352,300 310,299 263,850

4. Liquidity
Loan/Deposit Ratio (incl. corporate bonds) 151% 137% 121% 112%
Interbank borrowing to Total deposits 12.8% 9.6% 9.0% 3.2%

5. Investment
Basic EPS -0.5 -4.3 -2.1 -1.2
BVPS (VND)
Share price (year end) 25.9 47.9 78.9
P/E -6.023256 -22.80952 -65.75
P/B
DPS 0 0 0 0
Earning assets 543.3 510.9
Interest bearing liabilities
 2014 2015 2016

2.40 2.63 2.70

85 88
71 65
3.5 3.5
2.8 1.8
0.2 0.2

0.23 0.14
2.9 2.1
56.4 46.1

12.8% 12.8%
12.8% 13.0%
16.5% 16.4%
22.0% 21.5%
5.8% 5.8%
239,734 222,845

108% 109%
2.4% 4.0%

1.7 0.8

75.8 73.1
44.588235 91.375

0.75 2.75
461.1 441.9
10. Valuation (gbp million)

2016 2017 2018 2019 2020 Terminus

Current cost of equity:

Risk free rate 0.58% Yield on the 10-year UK gilt - 16/6/2016 - Bloomberg
Equity risk premium 7.59% Plus: 1% brexit: http://www.thisismoney.co.uk/money/news/article-3633662/London-stock-market-fall-20-Brexit-wiping-450bn-share-valuations.html
Beta 0.94 5-year monthly logarithmic share price return against FTSE-100 Index
Current cost of equity 7.71%

Terminus assumptions:
Assumed long term growth rate 2.00%
Assumed long term ROE 7.71%

Inputs from forecasts:

Profit after taxation 3,387 3,388 2,035 2,174 3,737 3,812
Dividend 2,061 2,164 2,272 1,150 1,867 2,824
Retained earnings 1,326 1,224 (237) 1,024 1,870
Opening shareholders' funds 46,589 47,915 49,139 48,903 49,927 51,797
Return on opening shareholders' funds 7.27% 7.07% 4.14% 4.45% 7.49% 7.71%
Cost of equity 7.71% 7.71% 7.71% 7.71% 7.71% 7.71%
Implied residual income (207) (308) (1,755) (1,599) (115) (184)
Terminal growth Terminal growth
Dividend discount model: 58.59 0.5% 1.0% 1.5% 2.0% 2.5% 0.5% 1.0% 1.5% 2.0% 2.5%
NPV five year free cash flow 7,738 18.5% 6.5% 6.5% 30% #VALUE! #VALUE! #VALUE! #VALUE!

Cost of equity

Cost of equity
NPV terminal value 34,076 81.5% 7.0% 7.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
Value of shareholders' funds 41,814 100.0% 7.7% 7.7% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
Shares issued (million) 71,374 8.5% 8.5% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
Value per share (pence) 58.59 9.0% 9.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
Share price 53.95
Premium/(discount) 9% Risk free rate Risk free rate
58.59 0.25% 0.58% 1.00% 1.50% 2.00% 0.25% 1% 1.00% 2% 2.00%
Residual income valuation: 0.80 0.80 36% #VALUE! #VALUE! #VALUE! #VALUE!
Opening shareholders' funds 46,589 0.94 0.94 #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!

Beta

Beta
PV five year residual income (3,129) 1.00 1.00 #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
PV terminal value (ex incremental investment) (1,645) 1.10 1.10 #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
PV terminal value (incremental investment) 0 1.20 1.20 #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
Value of shareholders' funds 41,814
Shares issued (million) 71,374
Value per share (pence) 58.59
Share price 53.95
Premium/(discount) 9%

Dividend 2,061 2,164 2,272 1,150 1,867 2,824

PV 7,738
PV of terminal 34,076
PV terminal value (incremental investment) 41,814
Value per share 58.59
Share price 53.95
Premium/(discount) 9%

Beginning equity 46,589 47,915 49,139 48,903 49,927 51,797

Net income 3,387 3,388 2,035 2,174 3,737 3,812
Capital charge 3,594 3,696 3,791 3,773 3,852 3,996
abnormal earnings - 207 - 308 - 1,755 - 1,599 - 115 - 184
PV of 5 year abnormal earnings - 3,129
PV of terminal value - 2,221
value of shareholders' fund 41,238
Value per share 57.78
 #NAME? 8/12/2016
Type Name PER PRICE TO BOOK VAL
LLOY Lloyds Banking Group 20.40 0.79
RBS Royal Bank of Scotland NA 0.43
HSBA HSBC 14.09 0.85
BARC Barclays NA 0.46
STAN Standard Chartered Bank NA 0.68
E:SCH Banco Santander SA 10.7 0.63
E:BBVA Banco Bilbao Vizcaya Argentaria SA 22.1 0.72
F:SGE Societe Generale 6.9 0.43
DK:DAB Danske Bank AS 14.2 1.20
I:ISP Intesa Sanpaolo SP 14.1 0.71
W:NDA Nordea Bank AB 9.9 1.11
RS:SBE Sberbank Rossii OAO 9.7 1.27
F:BNP BNP Paribas SA 8.4 0.58

Mean 12.23 0.76

Lloyds earnings 2016 3,387

EPS 2016 4.75
Value per share (pence) 58.05
Premium/(discount) 8%

Lloyds ending book value 2016 47,915

BVPS 67.13
Value per share (pence) 50.74
Premium/(discount) -6%

Value per share (Multiple method) 54.40

Premium/(discount) 1%
BOOK VALUE PER SHARE
P NUMBER OF SHARES CURRENCY Exchange rate
NA 53.95 71,373,730 £ 1
NA 196.3 11,755,500 £ 1
NA 545 19,916,140 £ 1
NA 163.4 16,915,120 £ 1
NA 656.5 3,283,154 £ 1
NA 3.842 14,434,490 E 0.86
NA 5.27 6,480,355 E 0.86
NA 32.045 807,651 E 0.86
NA 183.6 983,713 DK 0.12
NA 1.976 15,859,570 E 0.86
NA 78.55 4,049,950 SK 0.092
NA 139.45 21,586,940 UR 0.012
NA 44.675 1,246,462 E 0.86
Market cap earnings Book value 2015 Equity 1H16 Equity 2015 Earnings
38,506,127 1,888,000 48,938,000
23,076,047 NEG 53,665,224 53,431 52,907 - 1,979
108,542,963 7,705,190 127,697,604 145,114 147,268 9,680
27,639,306 NEG 60,085,448 59,810 62,854 - 394
21,553,906 NEG 31,696,921 37,107 37,346 - 1,817
47,693,287 4,457,317 75,703,630
29,370,265 1,328,971 40,792,035
22,257,812 3,225,770 51,762,353
21,673,165 1,526,279 18,060,971
26,951,119 1,911,427 37,959,322
29,267,369 2,956,300 26,366,999
36,123,585 3,724,081 28,443,768
47,889,693 5,701,154 82,568,437

480,544,644 34,424,488 683,740,711

Trailing earnings

- 2,316
7,705 USD
- 895
- 2,068 USD

1,249