A.Operating results Reference is made to the sections titled: •“Our external environment” on pages 10 to 13 of the Annual Report 2025; •Future developments in relation to the Group’s IFRS Accounting Standard reporting are discussed in “Note 1: Basis of preparation” on page 218 of the Annual Report 2025; •“Note 3: Critical accounting judgements and key sources of estimation uncertainty” on page 228 of the Annual Report 2025; and •“Note 19: Derivative financial instruments” on pages 269 to 271 of the Annual Report 2025. Results of operations – 2025 and 2024 Income statement Reference is made to the “Consolidated income statement” on page 211 of the Annual Report 2025 for the Group’s income statement for each of the last two years. Net interest income 2025 2024 Change Net interest income (£m) 13,230 12,277 8 Average interest-earning assets (£m) 641,719 625,014 3 Average rates: Gross yield on average interest-earning assets of the banking book1 (%) 4.79 5.01 (22)bp Interest spread2 (%) 1.33 1.11 22bp Net interest margin3 (%) 2.06 1.96 10bp 1Gross yield is the rate of interest earned on average interest-earning assets of the banking book. 2Interest spread is the difference between the rate of interest earned on average interest-earning assets of the banking book and the rate of interest paid on average interest-bearing liabilities of the banking book. 3The net interest margin represents the interest spread together with the contribution of interest-free liabilities. It is calculated by expressing net interest income as a percentage of average interest-earning assets of the banking book. Net interest income in the year of £13,230 million was up 8%, compared to £12,277 million in 2024, reflecting higher average interest-earning assets and a higher margin. The net interest margin was 10 basis points higher at 2.06% (2024: 1.96%). Average interest-earning assets of the banking book were £16,705 million higher at £641,719 million (2024: £625,014 million) primarily reflecting an increase in average loans and advances to customers partially offset by a decrease in average loans and advances to banks. Other income Other income includes net fee and commission income, net trading income, insurance service result, net investment return and finance result in respect of insurance and investment contracts and other operating income. For further detail on each of these items, reference is made to “Note 6: Net fee and commission income” on pages 233 to 234 of the Annual Report 2025, “Note 7: Net trading income” on page 234 of the Annual Report 2025, “Note 8: Insurance business (A)” on page 235 of the Annual Report 2025, “Note 8: Insurance business (B)” on pages 235 to 236 of the Annual Report 2025 and “Note 9: Other operating income” on page 242 of the Annual Report 2025. Reference is also made to the “Statutory results” section on page 53 of the Annual Report 2025 for a description of the Group’s other income result. Operating expenses For further detail on operating expenses, reference is made to “Note 10: Operating expenses” on page 242 of the Annual Report 2025. Reference is also made to the “Statutory results” section on page 53 of the Annual Report 2025 for a description of the Group’s operating expenses result. Impairment For further detail on the impairment result, reference is made to “Note 14: Impairment” on pages 251 to 252 of the Annual Report 2025. Reference is also made to the “Statutory results” section on page 53 of the Annual Report 2025 for a description of the Group’s impairment result. Tax For further detail on the tax result, reference is made to “Note 15: Tax” on pages 252 to 254 of the Annual Report 2025. Reference is also made to the “Statutory results” section on page 53 of the Annual Report 2025 for a description of the Group’s tax result. Balance sheet Reference is made to the “Consolidated balance sheet” on page 213 of the Annual Report 2025 for the Group’s balance sheet for each of the last two years. Reference is also made to the “Statutory results” section on page 53 of the Annual Report 2025 for a description of material movements within the Group’s consolidated balance sheet. Capital For further detail on the capital position, reference is made to: •“Capital risk” on pages 144 to 145 and pages 147 to 150 of the Annual Report 2025; and •“Capital returns” and “Minimum requirement for own funds and eligible liabilities (MREL)” on pages 145 and 146 of the Annual Report 2025 12 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued Off-balance sheet arrangements A table setting out the amounts and maturities of Lloyds Banking Group’s other commercial commitments and guarantees at 31 December 2025 is included in the section titled “Maturities of contingent liabilities, commitments and financial guarantees (audited)” on page 186 of the Annual Report 2025. These commitments and guarantees are not included in Lloyds Banking Group’s consolidated balance sheet. Lending commitments are agreements to lend to customers in accordance with contractual provisions; these are either for a specified period or, as in the case of credit cards and overdrafts, represent a revolving credit facility which can be drawn down at any time, provided that the agreement has not been terminated. The total amounts of unused commitments do not necessarily represent future cash requirements, in that commitments often expire without being drawn upon. Lloyds Banking Group’s banking businesses are also exposed to liquidity risk through the provision of securitisation facilities to certain corporate customers. At 31 December 2025, Lloyds Banking Group offered securitisation facilities to its corporate and financial institution client base through its conduit securitisation programme, Cancara. This is funded in the global asset-backed commercial paper market. The assets and obligations of the programme are included in Lloyds Banking Group’s consolidated balance sheet. Lloyds Banking Group provides short-term asset-backed commercial paper liquidity support facilities on commercial terms to the programme, for use should the issuer be unable to roll over maturing commercial paper or obtain alternative sources of funding. Details of securitisations and other special purpose entity arrangements entered into by Lloyds Banking Group are provided in “Note 26: Debt securities in issue” on page 283 of the Annual Report 2025 and “Note 37: Structured entities” on pages 292 to 293 of the Annual Report 2025. The successful development of Lloyds Banking Group’s ability to securitise its own assets has provided a mechanism to tap a well established market, thereby diversifying Lloyds Banking Group’s funding base. Within Lloyds Banking Group’s insurance businesses, the principal sources of