Lloyds Banking Group plc · LSE:LLOY
Lloyds Banking — Goldman Sachs Financials Conference 2016
19 slides from Lloyds Banking's conference presentation, Jun 9, 2016
Slide 1: Goldman Sachs Financials Conference
TITLE SLIDE IS IN GOLDMAN SACHS FINANCIALS CONFERENCE SENTENCE CASE. George Culmer, Chief Financial Officer GREEN BACKGROUND. Andrew Bester, Chief Executive Officer, Commercial Banking 00 Month 0000 9 June 2016 Presenters Name
Slide 2: Agenda
AGENDA George Culmer Our differentiated business model Chief Financial Officer Andrew Bester Commercial Banking update Chief Executive Officer, Commercial Banking 1
Slide 3: A UK focused, multi branded, retail and commercial bank, with market leading distribution
A UK FOCUSED, MULTI BRANDED, RETAIL AND COMMERCIAL BANK, WITH MARKET LEADING DISTRIBUTION Lloyds Bank Bank of Scotland Simple, UK focused retail and commercial bank Multi-brand and multi-channel distribution Low risk and low cost business model Halifax Scottish Widows provides competitive advantage
Slide 4: Low risk business model provides security and positions us well
LOW RISK BUSINESS MODEL PROVIDES SECURITY AND POSITIONS US WELL Impaired loan ratio & coverage (%) 56.4 46.9 48.2 50.1 46.1 • Impaired loan ratio improved significantly; coverage 44.6 remains high at 46% 41.0 39.3 43.0 10.1 8.6 6.3 2.9 2.1 • Group asset quality ratio of 14bps: expected to be Dec 201
Slide 5: Market leading cost position providing competitive advantage
MARKET LEADING COST POSITION PROVIDING COMPETITIVE ADVANTAGE Cost base(1) (£bn) • Cost base reduced by c.£2bn over last 5 years, whilst (17)% significantly increasing NPS scores (up 50%) 11.1 10.6 10.1 9.6 9.4 9.2 • Simplification programme ahead of target in delivering £1bn run-rate savings by end
Slide 6: Our differentiated business model enables us to react effectively to the evolving operating environment
OUR DIFFERENTIATED BUSINESS MODEL ENABLES US TO REACT EFFECTIVELY TO THE EVOLVING OPERATING ENVIRONMENT Market trends LBG business model • Expect full service proposition • Leading multi-channel approach Customer • Increased digital adoption • UK’s largest digital bank • Simple, UK focused, multi-br
Slide 7: We are making good progress against our strategic priorities
WE ARE MAKING GOOD PROGRESS AGAINST OUR STRATEGIC PRIORITIES Creating the best Becoming simpler and Delivering sustainable customer experience more efficient growth • Integrated multi-channel • Cost leadership with continued • Growth in targeted areas strategy reductions in cost:income ratio – SME l
Slide 8: Financial performance – first three months of 2016
FINANCIAL PERFORMANCE – FIRST THREE MONTHS OF 2016 Robust financial performance in a challenging operating environment £4.4bn • Underlying profit stable at £2.1bn with an underlying return on required Income equity of 13.8% (1)% – Income decreased 1%; 3% improvement in NII reflecting a margin of £(2
Slide 9: Delivering superior and sustainable returns
DELIVERING SUPERIOR AND SUSTAINABLE RETURNS Underlying profit and returns significantly improved with strong capital generation Underlying profit (£m) and RoRE (%) 2015 underlying profit by division (£bn) Other 8,112 Consumer Finance 7,756 Commercial 6,166 15.0 1.0 Banking 13.6 2.4 Insurance 9.7 1.0
Slide 10: Summary – becoming the best bank for our customers and shareholders while supporting the UK economy
SUMMARY – BECOMING THE BEST BANK FOR OUR CUSTOMERS AND SHAREHOLDERS WHILE SUPPORTING THE UK ECONOMY Best bank for customers • The Group has a clear strategic focus and a differentiated business model • Delivering the best customer experience • Successful delivery of strategy has transformed the busi
Slide 11: Agenda
AGENDA George Culmer Our differentiated business model Chief Financial Officer Andrew Bester Commercial Banking update Chief Executive Officer, Commercial Banking 10
Slide 12: Commercial Banking: building strongly on a proud heritage
COMMERCIAL BANKING Building strongly on a proud heritage Relationships with over 80% of the Network of 4,500 client-facing FTSE 100 staff Our Global Corporate clients account for 500 business centres in the UK >55% of UK employment 103k SME clients, 4,300 MM 103k start-ups supported in 2015
Slide 13: Continuity in vision and strategy; fully aligned to Group priorities
COMMERCIAL BANKING Continuity in vision and strategy; fully aligned to Group priorities Our vision Our strategic priorities Our objective Becoming Creating the simpler and best client more efficient experience Best Bank for Clients Delivering Building the sustainable best team growth 12
Slide 14: A critical component and driver of growth for the Group
COMMERCIAL BANKING A critical component and driver of growth for the Group 2015 contribution 2% to Group Consecutive years of Income 4,372 4,436 4,576 income growth 30% £m PBT 2013 2014 2015 70% L&A 78% 22% PBT £m 1,890 2,206 2,431 Market leading cost: income ratio 2013 2014 2015 124.0 30% RWA
Slide 15: Meeting client needs via a holistic, low-risk, client-centric model
COMMERCIAL BANKING Meeting client needs via a holistic, low-risk, client-centric model 29% 19% 26% 26% Share of 2015 Core SME Mid-Markets Global Corporates Financial Institutions Client Income M&A Equity Derivatives Investment ECM Prime Brokerage Banking Secondary Equities Investing in Sca
Slide 16: We have made good progress against our strategic priorities
COMMERCIAL BANKING We have made good progress against our strategic priorities Enhance front line Maintain capital Deliver growth in Invest in critical capacity via discipline & increase key segments & scalable simplification & balance sheet geographies infrastructure digital investments velocity
Slide 17: Digital strategy – putting clients and colleagues at the centre of everything we do
COMMERCIAL BANKING Digital strategy – putting clients and colleagues at the centre of everything we do Better engagement & connectivity Single point of access to all banking needs Better engagement & connectivity Day-to-day needs serviced digitally Simple, quick onboarding Instant & transparen
Slide 18: We aim to deliver sustainable returns above the cost of equity
COMMERCIAL BANKING We aim to deliver sustainable returns above the cost of equity Transformed, delivering improving returns Core client franchise income growth despite market volatility and Income uncertainty Growth Strategic investments in product & digital capability Collaborate with Group p
Slide 19: Forward looking statement and basis of presentation
FORWARD LOOKING STATEMENT AND BASIS OF PRESENTATION FORWARD LOOKING STATEMENTS This document contains certain forward looking statements with respect to the business, strategy and plans of Lloyds Banking Group and its current goals and expectations relating to its future financial condition and perf
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