2026 half year results

Lloyds Banking Group plc

2026 half year results

30 July 2026

CONTENTS

Forward-looking statements

This news release contains forward-looking statements. Further information is set out on page 100.

Alternative performance measures

The Group uses a number of alternative performance measures, including underlying profit, in the description of its business performance and financial position. These measures are labelled with a superscript 'A' throughout this document, with the exception of content on pages 1 to 2 and pages 7 to 11 which is, unless otherwise stated, presented on an underlying basis. Further information on these measures is set out on page 94.

RESULTS FOR THE HALF-YEAR

"Lloyds Banking Group continues to deliver for customers, colleagues, communities and shareholders. Our purpose of Helping Britain Prosper has never been more important. As the UK's largest financial services provider, our purpose drives our strategy and creates opportunity for people and businesses, shaping finance as a force for good.

In the first half of 2026, we delivered sustained strength in financial performance, with continued income growth, improving operating leverage, strong credit performance, growing capital generation and increasing shareholder returns.

We are successfully completing our 2022 to 2026 strategy, focusing on customer experience, pivoting the Group to growth and laying the foundations for our exciting new strategy. We have strengthened our market leadership, built our digital and AI capabilities, and enhanced our cost and capital leadership, while remaining on track to deliver our 2026 financial targets.

This ensures the Group is well placed to launch our new strategy, Accelerate 2030, from a position of strength. Building on our leadership position we will accelerate through reimagined customer experiences, increased Group connectivity, and a productivity step-change, all enabled by pioneering technology. Our strategy will allow us to unlock the next phase of growth and sustainable value creation for our shareholders."

Charlie Nunn, Group Chief Executive

Successfully delivering our purpose-driven strategy

• Successfully delivering the 2022 to 2026 strategy; growing market share in key areas, further improving our digital and AI leadership, and disciplined cost and capital optimisation

• Continuing to transform the Group, building digital engagement, modernising our infrastructure and delivering enhanced operating leverage, while tightly managing risk

• On track for £2 billion of strategic initiative income by the end of 2026, on track to deliver an 8% compound annual growth rate in underlying other income from 2021 to 2026, and have generated more than £2 billion of gross cost savings to date

• Launching Accelerate 2030 strategy; growing in core areas, innovating to deepen and diversify our propositions and further simplifying the Group

Sustained strength in financial performance1

• Statutory profit before tax of £4.3 billion (half-year to 30 June 2025: £3.5 billion) benefitting from higher total income and controlled costs, partially offset by higher charges for operating lease depreciation and impairment. Return on tangible equity of 17.1%

• Underlying net interest income of £7.3 billion, up 9% year-on-year. Reflecting a higher banking net interest margin of 3.19%, up 15 basis points (up 5 basis points in the second quarter compared to the first quarter), due to strong structural hedge income, franchise-led volume growth and average interest-earning banking asset growth of 4% to £475.7 billion, partially offset by asset margin compression

• Underlying other income of £3.3 billion, 11% higher year-on-year. Driven by strengthening customer activity and the continued benefit of investments in strategic initiatives

• Operating lease depreciation of £841 million. Up 18% due to a charge in the second quarter for declines in used car prices alongside fleet growth and the depreciation of higher value vehicles, partially offset by continued risk mitigation

• Operating costs of £4.9 billion, flat compared to the first half of 2025. This reflected business growth costs, inflationary pressures and the full acquisition of Schroders Personal Wealth (now Lloyds Wealth) in the fourth quarter of 2025, offset by continued cost savings, a lower severance expense and plateauing investment as this strategic cycle culminates. Remediation costs totaled £39 million across a small number of programmes

• Strong and stable credit performance. Underlying impairment charge of £617 million, resulting in an asset quality ratio of 25 basis points. This includes an £80 million net charge from updated multiple economic scenarios, compared to a small credit in the prior year

RESULTS FOR THE HALF-YEAR (continued)

Continued growth in lending and deposits

• Underlying loans and advances to customers of £491.5 billion increased by £10.4 billion (2%) in the first half of 2026. Growth across Retail of £5.0 billion (net of the impact of the securitisation of £1.8 billion of primarily legacy Retail mortgages in the second quarter) and Commercial Banking of £5.9 billion

• Customer deposits of £500.9 billion increased by £4.4 billion (1%) in the first half of 2026. Growth of £7.5 billion within Commercial Banking was partially offset by a reduction in Retail of £3.4 billion (mainly in the first quarter), primarily due to disciplined pricing decisions throughout the tax year-end

Strong capital generation driving increased capital returns

• Strong capital generation of 108 basis points. Primarily reflecting banking build partially offset by risk-weighted asset increases from the growth in lending. Pro forma CET1 ratio of 13.1% after the ordinary dividend accrual, announced share buyback in respect of the first half of 2026 and the completed acquisition of Curve

• Risk weighted assets of £241.8 billion, up £6.3 billion (3%) in the first half of 2026. Largely reflecting lending growth, partially offset by ongoing optimisation activity

• Tangible net assets per share at 30 June 2026 of 57.0 pence, in line with 31 December 2025. Attributable profit and a reduction in the number of shares in issue due to the ongoing share buyback announced in January 2026 were offset by capital distributions in respect of 2025 and increased longer-term rates impacting the cash flow hedge reserve