liquidity are premiums received from policyholders, charges levied upon policyholders, investment income and the proceeds from the sale and maturity of investments. The investment policies followed by Lloyds Banking Group’s life assurance companies take account of anticipated cash flow requirements including by matching the cash inflows with projected liabilities where appropriate. Cash deposits and highly liquid government securities are available to provide liquidity to cover any higher than expected cash outflows. Contractual cash obligations For detail on contractual cash obligations in respect of subordinated liabilities and their maturity profile, reference is made to “Note 29: Subordinated liabilities” on pages 285 to 286 of the Annual Report 2025 and “Note 18: Maturities of assets and liabilities” on pages 267 to 268 of the Annual Report 2025. For detail on outstanding debt securities in issue and their maturity profile, reference is made to “Note 18: Maturities of assets and liabilities” on pages 267 to 268 of the Annual Report 2025. For detail on the Group’s lease liabilities, reference is made to “Note 27: Other liabilities” on page 283 of the Annual Report 2025. For detail on the Group’s capital commitments, reference is made to “Capital commitments” within “Note 36: Contingent liabilities, commitments and financial guarantees” on pages 291 and 292 of the Annual Report 2025. The Group also had other purchase obligations totalling £4,858 million. At 31 December 2025, the principal sources of potential liquidity for Lloyds Banking Group plc were dividends received from its directly owned subsidiary companies, particularly Lloyds Bank plc and Scottish Widows Group Limited, and loans from this and other Lloyds Banking Group companies. The ability of Lloyds Bank to pay dividends going forward, or for Lloyds Bank or other Lloyds Banking Group companies to make loans to the Company depends on a number of factors, including their own regulatory capital requirements, distributable reserves and financial performance. Results of operations – 2023 The Group’s results for the year ended 31 December 2023, and a discussion of the results for the year ended 31 December 2024 compared to those for the year ended 31 December 2023, were included in the Annual Report on Form 20-F for the year ended 31 December 2024, filed with the SEC on 20 February 2025, the discussion for which is hereby incorporated by reference into this document. 13 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued Divisional information Please refer to the “Divisional information” section under Item 4.B - “Business overview” on page 4. Divisional results Retail Retail offers a broad range of financial services products to personal customers, including current accounts, savings, mortgages, credit cards, unsecured loans, motor finance and leasing solutions. Its aim is to build enduring relationships meeting more of its customers’ financial needs and improving financial resilience throughout their lifetime. Retail operates the largest digital bank in the UK and is improving digital experience through a mobile-first strategy. Retail delivers market-leading products and meets consumer duty expectations, working within a prudent risk appetite. Outside of the UK, Retail has a growing mortgages and savings focused European business. Through strategic investment and increased use of data, Retail aims to deepen consumer relationships, deliver personalised propositions, broaden its intermediary offering, improve customer experience and increase operational efficiency. Reference is made to “Note 4: Segmental analysis” on pages 228 to 232 of the Annual Report 2025 for a summary of the Retail division’s underlying profit before tax. •Underlying profit increased by £164 million to £3,356 million in 2025 compared to £3,192 million in 2024, driven by higher underlying net interest income and higher underlying other income, offset by increased operating lease depreciation, higher underlying operating costs, higher remediation and a higher underlying impairment charge •Underlying net interest income increased by £707 million to £9,637 million in 2025 compared to £8,930 million in 2024, driven by structural hedge earnings and higher unsecured loans balances, partially offset by continued mortgage refinancing and deposit churn headwinds •Underlying other income increased £282 million to £2,636 million in 2025 compared to £2,354 million in 2024, driven by fleet growth and higher average rental values in UK Motor Finance alongside strength in current account and credit card income •Operating lease depreciation increased £126 million to £1,445 million in 2025 compared to £1,319 million in 2024, reflecting fleet growth, the depreciation of higher value vehicles and declines in used electric car prices. Used car price volatility continues to be partly mitigated through lease extensions, used car leasing and remarketing agreements •Underlying operating costs increased by £241 million to £5,807 million in 2025 compared to £5,566 million in 2024, from strategic investment (including planned severance), business growth costs and inflationary pressures, partially offset by cost savings from investment and continued cost discipline •Remediation increased by £181 million to £931 million in 2025 compared to £750 million in 2024. Remediation costs in 2025 included £800 million relating to the potential impact of motor finance commission arrangements taken in the third quarter •Underlying impairment increased by £277 million to £734 million in 2025 compared to a charge of £457 million in 2024. 2024 included a credit for improved economic outlook. 2025 benefits from model refinements and a debt sale write back. Strong credit performance with ongoing improvement in UK mortgages and stability across unsecured products Commercial Banking Commercial Banking serves small and medium businesses and corporate and institutional clients, providing lending, transactional banking, working capital management, debt financing and risk management services, whilst connecting the whole Group to clients. Through investment in digitisation, product development and coverage capability, Commercial Banking is delivering an enhanced customer experience via a digital- first model in Business and Commercial Banking and an expanded client proposition in Corporate and Institutional Banking. This is meeting customer growth objectives, generating diversified capital efficient growth and supporting customers in their transition to net zero. Reference is made to “Note 4: Segmental analysis” on pages 228 to 232 of the Annual Report 2025 for a summary of the Commercial Banking division’s underlying profit. •Underlying profit increased by £145 million to £2,546 million in 2025 compared to £2,401 million in 2024, driven by higher underlying net interest income and higher underlying other income, offset by higher underlying operating costs and a higher underlying impairment charge •Underlying net interest income increased by £236 million to £3,670 million in 2025 compared to £3,434 million in 2024, underpinned by strength in the deposits franchise including structural hedge refinancing benefits •Underlying other income increased by £10 million to £1,825 million in 2025 compared to £1,815 million in 2024 driven by higher transaction banking and markets income more than offsetting lower loan markets activity, with 2024 benefitting from one-off gains •Underlying operating costs increased by £101 million to £2,853 million in 2025 compared to £2,752 million in 2024, reflecting strategic investment (including planned high severance), business growth costs and inflationary pressures, partially offset by cost savings from investment and continued cost discipline •Remediation decreased by £77 million to £27 million in 2025 compared to £104 million in 2024, relating to a small number of rectification programmes •Underlying impairment charge of £60 million in 2025 compared to a credit of £14 million in 2024 which benefitted from the improved economic outlook. 2025 included model calibration benefits alongside strong credit performance particularly in the second half of the year which more than offset higher Stage 3 charges observed in the first half of the year Insurance, Pensions and Investments Insurance, Pensions and Investments (IP&I) serves over 10 million customers, holds a top three market share across Home, Workplace and Individual Annuities businesses. The Group continues to invest significantly in the business. This includes enhancing investment propositions, supporting the Group’s Wealth and Mass Affluent strategy, driving digitisation in customer facing and operational platforms, innovating intermediary propositions and contributing to the transition to a low carbon economy. Reference is made to “Note 4: Segmental analysis” on pages 228 to 232 of the Annual Report 2025 for a summary of the Insurance, Pensions and Investments division’s underlying profit. •Underlying profit from Insurance, Pensions and Investments was £110 million higher at £330 million compared to an underlying profit of £220 million in 2024 primarily as a result of an increase of £124 million in underlying income •Underlying net interest income was stable at a loss of £151 million (2024: a loss of £136 million. Underlying other income increased by £139 million, or 11% to £1,431 million from £1,292 million in 2024, driven by higher net general insurance and workplace pension business income, alongside the integration of Schroders Personal Wealth in the fourth quarter •Underlying operating costs were £9 million higher at £933 million (2024: £924 million) reflecting strategic investment, inflationary pressures and the impact of the full acquisition of Schroders Personal Wealth in the fourth quarter, partially offset by cost savings from investment and continued cost discipline •Remediation decreased by £4 million to £15 million in 2025 compared to £19 million in 2024 14 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued Other Other includes the Group’s equity investment businesses, including LDC, Lloyds Living, the Housing Growth Partnership (HGP), the Group’s share of the Business Growth Fund (BGF) and the MADE Partnership joint venture. LDC is a leading private equity investor, supporting more than 90 growing SMEs that span all regions and sectors of the UK economy and employ over 25,000 people. LDC has almost £2.3 billion assets under management. Lloyds Living is the Group’s residential landlord business with 7,750 homes in operation or contracted as at 31 December 2025. Equity Investments and Central Items also includes income and expenses not attributed to the divisions, including residual underlying net interest income after transfer pricing. Reference is made to “Note 4: Segmental analysis” on pages 228 to 232 of the Annual Report 2025 for a summary of the remaining items of the Company’s underlying profit. Underlying profit in 2025 was higher compared to 2024, primarily as a result of an increase in underlying other income of £92 million, partly offset by a reduction of £63 million in underlying total costs. Underlying net interest income decreased in 2025 given increased funding costs to support volume growth in the Group’s equity and direct investment business, alongside lower divisional recharges from a reduction in structured medium-term note and AT1 distribution costs. Underlying other income includes £579 million (2024: £502 million) generated by the Group’s equity and direct investment businesses, increasing versus 2024 as a result of strong income growth from Lloyds Living, partially offset by lower income from LDC. Underlying total costs of £163 million in 2025 decreased by 28% on the prior year, including the effects of lower remediation costs. Environmental matters Reference is made to the sections titled: •“Sustainability review” on pages 35 to 49 of the Annual Report 2025; •“Climate risk” on pages 150 to 152 of the Annual Report 2025; and •“Sustainability governance” on pages 80 to 81 of the Annual Report 2025 Governmental policies For information regarding the effects of governmental policies and factors on the Group's operating results, please see the section titled "Regulatory and Legal Risks" in the 6-K Risk Factors and the section titled "Regulation" under Item 4.B - "Business Overview". Risk management Included in the sections incorporated by reference below are disclosures marked as audited. Such disclosures marked as audited form part of the audited consolidated financial statements included in Item 18. Reference is made to: •“Risk management” on pages 138 to 143 of the Annual Report 2025; •“Capital risk” on pages 144 to 145 and pages 147 to 150 of the Annual Report 2025; and •“Capital returns” and “Minimum requirement for own funds and eligible liabilities (MREL)” on pages 145 and 146 of the Annual Report 2025 •“Climate risk” on pages 150 to 152 of the Annual Report 2025; •“Compliance risk” on page 152 of the Annual Report 2025; •“Conduct risk” on page 153 of the Annual Report 2025; •“Economic crime risk” on page 179 of the Annual Report 2025; •“Insurance underwriting risk” on page 180 of the Annual Report 2025; •“Liquidity risk” on pages 181 to 186 of the Annual Report 2025; •“Market risk” on pages 187 to 193 of the Annual Report 2025; •“Model risk” on page 194 of the Annual Report 2025; and •“Operational risk” on pages 195 to 197 of the Annual Report 2025 15 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued