Lloyds Banking Group plc · LSE:LLOY

Lloyds Banking — Investor Presentation (March 2009)

15 slides from Lloyds Banking's investor presentation, Mar 7, 2009

  1. Slide 1: Asset Protection Scheme

    Asset Protection Scheme 7 March 2009 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN TO CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA OR ANY STATE OR JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO

  2. Slide 2: Asset Protection Scheme – Significantly de-risked Group

    Asset Protection Scheme – Significantly de-risked Group ƒ Significant risk transfer away from shareholders ƒ Substantial increase in the Group’s capital base ƒ Exposure to higher risk and ‘outside appetite’ portfolios significantly mitigated ƒ £14 billion additional lending support to personal and b

  3. Slide 3: Asset Protection Scheme – Key details

    Asset Protection Scheme – Key details ƒ De-risks up to £260 billion Group assets (expected to be £250 billion net of impairments) ƒ Approximately £194 billion risk-weighted asset relief (a reduction of c.39 per cent) ƒ Increases pro-forma adjusted* core tier 1 capital ratio by 810 basis points, to 1

  4. Slide 4: APS portfolio – A rigorous selection process

    APS portfolio – A rigorous selection process Following a rigorous process of stress testing and risk criteria prioritisation, a portfolio of up to £260 billion has been identified for inclusion in APS £1.1tn APS portfolio: ƒ Assets outside Lloyds risk appetite ƒ High concentration risk assets ƒ High

  5. Slide 5: APS portfolio – £260 billion assets covered

    APS portfolio – £260 billion assets covered The initial portfolio comprises the following asset classes: £bn Retail – mortgages 74 Retail – unsecured personal loans 18 Corporate/Commercial* 151 Treasury Assets 17 Total 260 ƒ Assets predominantly represent higher risk and concentrated portfolios ƒ Fi

  6. Slide 6: Post-APS balance sheet

    Post-APS balance sheet Of the £260 billion portfolio, a significant proportion (c.83%) of the assets included are legacy HBOS assets, reflecting the higher relative risk of the HBOS portfolio £1.1tn Residual balance sheet: 39% 45% ƒ Assets are more equally distributed across the two legacy organisat

  7. Slide 7: Preference share conversion

    Preference share conversion ƒ £4 billion HMT preference shares to be replaced by ordinary shares ƒ Issue price of 38.43p per ordinary share (8.5% discount to 6 March close, 10.4 billion ordinary shares issued) ƒ Eligible shareholders can subscribe pro-rata to their existing holdings at 38.43p per sh

  8. Slide 8: A significantly de-risked and improved capital position

    A significantly de-risked and improved capital position At 31 December 2008 Before* After* Change Risk-weighted assets (£bn) 498 304 (39%) Core tier 1 capital (£bn)† 32.1 44.0 37% Core tier 1 capital ratio (%)† 6.4 14.5 +810bps Tier 1 capital (£bn) 48.8 56.7 16% Tier 1 capital ratio (%) 9.8 18.7 +89

  9. Slide 9: Lending commitments and other issues

    Lending commitments and other issues ƒ Commitments to extend a total of £14 billion lending to creditworthy borrowers in a commercial manner, within our current lending criteria – £3 billion for mortgage lending – £11 billion for business lending ƒ No agreement to restrict the utilisation of tax los

  10. Slide 10: APS – B shares, terms and conditions

    APS – B shares, terms and conditions ƒ Qualifies as core tier 1 equity ƒ Non-voting, non-cumulative, B share dividend must be paid before any ordinary dividend can be declared ƒ Discretionary B share dividend of the higher of 7 per cent and 125 per cent of dividends paid on ordinary shares; scrip op

  11. Slide 11: A comparison with RBS

    A comparison with RBS £bn LBG RBS Covered assets 260 325 Expected net risk-weighted asset relief 194 144 First loss (net of existing provisions) 25 19.5 Second loss sharing (company/HMT) 10% / 90% 10 % / 90% Participation fee (B shares) 15.6 6.5 Tax losses given up None 4.6 Overall cost / RWA relief

  12. Slide 12: Asset Protection Scheme – Summary

    Asset Protection Scheme – Summary ƒ Significantly improves and de-risks capital position ƒ Substantially reduces risk profile of enlarged Group’s balance sheet ƒ Provides greater capacity to support customer lending ƒ De-risks non-core assets, to enable greater focus on core businesses 12

  13. Slide 13: Disclaimer

    Disclaimer This presentation does not constitute an offer to sell, or a solicitation of an offer to subscribe for, the securities being issued in any jurisdiction in which such offer or solicitation is unlawful. This presentation is not for distribution, directly or indirectly, in or into Australia,

  14. Slide 14: Disclaimer

    Disclaimer Examples of such forward looking statements include, but are not limited to, projections or expectations of the Group’s future financial position including profit attributable to shareholders, provisions, economic profit, dividends, capital structure, expenditures or any other financial i

  15. Slide 15: Asset Protection Scheme

    Asset Protection Scheme 7 March 2009 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN TO CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA OR ANY STATE OR JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO

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