• Interim ordinary dividend of 1.58 pence per share (equivalent to £918 million), up 30% on the prior year, reflecting the steps taken to derisk the business, our strong capital base and confidence in the future earnings trajectory of the Group

• Alongside, the Board has announced its intention to implement a further ordinary share buyback programme of up to £1.0 billion, in addition to the £1.75 billion programme announced in the full year 2025 results

2026 guidance

Based on the sustained strength in our financial performance and our current macroeconomic assumptions, for 2026 the Group reiterates its guidance:

• Underlying net interest income of greater than £14.9 billion

• Cost:income ratio of less than 50% (including operating costs of less than £9.9 billion)

• Asset quality ratio of c.25 basis points

• Return on tangible equity of greater than 16%

• Capital generation of greater than 200 basis points2

• To pay down to a CET1 ratio of c.13.0%

2027 to 2030 guidance

Based on our current macroeconomic assumptions, from 2027 to 2030 the Group expects:

• Mid-single-digit net income compound annual growth rate and high-single-digit underlying other operating income compound annual growth rate

• Cost:income ratio of less than 45% in 2030, with year-on-year reductions

• Asset quality ratio of between 25 basis points and 30 basis points through the plan period

• Return on tangible equity of c.20% in 2030 and greater than 18% in 2028

• Capital generation of greater than 225 basis points in 20302

• Pro forma CET1 ratio of c.13.0%3

1 See the basis of presentation on page 100.

2 Excludes capital distributions.

3 Includes capital distributions announced in respect of the reporting period.

INCOME STATEMENT (UNDERLYING BASIS)A AND KEY BALANCE SHEET METRICS

A See page 94.

1 The increase between 31 March 2026 and 30 June 2026 is net of the impact of the securitisation of £1.8 billion of primarily legacy Retail mortgages in April 2026.

2 30 June 2026 pro forma CET1 ratio reflects the full impact of the share buyback in respect of the first half of 2026, announced in July 2026.

3 31 December 2025 pro forma CET1 ratio reflects the full impact of the share buyback in respect of 2025, announced in January 2026.

4 The Group has revised its definition of wholesale funding to comprise debt securities in issue and subordinated liabilities only. Deposits from banks are no longer included, reflecting the behavioural liquidity characteristics of bank depositors. Comparatives have been represented on a consistent basis.

5 The liquidity coverage ratio is calculated as an average of month-end observations over the last 12 months.

6 The net stable funding ratio is calculated as an average of the last four quarter-end observations.

QUARTERLY INFORMATIONA

1 The increase between 31 March 2026 and 30 June 2026 is net of the impact of the securitisation of £1.8 billion of primarily legacy Retail mortgages in April 2026.

2 30 June 2026 pro forma CET1 ratio reflects the full impact of the share buyback in respect of the first half of 2026, announced in July 2026.

3 31 December 2025 pro forma CET1 ratio reflects the full impact of the share buyback in respect of 2025, announced in January 2026. 30 June 2025 pro forma CET1 ratio reflects the ordinary dividend received from the Insurance business in July 2025.

4 The Group has revised its definition of wholesale funding to comprise debt securities in issue and subordinated liabilities only. Deposits from banks are no longer included, reflecting the behavioural liquidity characteristics of bank depositors. Comparatives have been represented on a consistent basis.

5 The liquidity coverage ratio is calculated as an average of month-end observations over the last 12 months.

6 The net stable funding ratio is calculated as an average of the last four quarter-end observations.

BALANCE SHEET ANALYSIS

1 The increase between 31 March 2026 and 30 June 2026 is net of the impact of the securitisation of £1.8 billion of primarily legacy Retail mortgages in April 2026.

2 UK Motor Finance balances on an underlying basisA exclude a finance lease gross up. See page 94.

3 From the first quarter of 2026, within underlying loans and advances to customers, UK private bank has been presented separately (having previously been presented within Retail other). Comparatives have been represented on a consistent basis.

4 Includes central fair value hedge accounting adjustments.

5 From the first quarter of 2026, within customer deposits, Retail UK savings accounts and Retail Europe have been presented separately (having previously been presented together as Retail savings accounts). Comparatives have been represented on a consistent basis.

6 Renamed from the first quarter of 2026, previously Wealth.

GROUP RESULTS - STATUTORY BASIS

The results below are prepared in accordance with the recognition and measurement principles of IFRS® Accounting Standards. The underlying basis results are shown on page 3.

GROUP CHIEF EXECUTIVE'S STATEMENT

The first half of 2026 was a period of continued delivery for the Group, with successful strategic execution, ongoing investment in our franchise and sustained strength in financial performance. Continued income momentum, disciplined cost management and strong and stable credit performance have supported strong returns and capital generation in the period.

Given the Group's performance, robust capital position and confidence in our earnings outlook, the Board has recommended an interim ordinary dividend of 1.58 pence per share, up 30% year on year. Additionally, in line with our intention to review excess capital distributions every half-year we are today announcing our first interim share buyback of up to £1.0 billion. Given our positive progress and strong first half performance we are on track to meet our 2026 financial targets.