Credit risk Definition Credit risk is defined as the risk that parties with whom the Group has contracted fail to meet their financial obligations (both on and off- balance sheet). Level two risks Retail credit (page 19), Commercial credit (page 21) Included in the sections incorporated by reference below are disclosures marked as audited. Such disclosures marked as audited form part of the audited consolidated financial statements included in Item 18. Reference is made to: •“Risk appetite” on page 154 of the Annual Report 2025; •“Identification and assessment” on page 154 of the Annual Report 2025; •“Management and mitigation” on pages 154 to 157 of the Annual Report 2025; •“Monitoring” on page 157 of the Annual Report 2025; and •“Reporting” on page 157 of the Annual Report 2025. The Group credit risk portfolio in 2025 Overview Credit performance has remained strong and stable in 2025. The Group maintains a measured approach to credit risk appetite and risk management with strong credit origination criteria embedded, including affordability tests and robust LTVs in the secured portfolios. In UK mortgages, reductions in new to arrears and flows to default have been observed, whilst unsecured portfolios continue to exhibit low and stable arrears trends. Credit performance also remains strong in Commercial Banking. The Group continues to assess the impacts of the economic and geopolitical environment carefully through a suite of early warning indicators and governance arrangements that ensure risk mitigating action plans are in place to support customers and protect the Group’s positions. The impairment charge in 2025 was £795 million, up from £431 million in 2024, and includes a net charge from updates to the Group’s macroeconomic outlook. Excluding macroeconomic updates, the Group’s impairment charge remains low and similar to 2024. The total probability-weighted expected credit loss (ECL) allowance was lower in 2025 at £3,228 million (31 December 2024: £3,481 million) following strong credit performance and additional benefits from model refinements. Stage 2 loans and advances to customers are lower at £42,679 million versus the prior year (31 December 2024: £44,765 million) following strong credit performance particularly within UK mortgages. Additionally, growth in lending from new business inflows dilute the proportion of Stage 2 loans and advances to 8.8% of total lending (31 December 2024: 9.7% with Stage 2 coverage reducing slightly at 2.7% (31 December 2024: 2.9%). Stage 3 loans and advances to customers are lower at £6,526 million versus the prior year (31 December 2024: £6,716 million), and as a percentage of total lending at 1.3% (31 December 2024: 1.5%). Migrations into Stage 3 from a small number of cases within Commercial Banking were offset by continued strong performance, especially following improving default rates within UK mortgages. Growth in house prices combined with strong credit performance across Retail also reduced the total Group Stage 3 coverage to 15.9% (31 December 2024: 16.5%). Total Group assets Impairment charge (credit) by division Loans andadvances tocustomers£m Loans andadvances tobanks£m Debt securities£m Financialassets atfair valuethrough othercomprehensiveincome£m Other£m Undrawnbalances£m 2025£m 2024£m UK mortgages (59) – – – – (1) (60) (194) Credit cards 327 – – – – (6) 321 270 UK unsecured loans and overdrafts 269 – – – – (12) 257 272 UK Motor Finance 214 – – – – (2) 212 116 Other 3 – – – – 1 4 (7) Retail 754 – – – – (20) 734 457 Business and Commercial Banking (53) – – – – – (53) 47 Corporate and Institutional Banking 166 – – – – (53) 113 (61) Commercial Banking 113 – – – – (53) 60 (14) Insurance, Pensions and Investments – – – – 2 – 2 (9) Other – – – (1) – – (1) (3) Total impairment charge (credit) 867 – – (1) 2 (73) 795 431 16 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued Total expected credit loss allowance At 31 Dec2025£m At 31 Dec2024£m Customer related balances Drawn 3,011 3,191 Undrawn 197 270 3,208 3,461 Loans and advances to banks 1 1 Debt securities 5 4 Other assets 14 15 Total expected credit loss allowance 3,228 3,481 Movements in total expected credit loss allowance Opening ECL at 31 Dec 2024£m Write-offsand other1£m Incomestatementcharge (credit)£m Net ECLincrease(decrease)£m Closing ECL at 31 Dec 2025£m UK mortgages 852 (61) (60) (121) 731 Credit cards 674 (392) 321 (71) 603 UK unsecured loans and overdrafts 523 (282) 257 (25) 498 UK Motor Finance 360 (142) 212 70 430 Other 67 (8) 4 (4) 63 Retail 2,476 (885) 734 (151) 2,325 Business and Commercial Banking 485 (55) (53) (108) 377 Corporate and Institutional Banking 504 (106) 113 7 511 Commercial Banking 989 (161) 60 (101) 888 Insurance, Pensions and Investments 15 (3) 2 (1) 14 Other 1 1 (1) – 1 Total2 3,481 (1,048) 795 (253) 3,228 1Contains adjustments in respect of purchased or originated credit-impaired financial assets. 2Total ECL includes £20 million relating to other non-customer-related assets (31 December 2024: £20 million). Total expected credit loss allowance sensitivity to economic assumptions The measurement of ECL reflects an unbiased probability-weighted range of possible future economic outcomes. The Group achieves this by generating four economic scenarios to reflect the range of outcomes; the central scenario reflects the Group’s base case assumptions used for medium-term planning purposes, an upside and a downside scenario are also selected together with a severe downside scenario. If the base case moves adversely, it generates a new, more adverse downside and severe downside which are then incorporated into the ECL. Consistent with prior years, the base case, upside and downside scenarios carry a 30% weighting; the severe downside is weighted at 10%. The following table shows the Group’s ECL for the probability-weighted, upside, base case, downside and severe downside scenarios. The stage allocation for an asset is based on the overall probability-weighted probability of default and hence the staging of assets is constant across all the scenarios. In each economic scenario the ECL for individual assessments is held constant reflecting the basis on which they are evaluated. Judgemental adjustments applied through changes to model inputs or parameters, or more qualitative post model adjustments, are apportioned across the scenarios in proportion to modelled ECL where this better reflects the sensitivity of these adjustments to each scenario. The probability-weighted view shows the extent to which a higher ECL allowance has been recognised to take account of multiple economic scenarios relative to the base case; the uplift on a statutory basis being £366 million compared to £445 million at 31 December 