Lloyds Banking Group (LLOY) investor relations material

Executive summary

• Delivered strong H1 2026 results with net income up 9% year-over-year to £9.7bn and statutory profit after tax up 23% to £3.1bn, supported by robust growth in both net interest and other income.

• Statutory profit before tax rose 23% year-over-year to £4.3bn, driven by higher income and controlled costs, partially offset by increased impairment and operating lease depreciation.

• Achieved strong capital generation of 108bps in H1, enabling a 30% increase in the interim dividend and a £1bn share buyback.

• Continued to execute on strategic priorities, including digital transformation, cost efficiency, and diversification of income streams.

• Launched Accelerate 2030 strategy, targeting mid-single-digit net income CAGR, high single-digit OOI CAGR, cost-income ratio below 45% by 2030, and RoTE of ~20%.

Financial highlights

• Net income H1: £9.7bn, up 9% YoY; net interest income rose 9% to £7.3bn; net interest margin increased to 3.19%.

• Other income grew 11% year-over-year to £3.3bn, with broad-based momentum across divisions.

• Underlying profit before impairment increased 21% year-over-year to £4.8bn; underlying profit after impairment up 18% to £4.2bn.

• H1 operating costs: £4.9bn, flat YoY; cost:income ratio 50.4% in H1, Q2 at 49%.

• H1 impairment charge: £617m (AQR: 25bps); CET1 ratio post-distributions: 13.1%.

Outlook and guidance

• 2026 guidance: underlying net interest income >£14.9bn, cost:income ratio <50%, asset quality ratio ~25bps, RoTE >16%, capital generation >200bps, CET1 ratio ~13%.

• 2027–2030: mid-single-digit net income CAGR, high-single-digit OOI CAGR, cost:income ratio <45% by 2030, RoTE ~20% in 2030, capital generation >225bps.

• Dividend growth to continue, with buybacks as preferred excess capital distribution.

• Asset quality ratio guided at 25–30bps throughout the plan.

• Committed to progressive and sustainable ordinary dividend, with excess capital distribution considered half-yearly.