As the UK's largest financial services provider, serving 28 million customers and around 1 million businesses, we are ideally placed to drive opportunity for people and businesses by shaping finance as a force for good. During the first half of 2026, we continued to support households, businesses and communities across the UK, helping more people access quality homes, build financial confidence and grow their businesses. I am proud of the progress we have made and grateful to colleagues across the Group for their continued dedication, resilience and commitment to supporting our customers and delivering for all of our stakeholders.

Building on our strong foundations, distinctive competitive strengths and significant progress over the last five years, today we are launching Accelerate 2030. Our new promise to customers is to make finance simpler, smarter and more connected for every moment that matters. We will invest into the next phase of growth to deliver sustainable value creation through reimagined customer experiences, increased Group connectivity and a productivity step-change, all enabled by pioneering technology. I look forward to working with colleagues across the Group as we grow, innovate and simplify to deliver our new strategy and to drive better outcomes for our customers and shareholders.

Sustained strength in financial performance

In the first half of the year, statutory profit after tax was £3.1 billion, up 23% year-on-year, resulting in a return on tangible equity of 17.1%. Underlying profit of £4.2 billion was driven by higher net income and controlled costs, partially offset by a higher underlying impairment charge. Net income of £9.7 billion increased by 9%, supported by a higher banking net interest margin of 3.19% and growth in underlying other income of 11%, partially offset by higher operating lease depreciation. Operating costs of £4.9 billion were flat, with business growth costs, inflationary pressures and the full acquisition of Schroders Personal Wealth (now Lloyds Wealth) in the fourth quarter of 2025 offset by continued cost savings, a lower severance expense and plateauing investment as our strategic cycle culminates. The underlying impairment charge of £617 million, reflects strong and stable credit performance, albeit higher than the first half of 2025 which benefitted from improvements to the macroeconomic outlook.

The Group's franchise and balance sheet in the year-to-date continued to grow. Underlying loans and advances to customers of £491.5 billion were up 2%, or £10.4 billion, reflecting growth in both Retail and Commercial Banking. Customer deposits of £500.9 billion increased by 1%, or £4.4 billion, in the period, including growth in Commercial Banking of £7.5 billion, partially offset by a reduction in Retail of £3.4 billion (mainly in the first quarter), primarily due to disciplined pricing decisions throughout the tax year-end.

The Group delivered strong capital generation of 108 basis points in the first half of 2026, with a pro forma CET1 ratio of 13.1%. As mentioned the Board has recommended an increased interim ordinary dividend of 1.58 pence per share, equivalent to £918 million, representing an increase of 30% compared to the first half of 2025. This significant step-up reflects the actions taken to derisk the business, our strong capital position and confidence in the future earnings trajectory of the Group. We remain committed to our progressive and sustainable dividend policy. The Group is now reviewing excess capital distributions in addition to the ordinary dividend every half-year. As a result the Board has announced its intention to implement a further ordinary share buyback programme of up to £1.0 billion. 

GROUP CHIEF EXECUTIVE'S STATEMENT (continued)

Guiding purpose of Helping Britain Prosper

Helping Britain Prosper informs the role we play in the UK economy and the choices we make as we aim to shape finance for the better. This means using our scale, insight and innovation to help people access quality homes, build financial resilience, and grow their businesses, while creating sustainable, long-term value for shareholders.

Our purpose is reflected in the support we provide across the economy. Since the start of 2022, we have supported more than £10 billion of financing to the social housing sector, alongside providing more than £35 billion of new financing to small business customers. Over the same period we have supported customers with more than £80 billion of sustainable financing. We are also helping customers engage with their finances more actively, with more than 12 million customers registered to 'Your Credit Score' with 500,000 improving their score each quarter.

Successfully delivered against the 2022 to 2026 strategy

Over 2022 to 2026 we transformed the Group by building on our leading scale, breadth and connectivity. We maintained leadership and grew market shares in key products and segments, while unlocking the potential of digital and AI, and driving cost and capital efficiency.

The Group returned to growth across its leading and diversified franchises. In Retail, we are the largest UK digital bank, with around 22 million mobile app users and around 7 billion digital logons a year. Within Commercial Banking we are a leading player in key UK markets such as Debt Capital Markets (DCM), Cash Management, and Infrastructure and Project finance, helping grow Corporate and Institutional Banking income by around 70% since 2021 on an annualised basis. Insurance, Pensions and Investments (IP&I) has grown Workplace assets under administration (AuA) by more than 70% in the period. In Lloyds Living, within the Group's equity investments business, by the end of 2026 we are targeting to have exchanged on more than 10,000 homes since the business started five years ago.

These areas of progress have driven a 4% revenue compound annual growth rate (CAGR) for the Group during the period 2022 to 2026, with strategic initiative revenues in particular expected to reach c.£2 billion for 2026 and OOI growing at an 8% CAGR which has further diversified our revenue and increased the sustainability of our shareholder returns.

The Group has also maintained a clear focus on cost and capital discipline. With the benefits of investments, we have generated over £2 billion of gross cost savings between 2022 to 2026 by improving productivity and efficiency, modernising the technology estate, digitising more interactions and rationalising our office footprint. This is demonstrated by the more than 45% improvement in the number of Retail customers served per FTE and the c.35% reduction in Group run and change technology costs. We have improved capital efficiency and taken steps to derisk the Group, including achieving around £28 billion of cumulative risk-weighted asset (RWA) optimisation alongside elimination of the c.£7 billion pension deficit. This has helped support around £17 billion of shareholder distributions since 2021, with the ordinary dividend per share more than doubling since the first half of 2021.