2024. Probability-weighted£m Upside£m Base case£m Downside£m Severedownside£m UK mortgages 731 341 510 937 1,943 Credit cards 603 498 579 674 777 Other Retail 991 922 969 1,036 1,126 Commercial Banking 888 690 789 1,010 1,414 Other 15 15 15 15 15 At 31 December 2025 3,228 2,466 2,862 3,672 5,275 UK mortgages 852 345 567 1,064 2,596 Credit cards 674 518 641 773 945 Other Retail 950 843 923 1,010 1,172 Commercial Banking 989 745 889 1,125 1,608 Other 16 16 16 16 17 At 31 December 2024 3,481 2,467 3,036 3,988 6,338 17 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued Group loans and advances to customers The following pages contain analysis of the Group’s loans and advances to customers by sub-portfolio. Loans and advances to customers are categorised into the following stages: •Stage 1 assets comprise of newly originated assets (unless purchased or originated credit-impaired), as well as those which have not experienced a significant increase in credit risk. These assets carry an expected credit loss allowance equivalent to the expected credit losses that result from those default events that are possible within 12 months of the reporting date (12 month expected credit losses) •Stage 2 assets are those which have experienced a significant increase in credit risk since origination. These assets carry an expected credit loss allowance equivalent to the expected credit losses arising over the lifetime of the asset (lifetime expected credit losses) •Stage 3 assets have either defaulted or are otherwise considered to be credit-impaired. These assets carry a lifetime expected credit loss •Purchased or originated credit-impaired assets (POCI) are those that have been originated or acquired in a credit-impaired state. This includes within the definition of credit-impaired the purchase of a financial asset at a deep discount that reflects impaired credit losses Loans and advances to customers and expected credit loss allowance At 31 December 2025 Stage 1£m Stage 2£m Stage 3£m POCI£m Total£m Stage 2 as % of total% Stage 3 as % of total% Loans and advances to customers UK mortgages 284,307 30,414 4,016 5,076 323,813 9.4 1.2 Credit cards 15,258 2,326 274 – 17,858 13.0 1.5 UK unsecured loans and overdrafts 10,601 1,397 193 – 12,191 11.5 1.6 UK Motor Finance 14,222 2,786 141 – 17,149 16.2 0.8 Other 21,245 392 145 – 21,782 1.8 0.7 Retail 345,633 37,315 4,769 5,076 392,793 9.5 1.2 Business and Commercial Banking 24,362 3,329 979 – 28,670 11.6 3.4 Corporate and Institutional Banking 59,658 2,035 778 – 62,471 3.3 1.2 Commercial Banking 84,020 5,364 1,757 – 91,141 5.9 1.9 Other1 540 – – – 540 – – Total gross lending 430,193 42,679 6,526 5,076 484,474 8.8 1.3 Customer related ECL allowance (drawn and undrawn) UK mortgages 55 208 309 159 731 Credit cards 205 277 121 – 603 UK unsecured loans and overdrafts 172 214 112 – 498 UK Motor Finance2 202 149 79 – 430 Other 17 11 35 – 63 Retail 651 859 656 159 2,325 Business and Commercial Banking 92 165 120 – 377 Corporate and Institutional Banking 107 136 263 – 506 Commercial Banking 199 301 383 – 883 Other – – – – – Total 850 1,160 1,039 159 3,208 Customer related ECL allowance (drawn and undrawn) as a percentage of loans and advances to customers Stage 1% Stage 2% Stage 3% POCI% Total% UK mortgages – 0.7 7.7 3.1 0.2 Credit cards 1.3 11.9 44.2 – 3.4 UK unsecured loans and overdrafts 1.6 15.3 58.0 – 4.1 UK Motor Finance 1.4 5.3 56.0 – 2.5 Other 0.1 2.8 24.1 – 0.3 Retail 0.2 2.3 13.8 3.1 0.6 Business and Commercial Banking 0.4 5.0 12.3 – 1.3 Corporate and Institutional Banking 0.2 6.7 33.8 – 0.8 Commercial Banking 0.2 5.6 21.8 – 1.0 Other – – – – – Total 0.2 2.7 15.9 3.1 0.7 1Contains central fair value hedge accounting adjustments. 2UK Motor Finance includes £243 million relating to provisions against residual values of vehicles subject to finance leases. 18 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued At 31 December 2024 Stage 1£m Stage 2£m Stage 3£m POCI£m Total£m Stage 2 as % of total% Stage 3 as % of total% Loans and advances to customers UK mortgages 269,760 32,995 4,166 6,207 313,128 10.5 1.3 Credit cards 13,534 2,441 265 – 16,240 15.0 1.6 UK unsecured loans and overdrafts 9,314 1,247 175 – 10,736 11.6 1.6 UK Motor Finance 13,897 2,398 124 – 16,419 14.6 0.8 Other 17,373 516 147 – 18,036 2.9 0.8 Retail 323,878 39,597 4,877 6,207 374,559 10.6 1.3 Business and Commercial Banking 25,785 3,172 1,197 – 30,154 10.5 4.0 Corporate and Institutional Banking 55,692 1,996 642 – 58,330 3.4 1.1 Commercial Banking 81,477 5,168 1,839 – 88,484 5.8 2.1 Other1 5 – – – 5 – – Total gross lending 405,360 44,765 6,716 6,207 463,048 9.7 1.5 Customer related ECL allowance (drawn and undrawn) UK mortgages 55 275 335 187 852 Credit cards 210 331 133 – 674 UK unsecured loans and overdrafts 170 235 118 – 523 UK Motor Finance2 173 115 72 – 360 Other 16 14 37 – 67 Retail 624 970 695 187 2,476 Business and Commercial Banking 132 187 166 – 485 Corporate and Institutional Banking 122 129 249 – 500 Commercial Banking 254 316 415 – 985 Other – – – – – Total 878 1,286 1,110 187 3,461 Customer related ECL allowance (drawn and undrawn) as a percentage of loans and advances to customers Stage 1% Stage 2% Stage 3% POCI% Total% UK mortgages – 0.8 8.0 3.0 0.3 Credit cards 1.6 13.6 50.2 – 4.2 UK unsecured loans and overdrafts 1.8 18.8 67.4 – 4.9 UK Motor Finance 1.2 4.8 58.1 – 2.2 Other 0.1 2.7 25.2 – 0.4 Retail 0.2 2.4 14.3 3.0 0.7 Business and Commercial Banking 0.5 5.9 13.9 – 1.6 Corporate and Institutional Banking 0.2 6.5 38.8 – 0.9 Commercial Banking 0.3 6.1 22.6 – 1.1 Other – – – – – Total 0.2 2.9 16.5 3.0 0.7 1Contains central fair value hedge accounting adjustments. 2UK Motor Finance includes £178 million relating to provisions against residual values of vehicles subject to finance leases. 19 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued Stage 2 loans and advances to customers and expected credit loss allowance Up-to-date 1-30 days past due2 Over 30 days past due PD movements Other1 Grosslending£m ECL3£m As % ofgrosslending% Grosslending£m ECL3£m As % ofgrosslending% Grosslending£m ECL3£m As % ofgrosslending% Grosslending£m ECL3£m As % ofgrosslending% At 31 December 2025 UK mortgages 26,298 155 0.6 2,032 13 0.6 1,130 18 1.6 954 22 2.3 Credit cards 2,048 202 9.9 144 36 25.0 94 23 24.5 40 16 40.0 UK unsecured loans and overdrafts 666 116 17.4 559 53 9.5 129 31 24.0 43 14 32.6 UK Motor Finance 1,325 69 5.2 1,293 40 3.1 136 29 21.3 32 11 34.4 Other 62 2 3.2 305 6 2.0 11 1 9.1 14 2 14.3 Retail 30,399 544 1.8 4,333 148 3.4 1,500 102 6.8 1,083 65 6.0 Business and Commercial Banking 2,767 133 4.8 258 15 5.8 213 12 5.6 91 5 5.5 Corporate and Institutional Banking 1,888 135 7.2 21 – – 7 1 14.3 119 – 0.0 Commercial Banking 4,655 268 5.8 279 15 5.4 220 13 5.9 210 5 2.4 Total 35,054 812 2.3 4,612 163 3.5 1,720 115 6.7 1,293 70 5.4 At 31 December 2024 UK mortgages 28,909 191 0.7 1,869 38 2.0 1,240 22 1.8 977 24 2.5 Credit cards 2,174 248 11.4 149 43 28.9 83 24 28.9 35 16 45.7 UK unsecured loans and overdrafts 630 129 20.5 439 52 11.8 131 36 27.5 47 18 38.3 UK Motor Finance 1,192 49 4.1 1,029 30 2.9 141 25 17.7 36 11 30.6 Other 103 3 2.9 321 7 2.2 37 2 5.4 55 2 3.6 Retail 33,008 620 1.9 3,807 170 4.5 1,632 109 6.7 1,150 71 6.2 Business and Commercial Banking 2,445 154 6.3 426 18 4.2 176 10 5.7 125 5 4.0 Corporate and Institutional Banking 1,903 125 6.6 45 1 2.2 6 – – 42 3 7.1 Commercial Banking 4,348 279 6.4 471 19 4.0 182 10 5.5 167 8 4.8 Total 37,356 899 2.4 4,278 189 4.4 1,814 119 6.6 1,317 79 6.0 1Includes forbearance, client and product-specific indicators not reflected within quantitative PD assessments. 