Our progress is underpinned by a transformation in how the Group operates, radically enhancing our infrastructure, reducing data centres by more than 50% and migrating more than 60% of applications to the cloud. We have hired around 11,000 technology and data specialists to drive digital and AI leadership and recently announced that GenAI is expected to deliver over £100 million of benefit in 2026. Together, these changes create the platform to serve customers more personally, connect more of the Group's capabilities and continue improving productivity.

GROUP CHIEF EXECUTIVE'S STATEMENT (continued)

Accelerate 2030

Our new strategy, Accelerate 2030, builds on the foundations created over 2022 to 2026. In the context of a stable UK outlook, with strong consumer and business balance sheets and a constructive regulatory environment, we are uniquely placed to address the structural growth opportunities in the UK, including housing, the digital economy, infrastructure, the energy transition, wealth and pensions.

The strategy remains rooted in our purpose of Helping Britain Prosper, the participation choices that make our current strategy successful, and our driving ambition to 'make finance simpler, smarter and more connected for every moment that matters' to our customers. The strategy is to accelerate through reimagined customer experiences, increased Group connectivity, and a productivity step-change, all enabled by pioneering technology.

We have three pillars in support of Accelerate 2030. Firstly, we will 'Grow the core' by scaling our market leading businesses, accelerating in faster growing areas within our core and reimagining the customer experience including leveraging AI. This will drive growth across core markets and will deepen relationships with our customers. Key focus areas include a new, unique Group rewards offering for retail customers, a broader, transformed Homes experience, digitally enabled, full-service Business and Commercial Banking (BCB) and a focused, modern, client centric Corporate and Institutional business (CIB), as we look to reinforce and grow core market shares.

Our second pillar is 'Innovate to deepen and diversify', by extending propositions to unlock connected, diversified, and differentiated growth. This includes increasing cross-Group connectivity, such as our integrated bancassurance and wealth model, extending into higher-value, fee generating adjacencies, such as through our integrated digital Transport ecosystem and broadening our reach across third party and AI channels through data-led connected propositions and new wallet and payment products for our retail and commercial customers.

Our third pillar is 'Simplify to outperform' by building future ready skills and infrastructure, delivering a digital and AI-enabled productivity step-change and maximising capital efficiency. This will include key initiatives such as extending our next-generation Retail core banking engine, accelerating speed to market of new propositions and scaling agentic AI adoption. We expect to deliver around £2 billion of gross cost savings over the plan.

Business priorities

Our Accelerate 2030 divisional strategic priorities align with these pillars and incorporate ambitious revenue and cost targets.

Retail starts from a position of market leadership, with 28 million customers, leading positions across our own and third-party channels, and number one positions in mortgages, current accounts, cards, loans and transport. Retail's priorities are to deepen primary relationships, such as our leading PCA share, through a differentiated, personalised Group wide rewards offering, whilst scaling leadership positions (e.g. Homes and Unsecured) with broader, transformed experiences. We are also building the UK's first integrated transport ecosystem, creating a more empowering customer experience. These priorities will be enabled by scaling the next-generation core banking engine and rolling out agentic servicing solutions to improve experience and cost-to-serve. The Retail bank is targeting mid-single-digit net income CAGR and a mid-single-digit cost:income ratio reduction in 2030.

Commercial Banking starts from a position of strength, with around one million business relationships in BCB, c.21% small business deposit market share1, around 3,000 CIB clients, including leading UK market positions such as DCM, Cash Management, and Infrastructure and Project finance. Commercial Banking priorities are to deepen BCB relationships with an enhanced, digital and AI-enabled offering. In CIB, we will enhance the cash, debt, risk offering, with focused capability enhancement and focused international expansion to support key clients. Across Commercial Banking we will embed solutions in third party customer workflows and ecosystems (e.g. the Stripe partnership in merchant acquiring announced June 2026) and connect the Group to high-growth companies, launching a comprehensive Innovation Banking proposition. We will underpin this growth with cost and capital efficiency, including AI augmented relationship manager productivity and expanded originate to distribute capabilities. Together, these actions will target a mid-single-digit net income CAGR and a low-single-digit cost:income ratio reduction in 2030.

1 Source: UK Finance. Deposit market share for the first quarter of 2026, versus high street banks.

GROUP CHIEF EXECUTIVE'S STATEMENT (continued)

Insurance, Pensions and Investments (IP&I) is a differentiated and unique business for the Group, with 10 million IP&I customers and top-three positions in Workplace, home insurance and annuities. IP&I priorities in Accelerate 2030 are to drive further growth by empowering customers, introducing ready-made, self-directed and advised propositions to Workplace customers through a Retirement ecosystem, and extending reach across businesses and employees realising cross-Group synergies. Through our distinctive, integrated bancassurance offering we will utilise tailored, accessible, AI-enabled products to meet more customer needs, building further on improvements in protection and home insurance in our Retail banking relationships. Through Lloyds Wealth we will also deliver a connected end-to-end wealth offering, helping all customers build, manage and transfer wealth with an integrated lifetime proposition from execution only D2C investments to, Invest AI (a new AI enabled service to bring simple advice to all), and full-advice financial planning. IP&I will continue to improve experience and cost to serve by automation and scaled agentic servicing solutions. Capital efficiency and returns will strengthen from the run-down of the longstanding closed book alongside growth in capital-lite areas as described above. IP&I is targeting a high-single-digit net income CAGR and a high-teens cost:income ratio reduction in 2030.

Equity Investments brings together distinctive, growth businesses including our award-winning mid-market private equity business LDC and our growing housing rental platform Lloyds Living. LDC will consolidate its mid-market leadership position, supporting high growth businesses through the life cycle whilst building on our relationships within BCB. Lloyds Living will build value in the homes portfolio through scale, growing to more than 20,000 properties by 2030, and increasing connectivity to broader-Group solutions including in the Insurance business and shared ownership mortgages. In Lloyds Living we will improve cost-to-serve and reduce risk by scaling our high quality in-house property management operations. Equity Investments will target high-single-digit net income CAGR while maintaining a low cost:income ratio in 2030.

Accelerate 2030 aims to increase Group connectivity, bringing together our broad offering, scale, data, and digital capabilities to create more connected propositions for customers and hence new, diversified sources of growth. In this respect our investment in innovation will include the distinctive bancassurance proposition, rent-to-buy 'Pathways' in Lloyds Living, and building new revenue streams such as Connected Commerce; an innovative proposition that will connect our 28 million Retail customers with our c.1 million business clients, providing targeted merchant campaigns and cashback offers.

Alongside, we are developing digital wallet and point-of-sale financing capabilities to give customers and merchants more flexible and value added ways to pay and transact. Digital asset solutions will support tokenised deposits to enable more integrated, faster and lower-cost payments journeys and transactions across our Retail and Commercial Banking franchises, adding value to our customers' lives. Together, these propositions will deepen customer relationships, support our ambition to make finance simpler, smarter and more connected, and create value in ways that only an integrated Lloyds Banking Group can.

AI in all its forms will be a key enabler in driving this acceleration. We are starting from a position of leadership, evidenced by our position as the top UK domestic bank in the Evident AI index ranking, and we see clear opportunities to transform customer engagement including increased personalisation and conversational interactions, to further improve customer experience, unlock colleague productivity through agentic assistants and reinventing servicing and operations with always-on and voice enabled agents.

Financial outlook

Accelerate 2030 is built upon a robust financial framework that will generate long-term, sustainable value for our shareholders. It is built on the financial foundations of investment discipline, efficiency focus and risk management which enable continued income growth, improved operating leverage and stronger returns and capital generation. These financial outcomes build further capacity for investment and growing, sustainable shareholder distributions.

Taking these themes in turn. Our financial foundations remain critical to create the conditions necessary for long-term value creation. We will continue to invest with discipline, with a focus on business priorities and consistent execution underpinned by disciplined returns hurdles and continuous tracking and reprioritisation as required. Higher investment will increasingly be financed by the capacity created by the gross cost saves generated by our continued focus on efficiency. We are targeting around £2 billion of gross cost savings by 2030 based on extending existing levers, such as our digital transformation and tech modernisation, and leveraging new areas, in particular realising AI value to drive a productivity step-change as we deliver our strategy. Effective risk management will continue to be at the core of our new strategy. This is built on a prudent risk appetite, a low risk, diversified balance sheet, consistent, low risk participation choices and comprehensive data and robust underwriting.

GROUP CHIEF EXECUTIVE'S STATEMENT (continued)

These foundations support further business transformation including new propositions, cross-Group connectivity, productivity improvements and the resilience of the Group. Higher investment supports mid-single-digit net income CAGR over the plan, with 2027 expected to exceed that level. This is driven by a combination of growing our core franchise based on measured participation choices, particularly in areas where lending growth outpaces nominal GDP, the growing structural hedge tailwind and other operating income from growth opportunities across the business.

Within this, we expect to see healthy net interest income growth during the plan period, supported by over £2 billion of additional structural hedge income and strong balance sheet expansion, which in turn will drive risk-weighted asset growth. Although Basel 3.1 implementation will result in a reduction of between £6 billion and £8 billion on 1 January 2027, from that point, risk-weighted assets will rise largely in line with lending. Alongside, business growth will modestly increase RWAs in operational risk and equity investments driving a limited increase in RWA density. The focus on OOI will drive further diversification of revenue from existing and new initiatives, which is expected to deliver high-single-digit CAGR over the plan. Income growth and continued efficiency also drives improved operating leverage. We are committed to improving our cost:income ratio every year over the plan to less than 45% in 2030.

Accelerate 2030 will drive stronger sustainable returns, with substantial earnings growth on top of a significant increase in our tangible equity base as we grow the balance sheet. We are targeting a return on tangible equity of around 20% in 2030, including a return on tangible equity of greater than 18% in 2028. Strengthening returns over the strategy will result in sustainable and growing capital generation. We will deploy this capital in a targeted way ensuring that we appropriately invest into the business alongside delivering significant, growing and sustainable capital returns for shareholders.