2Includes assets that have triggered PD movements, or other rules, given that being 1 to 29 days in arrears in and of itself is not a Stage 2 trigger. 3Expected credit loss allowance on loans and advances to customers (drawn and undrawn). The Group’s assessment of a significant increase in credit risk, and resulting categorisation of Stage 2, includes customers moving into early arrears as well as a broader assessment that an up-to-date customer has experienced a level of deterioration in credit risk since origination. A more sophisticated assessment is required for up-to-date customers, which varies across divisions and product type. This assessment incorporates specific triggers such as a significant proportionate increase in probability of default relative to that at origination, recent arrears, forbearance activity, internal watch lists and external bureau flags. Up to date exposures in Stage 2 are likely to show lower levels of expected credit loss (ECL) allowance relative to those that have already moved into arrears given that an arrears status typically reflects a stronger indication of future default and greater likelihood of credit losses. Retail credit performance Portfolio overview •The Retail portfolio has continued to deliver strong credit performance in 2025 and remains well positioned despite macroeconomic headwinds. Consumers continue to show strength in the context of inflationary pressures •Robust risk management remains firmly embedded, underpinned by strong affordability and indebtedness controls for lending and a prudent risk appetite approach. Lending strategies are assessed regularly and are calibrated to reflect the latest macroeconomic conditions •In UK mortgages, new to arrears and flow to default rates have improved during 2025, while in the unsecured portfolios and UK Motor Finance, new to arrears and flows to default have remained low and stable •The Retail impairment charge in 2025 was £734 million, higher than the £457 million charge for 2024 which benefitted from improvements in the Group’s macroeconomic outlook. Excluding macroeconomic updates, the impairment charge is slightly lower than 2024 due to continued stability in flows to default with additional write-backs from model refinements •Retail customer related ECL allowance as a percentage of drawn loans and advances (coverage) has reduced to 0.6% (31 December 2024: 0.7%) •Strong credit performance and higher portfolio balances have reduced Stage 2 loans and advances to 9.5% of the Retail portfolio (31 December 2024: 10.6%). Stage 2 ECL coverage reduced to 2.3% (31 December 2024: 2.4%) •Stable and low flows to default and higher portfolio balances have also resulted in a reduction in Retail Stage 3 loans and advances to 1.2% of total loans and advances (31 December 2024: 1.3%) •Stage 3 ECL coverage reduced to 13.8% (31 December 2024: 14.3%), largely due to continued house price increases 20 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued UK mortgages •The UK mortgages portfolio increased to £323.8 billion (31 December 2024: £313.1 billion), driven by sustained customer demand •New to arrears in the UK mortgages portfolio improved during 2025. The portfolio remains well positioned with a strong loan to value (LTV) profile. Portfolio quality improved during the year, supported by robust affordability and credit controls with higher risk legacy vintage balances continuing to reduce •The impairment credit of £60 million for 2025 is lower than the credit of £194 million in 2024. Both years included favourable updates to the macroeconomic outlook, predominantly via continued growth in house prices, however this benefit was more material in 2024. Excluding macroeconomic updates, the impairment charge is favourable year-on-year due to improving flow to default rates •Stage 2 loans and advances have reduced to 9.4 of total UK mortgages balances (31 December 2024: 10.5%) following the removal of non- modelled adjustments previously applied to UK Bank Rate and CPI inflation in the severe downside scenario, combined with strong credit performance and higher portfolio balances •Continued strong credit performance and higher portfolio balances also resulted in a reduction in Stage 3 loans and advances to 1.2% (31 December 2024: 1.3%), with continued growth in house prices resulting in a reduction in Stage 3 ECL coverage to 7.7% (31 December 2024: 8.0%) Credit cards •Credit card balances increased to £17.9 billion (2024: £16.2 billion), driven by higher demand for new cards and increased customer spending •The credit card portfolio is a prime book. New to arrears continue to be low and repayment rates remain strong •The impairment charge of £321 million for 2025 is higher than the charge of £270 million in 2024, due to updates to the Group’s macroeconomic outlook, notably upwards revisions to the unemployment forecast, compared to favourable updates in 2024. Portfolio performance remained stable with additional write-backs from model refinements related to loss rates, and an unsecured debt sale completed in the fourth quarter. Total ECL coverage is lower at 3.4% (31 December 2024: 4.2%) •Stable credit performance and higher portfolio balances resulted in a reduction in Stage 2 loans and advances to 13.0% of total credit card balances (31 December 2024: 15.0%), with lower Stage 2 ECL coverage at 11.9% (31 December 2024: 13.6%) •Similarly, Stage 3 loans and advances reduced slightly to 1.5% (31 December 2024: 1.6%) with model refinements also contributing to reduce Stage 3 ECL coverage to 44.2% (31 December 2024: 50.2%) UK unsecured loans and overdrafts •UK unsecured loans and overdraft balances increased to £12.2 billion (2024: £10.7 billion) driven by organic balance growth and lower repayments •The impairment charge of £257 million for 2025 is lower than the charge of £272 million for 2024, largely due to loss rate model refinements. ECL and coverage are both lower at a total level and across all stages •Strong credit performance and higher portfolio balances within unsecured loans resulted in a slight reduction in Stage 2 loans and advances to 11.5% of total balances (31 December 2024: 11.6%), with Stage 2 ECL coverage lower at 15.3% (31 December 2024: 18.8%) •Similarly, Stage 3 loans and advances remained stable at 1.6% (31 December 2024: 1.6%), with model refinements also contributing to reduce Stage 3 ECL coverage to 58.0% (31 December 2024: 67.4%) UK Motor Finance •UK Motor Finance balances (which exclude operating leases) increased to £17.1 billion (2024: £16.4 billion), driven by retail demand, alongside increased stocking •Updates to Residual Value (RV) and Voluntary Termination (VT) provisions held against Personal Contract Purchase (PCP) and Hire Purchase (HP) lending are included within ECL and the impairment charge. Volatility in used vehicle values have primarily driven an ECL increase to £243 million as at 31 December 2025 (31 December 2024: £178 million) •The impairment charge of £212 million for 2025 is higher than the charge of £116 million for 2024, reflecting increased RV and VT charges year-on-year. Increased RV and VT provisions drove increases to Stage 2 ECL coverage to 5.3% (31 December 2024: 4.8%), with Stage 2 loans and advances increasing slightly to 16.2% (31 December 2024: 14.6%) •Stage 3 loans and advances remained stable at 0.8% (31 December 2024: 0.8%), with Stage 3 ECL coverage reducing slightly to 56.0% (31 December 2024: 58.1%) Other •Other Retail loans and advances increased to £21.8 billion (31 December 2024: £18.0 billion), largely driven by growth in the European business •Stage 2 loans and advances reduced to 1.8% (31 December 2024: 2.9%), due to higher portfolio balances, with coverage across stages broadly stable. Stage 3 loans and advances remained stable at 0.7% of total loans and advances (31 December 2024: 0.8%) •There was a £4 million impairment charge in 2025, compared to a £7 million credit in 2024 21 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued Commercial Banking credit performance Portfolio overview •Portfolio credit performance remained strong. The Group continues to monitor external developments and their impact upon the macroeconomic climate generally and also on specific sectors within the portfolio •Credit strategies and policy remain robust, and within risk appetite tolerances. The Group remains focused on credit underwriting and monitoring standards, and proactively managing higher risk and cyclical sector exposures •The Group continues to review segments of portfolios as appropriate, ensuring credit strategies, appetite, sensitivities and mitigation action plans are up-to-date and suitable for rapid action in response to both risks and opportunities, whilst supporting clients in the right way and ensuring the Group is protected •Credit playbooks, covering a range of potential credit downside scenarios, are maintained and refreshed as conditions evolve. Early warning indicators and risk appetite metrics are tracked and provide timely insight to enable proactive action where appropriate •The Group continues to provide early support to customers in difficulty through focused risk management via its Watchlist and Business Support framework. The approach balances prudent risk appetite with ensuring support for financially viable clients, reinforcing the Group’s commitment to resilience and responsible client management •Commercial Banking UK Real Estate committed drawn lending grew by £0.7 billion to £10.0 billion in 2025 (net of £2.6 billion exposures subject to protection through significant risk transfer (SRT) securitisations). Performance has remained strong and stable within this sector, with a decrease in cases in its Watchlist category and limited flow into Business Support •The net impairment charge in 2025 was £60 million, versus a credit of £14 million in 2024 and includes a charge from the updated macroeconomic outlook, including a judgemental adjustment in respect of global tariff and geo-political disruption risks. Excluding macroeconomic updates, a small number of single name charges were observed in the first half of the year, largely isolated to a single sector and not representative of trends across the portfolio. This has been offset by releases from Stage 1 and Stage 2 provisions capturing strong credit performance and reducing interest rates throughout the year •ECL allowances decreased in the year to £883 million in 2025 (31 December 2024: £985 million), also as a result of favourable model updates partially offset by single name cases •Stage 2 loans and advances increased to £5,364 million (31 December 2024: £5,168 million). Stage 2 as a proportion of total loans and advances to customers is stable at 5.9% (31 December 2024: 5.8%) with stable credit performance and model updates resulting in lower Stage 2 ECL coverage at 5.6% (31 December 2024: 6.1%) •Stage 3 loans and advances decreased to £1,757 million (31 December 2024: £ 1,839 million) and as a proportion of total loans and advances to customers to 1.9% (31 December 2024: 2.1%), given movements in the first half of 2025. Stage 3 ECL coverage is lower at 21.8% (31 December 2024: 22.6%) Business and Commercial Banking •Business and Commercial Banking lending reduced to £28.7 billion (31 December 2024: £30.2 billion), driven by government-backed lending repayments. Excluding these, the lending portfolio grew in the year •A net impairment credit of £53 million in 2025 compares to a charge of £47 million in 2024, driven by improved expectations for accounts in recoveries alongside continued strong credit performance •Stage 2 loans and advances increased to £3,329 million (31 December 2024: £3,172 million). Stage 2 as a proportion of total loans and advances to customers increased to 11.6% (31 December 2024: 10.5%), while Stage 2 ECL coverage decreased to 5.0% (31 December 2024: 5.9%) following model updates •Stage 3 loans and advances decreased to £979 million (31 December 2024: £1,197 million), primarily driven by repayments and reduced to 3.4% (31 December 2024: 4.0%) as a proportion of total loans and advances. Stage 3 ECL coverage reduced to 12.3% (31 December 2024: 13.9%) Corporate and Institutional Banking •Corporate and Institutional lending grew to £62.5 billion (31 December 2024: £58.3 billion), reflecting growth in Institutional balances including securitised products, alongside corporate infrastructure growth •A net impairment charge of £113 million in 2025 compares to an impairment credit of £61 million in 2024, driven by a small number of single name charges, primarily in the first half of the year •Stage 