2026 guidance

Based on the sustained strength in our financial performance and our current macroeconomic assumptions, for 2026 the Group reiterates its guidance:

• Underlying net interest income of greater than £14.9 billion

• Cost:income ratio of less than 50% (including operating costs of less than £9.9 billion)

• Asset quality ratio of c.25 basis points

• Return on tangible equity of greater than 16%

• Capital generation of greater than 200 basis points1

• To pay down to a CET1 ratio of c.13.0%

2027 to 2030 guidance

Based on our current macroeconomic assumptions, from 2027 to 2030 the Group expects:

• Mid-single-digit net income CAGR and high-single-digit underlying other operating income CAGR

• Cost:income ratio of less than 45% in 2030, with year-on-year reductions

• Asset quality ratio of between 25 basis points and 30 basis points through the plan period

• Return on tangible equity of c.20% in 2030 and greater than 18% in 2028

• Capital generation of greater than 225 basis points in 20301

• Pro forma CET1 ratio of c.13.0%2

1 Excludes capital distributions.

2 Includes capital distributions announced in respect of the reporting period.

SUMMARY OF GROUP RESULTS

Statutory results

Income statement

The Group's statutory profit before tax for the first half of 2026 was £4,293 million, 23% higher than in the first half of 2025, reflecting higher total income and controlled costs, offset by higher charges for operating lease depreciation and impairment. Profit after tax was £3,123 million and earnings per share were 4.8 pence (half-year to 30 June 2025: £2,544 million and 3.8 pence respectively).

Total income for the first half of 2026 was £10,626 million, an increase of 13% on the prior period (half-year to 30 June 2025: £9,386 million). Net interest income of £7,105 million was up 10% (half-year to 30 June 2025: £6,478 million), driven by higher average interest-earning assets and a higher margin, resulting from stronger structural hedge income as eligible balances were reinvested into a higher rate environment, partially offset by asset margin compression, in particular in the UK mortgages portfolio.

Other income increased by 21% to £3,521 million (half-year to 30 June 2025: £2,908 million), with a higher net investment return and finance result in respect of insurance and investment contracts, higher net fee and commission income and higher other operating income, partially offset by a lower insurance service result. Net fee and commission income increased by 17% as a result of strengthening customer activity, while other operating income increased by 20% as a result of vehicle fleet growth and higher average vehicle rental values in UK Motor Finance within Retail and strong growth in Lloyds Living.

Total operating expenses of £5,717 million (half-year to 30 June 2025: £5,440 million) reflected business growth costs, inflationary pressures and the full acquisition of Schroders Personal Wealth (now Lloyds Wealth) in the fourth quarter of 2025, partially offset by continued cost savings, a lower severance expense and plateauing investment as this strategic cycle culminates. Alongside this, operating lease depreciation increased due to a charge in the second quarter for declines in used car prices alongside fleet growth and the depreciation of higher value vehicles, partially offset by continued risk mitigation.

A remediation charge of £39 million was recognised by the Group in the first half of 2026 (half-year to 30 June 2025: £37 million) across a small number of programmes. There have been no further charges relating to motor finance commission arrangements.

The impairment charge was £616 million (half-year to 30 June 2025: £442 million). The higher charge includes a net charge from updated multiple economic scenarios (MES) reflecting the impact of the deterioration in economic outlook in the first quarter due to the Middle East conflict, net of modest second quarter updates. The multiple economic scenarios impact for the first half of 2026 captures a higher unemployment rate peak and softer house price outlook compared to the year end view. This is partly offset by the release of the £50 million post model adjustment for global tariff and political disruption risks within Commercial Banking in the first quarter, now considered to be adequately captured within assumptions and resulting modelled provisions. Credit performance remains strong and stable across Retail and Commercial Banking with arrears low and stable in all portfolios.

SUMMARY OF GROUP RESULTS (continued)

Statutory results (continued)

Balance sheet

As at 30 June 2026, total assets were £994.2 billion, an increase of £50.1 billion (31 December 2025: £944.1 billion).

Financial assets at amortised cost were £570.8 billion, £17.1 billion higher (31 December 2025: £553.7 billion), including increases in loans and advances to customers of £10.2 billion, reverse repurchase agreements of £3.4 billion, debt securities of £2.6 billion and loans and advances to banks of £0.9 billion. Loans and advances to customers included growth of £1.8 billion in UK mortgages, net of the impact of a securitisation of £1.8 billion of primarily legacy Retail mortgages in the second quarter, alongside growth across credit cards, UK Retail unsecured loans, UK Motor Finance and the European retail business, totalling £2.9 billion. Lending balances also increased in Commercial Banking by £5.9 billion, reflecting growth across Corporate and Institutional Banking and Business and Commercial Banking, net of continued government-backed lending repayments. Reverse repurchase agreements and debt securities increased in response to market conditions.

Financial assets held at fair value through profit or loss at £258.4 billion increased by £18.0 billion during the period, with increased assets held to back insurance and investment contract liabilities reflecting market movements, alongside an increase within the banking business.

Derivative financial assets were £1.0 billion higher at £20.7 billion, driven by market movements. Cash and balances at central banks increased by £4.9 billion to £61.5 billion and financial assets at fair value through other comprehensive income of £40.4 billion increased by £4.1 billion, reflecting changes in liquidity holdings. Other assets were £5.0 billion higher, largely reflecting increased settlement balances, vehicle fleet growth within UK Motor Finance and growth in investment properties within Lloyds Living.

Total liabilities were £946.9 billion, £50.7 billion higher over the period (31 December 2025: £896.2 billion). Customer deposits of £500.9 billion increased by £4.4 billion in the period. Retail deposits were down by £3.4 billion, driven by lower Retail UK savings account balances largely in the first quarter, primarily due to disciplined pricing decisions throughout the tax year-end. Retail UK current account balances were broadly stable, supported by the strength of the Group's franchise and proposition. Commercial Banking deposits were up £7.5 billion in the period, with growth in targeted sectors. Repurchase agreements at amortised cost increased by £6.8 billion to £45.4 billion (31 December 2025: £38.6 billion).

Financial liabilities at fair value through profit or loss increased to £31.3 billion (31 December 2025: £27.9 billion) as a result of increased trading activity and derivative financial liabilities increased by £1.7 billion to £17.8 billion given market movements. Liabilities arising from insurance and investment contracts increased by £13.3 billion, reflecting the corresponding increase in the assets held to back these liabilities. Other liabilities increased by £6.8 billion to £33.0 billion, largely due to increased settlement balances. Debt securities in issue at amortised cost increased by £12.6 billion to £90.9 billion due to new issuances in the period, while subordinated liabilities decreased to £9.2 billion as a result of redemptions in the period.

Total equity of £47.2 billion at 30 June 2026 decreased by £0.6 billion (31 December 2025: £47.9 billion). Profit for the period was more than offset by the impact of the commenced ordinary share buyback programme in respect of 2025, the dividend paid in May 2026 and movements in the cash flow hedge reserve.

SUMMARY OF GROUP RESULTS (continued)

Income statement - underlying basisA

The Group's underlying profit was £4,215 million in the first half of 2026, up 18% versus the prior year (half-year to 30 June 2025: £3,561 million). The first half benefitted from higher underlying net interest income, higher underlying other income and controlled costs, partially offset by higher charges for operating lease depreciation and impairment. Underlying profit in the second quarter was up 10% versus the first quarter of 2026.

Net incomeA

1 Net of losses on disposal of operating lease assets of £32 million (half-year to 30 June 2025: £3 million; half-year to 31 December 2025: £7 million).

Net income of £9,747 million was up 9% compared to the first half of 2025, with higher underlying net interest income and higher underlying other income, partially offset by an increased charge for operating lease depreciation. Net income in the second quarter of 2026 was up 4% compared to the first quarter.

Within net income, underlying net interest income of £7,278 million was up 9% compared to the prior year (half-year to 30 June 2025: £6,655 million). This was supported by a higher banking net interest margin of 3.19% (half-year to 30 June 2025: 3.04%), resulting from stronger structural hedge income as eligible balances were reinvested into a higher rate environment, partially offset by asset margin compression, in particular in the UK mortgages portfolio. Net interest income for the period was also supported by strong customer-led lending growth. The Group delivered continued, broad-based growth across the Retail business, led by UK mortgages (net of the impact of the securitisation of £1.8 billion of primarily legacy Retail mortgages in the second quarter), the unsecured lending businesses and the European retail business. The Group also saw growth in Commercial Banking within Corporate and Institutional Banking, partially offset by continued repayments of government-backed lending within Business and Commercial Banking. Together, this resulted in increased average interest-earning banking assets in the first half of £475.7 billion (half-year to 30 June 2025: £457.8 billion). Underlying net interest income in the first half of 2026 included a non-banking net interest expense of £251 million (half-year to 30 June 2025: £236 million), increasing as a result of growth in the Group's other operating income activities and the refinancing of these activities at higher rates. The Group continues to expect underlying net interest income for 2026 to be greater than £14.9 billion.

Underlying net interest income of £3,709 million was up 4% compared to the first quarter of 2026 (three months to 31 March 2026: £3,569 million). A growing structural hedge contribution offset the impact of continued headwinds from asset margin compression and some deposit pricing pressure, resulting in a higher banking net interest margin of 3.22% compared to 3.17% in the first quarter of 2026. Alongside, average interest-earning banking assets grew 1% to £477.9 billion (three months to 31 March 2026: £473.5 billion), reflecting growth across the Retail division, led by credit cards and Retail Europe, and growth in Commercial Banking.

SUMMARY OF GROUP RESULTS (continued)

Income statement - underlying basisA (continued)

The Group manages the risk to earnings and capital from movements in interest rates by hedging the net liabilities which are stable or less sensitive to movements in rates. As at 30 June 2026, the notional balance of the sterling structural hedge was £246 billion (31 December 2025: £244 billion) with a weighted average life of approximately 3.75 years (31 December 2025: approximately 3.75 years). The £2 billion increase occurred in the first quarter, reflecting continued strong performance in hedge eligible balances, including personal current accounts. The notional balance remained stable in the second quarter. The Group generated £3.4 billion of total income from structural hedge balances in the first six months of 2026 (half-year to 30 June 2025: £2.6 billion). The Group continues to expect structural hedge earnings to be greater than £7.0 billion in 2026 and greater than £8.0 billion in 2027, with earnings growth from the structural hedge expected to continue thereafter.