2 loans and advances increased to £2,035 million (31 December 2024: £1,996 million). Stage 2 as a proportion of total loans and advances to customers is stable at 3.3% (31 December 2024: 3.4%), with Stage 2 ECL coverage at 6.7% (31 December 2024: 6.5%) •Stage 3 loans and advances increased to £778 million (31 December 2024: £642 million) and as a proportion of total loans and advances to customers to 1.2% (31 December 2024: 1.1%), driven by a small number of single name transfers to Stage 3, mainly in the first half of the year. Stage 3 ECL coverage decreased to 33.8% (31 December 2024: 38.8%) following the write-off of a large longstanding case that was fully provided for Included in the sections incorporated by reference below are disclosures marked as audited. Such disclosures marked as audited form part of the audited consolidated financial statements included in Item 18. Reference is made to: •“Movements in balances for the year ended 31 December 2025 (audited)” on page 164 of the Annual Report 2025; •“Movements in balances for the year ended 31 December 2024 (audited)” on page 165 of the Annual Report 2025; •“Concentrations of exposure (audited)” on page 165 of the Annual Report 2025; •“Forbearance” on page 166 of the Annual Report 2025; •“Credit quality of loans and advances to customers (audited)” on pages 166 to 168 of the Annual Report 2025; •“Retail UK mortgage balance movements (audited)” on page 170 of the Annual Report 2025; •“UK mortgages product analysis (statutory basis)” on page 171 of the Annual Report 2025; •“Interest-only UK mortgages” on page 171 of the Annual Report 2025; •“Collateral held as security for Retail loans and advances to customers (audited)” on page 172 of the Annual Report 2025; •“Other Retail lending” and “Retail credit card balance movements (audited)” on page 173 of the Annual Report 2025; •“Commercial Banking balance movements (audited)” on page 175 of the Annual Report 2025; •“Collateral held as security for Commercial Banking loans and advances to customers (audited)” on page 176 of the Annual Report 2025; •“Commercial Banking UK Real Estate” on page 176 of the Annual Report 2025; •“Credit quality of other financial assets (audited)” on page 177 of the Annual Report 2025; and •“Collateral held as security for other financial assets (audited)” on page 178 of the Annual Report 2025 22 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued Glossary Term used US equivalent or brief description Accounts Financial statements. Articles of association Articles and bylaws. Associates Long-term equity investments accounted for by the equity method. Balance sheet Statement of financial position. Broking Brokerage. Building society A building society is a mutual institution set up to lend money to its members for house purchases. Buy-to-let mortgages Buy-to-let mortgages are those mortgages offered to customers purchasing residential property as a rental investment. Called-up share capital Ordinary shares, issued and fully paid. Contract hire Leasing. Creditors Payables. Debtors Receivables. Deferred tax Deferred income tax. Finance lease Capital lease. Freehold Ownership with absolute rights in perpetuity. Leasehold Land or property which is rented from the owner for a specified term under a lease. At the expiry of the term the land or property reverts back to the owner. Life assurance Life insurance. Net income Profit before tax, excluding total costs and underlying impairment Nominal value Par value. Open Ended Investment Company (OEIC) Mutual fund. Ordinary shares Common stock. Overdraft A line of credit, contractually repayable on demand unless a fixed-term has been agreed, established through a customer’s current account. Preference shares Preferred stock. Premises Real estate. Profit attributable to equity shareholders Net income. Provisions Reserves. Regular premium Premiums which are payable throughout the duration of a policy or for some shorter fixed period. Reinsurance The insuring again by an insurer of the whole or part of a risk that it has already insured with another insurer called a reinsurer. Retained profits Retained earnings. Share capital Capital stock. Shareholders’ equity Stockholders’ equity. Share premium account Additional paid-in capital. Shares in issue Shares outstanding. Specialist mortgages Specialist mortgages include those mortgage loans provided to customers who have self-certified their income. New mortgage lending of this type has not been offered by the Group since early 2009. Undistributable reserves Restricted surplus. Write-offs Charge-offs. Reference is made to the sections titled: •“Regulation” under Item 4.B - “Business overview” on page 8; •“Group structure and ring-fencing governance arrangements” under Item 4.B - “Business overview” on page 5; and •“Legal actions and regulatory matters” under Item 8 - “Financial Information” on page 26. B.Liquidity and capital resources Reference is made to the sections titled: •“Capital risk” on pages 144 to 145 and pages 147 to 150 of the Annual Report 2025; and •“Capital returns” and “Minimum requirement for own funds and eligible liabilities (MREL)” on pages 145 and 146 of the Annual Report 2025 •“Liquidity risk” on pages 181 to 186 of the Annual Report 2025; •“Market risk” on pages 187 to 193 of the Annual Report 2025; •"Note 16: Measurement basis of financial assets and liabilities" on pages 255 to 256 of the Annual Report 2025; •"Note 19: Derivative financial instruments" on pages 269 to 271 Annual Report 2025; and •“Note 36: Contingent liabilities, commitments and financial guarantees - Capital commitments” on pages 291 to 292 of the Annual Report 2025 for information on the liquidity and capital resources. 23 Lloyds Banking Group plc Annual Report on Form 20-F 2025 Part I continued Investment portfolio, maturities, deposits Reference is made to the sections titled: •“Investment portfolio, maturities, deposits” section under Item 4.B - “Business overview” on page 7; and •“Liquidity risk - Analysis of 2025 term issuance (audited)” on page 183 of the Annual Report 2025 The majority of the Group cash and cash equivalents are held in sterling. C.Research and development, patents and licenses etc. Reference is made to the section titled “Other statutory and regulatory information - Research and development activities” on page 135 of the Annual Report 2025. D.Trend information Reference is made to the “Our external environment” section on pages 10 to 13 of the Annual Report 2025 for information on trend information. E.Critical accounting estimates Reference is made to “Note 3: Critical accounting judgements and key sources of estimation uncertainty” on page 228 of the Annual Report 2025 for information on critical accounting estimates.