Underlying other income of £3,310 million in the first half of 2026 grew by 11% compared to the prior year (half-year to 30 June 2025: £2,969 million), driven by strengthening customer activity and the continued benefit of investments in strategic initiatives. This included an increase of 10% in Retail, particularly driven by UK Motor Finance fleet growth and higher average vehicle rental values. Within Commercial Banking, underlying other income decreased by 4% year-on-year, with higher revenues from increased transaction banking and loan markets activity more than offset by the impact of continued UK market volatility and macroeconomic uncertainty, impacting the Group's UK focused trading business. Insurance, Pensions and Investments underlying other income was up 19%, driven by the full acquisition of Schroders Personal Wealth (now Lloyds Wealth) and strong performance in the Workplace business. Equity Investments and Central Items benefitted from continued growth in Lloyds Living and strong realisations and net valuation gains in LDC, with the Group's equity investment businesses up 42%.

Underlying other income in the second quarter was up 6% compared to the first quarter of 2026. This included continued growth within Retail in UK Motor Finance, higher seasonal debit card fee income, lower switcher spend in personal current accounts and a one-off gain on the securitisation of primarily legacy mortgages. This was alongside growth in markets income in Commercial Banking following a modest UK market recovery, strong performance in Workplace business and lower seasonal weather claims in Insurance, Pensions and Investments, alongside higher realisations and net valuation gains in LDC.

Operating lease depreciation of £841 million in the first half of 2026 was 18% higher than in the prior year (half-year to 30 June 2025: £710 million), due to a charge in the second quarter for declines in used car prices alongside fleet growth and the depreciation of higher value vehicles, partially offset by continued risk mitigation. Operating lease depreciation was 16% higher in the second quarter compared to the first quarter, at £452 million. This was predominantly due to continued declines in used car prices which resulted in a £41 million additional charge to reflect future expected residual values in the fleet. Going forward, the operating lease depreciation charge is expected to revert to a normalised run-rate more in line with fleet growth. The Group continues to mitigate the risk of used car price movements through a number of market and customer initiatives to both improve performance and reduce volatility.

Total costsA

Operating costs of £4,876 million were flat compared to the first half of 2025. This reflected business growth costs, inflationary pressures and the full acquisition of Schroders Personal Wealth (now Lloyds Wealth) in the fourth quarter of 2025, offset by continued cost savings, a lower severance expense and plateauing investment as this strategic cycle culminates. Operating costs in the second quarter were 3% lower than in the first quarter, primarily due to lower severance and the Bank of England supervisory charge in the first quarter.

SUMMARY OF GROUP RESULTS (continued)

Income statement - underlying basisA (continued)

A remediation charge of £39 million was recognised by the Group in the first half of 2026 (half-year to 30 June 2025: £37 million) across a small number of programmes. There have been no further charges relating to motor finance commission arrangements. The FCA published policy statement PS26/3 in March 2026 with final rules for its motor finance redress schemes. Four challenges to the FCA's schemes have been raised, three by lenders and one from a consumer group and the implementation of the scheme has now been delayed, given the Upper Tribunal hearing is not expected before December 2026. The Group will closely monitor how these challenges develop and consider any potential impact to the existing provision. Despite these uncertainties, the current provision continues to represent the Group's current best estimate of the potential impact of the motor finance issue.

Total costs, including remediation, of £4,915 million were flat compared with prior year, with net income up 9%. The cost:income ratio was 50.4% (half-year to 30 June 2025: 55.1%). In the second quarter the cost:income ratio was 49.0%. For 2026, the Group continues to expect the cost:income ratio to be less than 50%, with operating costs still expected to be less than £9.9 billion.

Underlying impairmentA

1 Impairment charges excluding the impact from the updated economic outlook (multiple economic scenarios, MES) taken each quarter.

The underlying impairment charge in the first half of 2026 was £617 million (half-year to 30 June 2025: £442 million), resulting in an asset quality ratio of 25 basis points. The higher charge includes an £80 million net charge from updated multiple economic scenarios (MES) (half-year to 30 June 2025: £9 million credit) reflecting the impact of the deterioration in economic outlook in the first quarter due to the Middle East conflict, net of modest second quarter updates. The multiple economic scenarios impact for the first half of 2026 captures a higher unemployment rate peak and softer house price outlook compared to the year end view. This is partly offset by the release of the £50 million post model adjustment for global tariff and political disruption risks within Commercial Banking in the first quarter, now considered to be adequately captured within assumptions and resulting modelled provisions. The pre-updated MES charge of £537 million (half-year to 30 June 2025: £451 million) is equivalent to an asset quality ratio of 22 basis points. The higher pre-updated MES charge compared to prior year is driven by Retail, reflecting model updates, a more normalised level of impairment alongside balance sheet growth, and lower one-off provision releases in Commercial Banking.

The impairment charge in the second quarter of £322 million, equivalent to an asset quality ratio of 26 basis points, includes a £21 million MES release reflecting modest favourability in the unemployment outlook. The higher pre-updated MES charge compared to the first quarter reflects model updates and lower model calibration benefits, in addition to charges in Commercial Banking following the reassessment of a small number of existing cases in default. Credit performance remains strong and stable across Retail and Commercial Banking with arrears low and stable in all portfolios. The Group continues to expect the asset quality ratio to be c.25 basis points in 2026.

SUMMARY OF GROUP RESULTS (continued)

Income statement - underlying basisA (continued)

Restructuring, volatility and other items