LYG Filings — Lloyds Banking Group Plc - FilingSpy
LYG
Lloyds Banking Group Plc
A British banking group offering everyday banking, mortgages, savings, credit cards, loans, insurance, and pensions to millions of customers through brands including Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows. Its roots reach back to 1765, when iron founder Sampson Lloyd and button maker John Taylor opened the first bank in Birmingham, and the modern group took shape in 2009 when Lloyds TSB acquired HBOS. The famous black horse logo traces to a sign that hung outside a Lombard Street goldsmith's shop in the 1600s.
20-F · Fiscal year ended Dec 31, 2025 · SEC filing ↗
Lloyds' net interest margin expanded for the first time in three years, driving an 8% rise in net interest income.
Lloyds' lending engine turned a corner. rose 16% to $26.2 billion and climbed 20% to $0.09 as expanded 10 to 2.06%, reversing years of compression. The motor finance remediation overhang remains the one unsettled question.
Key takeaways
rose 8% to £13.2 billion, driven by a 3% increase in average interest-earning assets and a 10 expansion in to 2.06% — the first since 2021.
The total charge rose to £795 million from £431 million, reflecting a net charge from macroeconomic outlook updates, though the total fell to £3,228 million due to strong credit performance and model refinements.
Section summaries
Quantitative and Qualitative Disclosures About Market Risk
Reference is made to the sections titled: •“Credit Risk” on pages 15 to 21; •“Market Risk” on pages 187 to 193 of the Annual Report 2025; and •“Note 39: Financial risk management” on page 294 of the Annual Report 2025 for information on market risk. Reference is made to the “Loa…
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Reference is made to the sections titled:
•“Credit Risk” on pages 15 to 21;
•“Market Risk” on pages 187 to 193 of the Annual Report 2025; and
•“Note 39: Financial risk management” on page 294 of the Annual Report 2025
for information on market risk.
Reference is made to the “Loan portfolio” section under Item 4.B - “Business overview” on page 6.
29 Lloyds Banking Group plc Annual Report on Form 20-F 2025
Part I continued
Lloyds Banking Group faces material risks from UK macroeconomic conditions, credit quality, regulatory actions, and operational resilience.
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The Retail division's underlying profit rose 5% to £3,356 million, supported by earnings and higher unsecured lending, but was partially offset by a £277 million increase in charges and an £800 million provision for motor finance commission arrangements.
Commercial Banking underlying profit increased 6% to £2,546 million, benefiting from deposit franchise strength and refinancing, while the charge swung to a £60 million loss from a £14 million credit in 2024.
Credit quality improved: as a percentage of total lending fell to 8.8% from 9.7%, and fell to 1.3% from 1.5%, driven by strong performance in UK mortgages.
The stood at 14.0%, down from 14.2% a year earlier, reflecting shareholder distributions and higher risk-weighted assets.
What changed
The trajectory flagged in 2024 reversed: after compressing 15 to 1.96% in 2024, the margin expanded 10 basis points to 2.06% in 2025 as the began to refinance at higher rates.
The motor finance commission liability flagged in 2024 remains unresolved: the £700 million provision taken in 2024 was increased to £800 million in 2025, and the ultimate cost remains uncertain pending a Supreme Court appeal.
The charge trend flagged in 2024 materialized: the charge rose to £795 million from £431 million, though underlying credit performance remained strong, with Stage 2 and Stage 3 loan ratios both improving.
The CET1 ratio flagged in 2024 declined further to 14.0% from 14.2%, as the £1.7 billion announced in 2024 and ongoing dividends drew down capital, partially offset by banking profits.
What to watch
The Supreme Court ruling on motor finance commission liability — the outcome will determine whether the £800 million provision is adequate or requires material adjustment.
The trajectory through 2026, as the continues to refinance and the Bank of England rate path evolves.
The charge trend, particularly whether the macroeconomic outlook updates that drove the 2025 increase persist or reverse.
The CET1 ratio relative to any further announcements, given the 14.0% level leaves limited buffer above regulatory requirements.
Adverse UK and global macroeconomic conditions could weaken borrower credit quality and reduce asset recoverability.
Liquidity and funding risks persist, particularly if retail deposits or access become constrained.
A credit rating downgrade could materially harm results, financial condition, or prospects.
Regulatory and legal developments, including compliance failures and insufficient capital, may lead to material financial impacts exceeding .
Operational risks include cybercrime, technology failures, third-party service disruptions, and failure to execute strategic change initiatives.
Lloyds Banking Group is a UK-focused financial services provider operating through Retail, Commercial Banking, and Insurance, Pensions and Investments segments.
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The Group serves individual and business customers primarily in the UK through brands including Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows.
It operates the UK's largest branch network and digital bank, distributing retail/commercial banking and long-term savings, protection, and investment products.
At year-end 2025, total assets were £944 billion, profit before tax was £6.7 billion, and the stood at 14.0%.
was £15.2 billion in 2025, with a on interest-earning assets of 2.09%, driven mainly by the banking book.
The Group is supervised by the PRA and FCA in the UK, and its US operations are subject to Federal Reserve Board oversight as a .
Net interest income rose 8% to £13.2B on higher assets and margin, while impairment charges increased to £795M.
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grew 8% to £13,230 million, driven by a 3% increase in average interest-earning assets to £641.7 billion and a 10 expansion in to 2.06%.
The Retail division's underlying profit rose 5% to £3,356 million, supported by earnings and higher unsecured lending, but was partially offset by a £277 million increase in charges and a £181 million rise in costs, including £800 million for motor finance commission arrangements.
Commercial Banking underlying profit increased 6% to £2,546 million, benefiting from deposit franchise strength and refinancing, while the charge swung to a £60 million loss from a £14 million credit in 2024.
The total charge rose to £795 million from £431 million, reflecting a net charge from macroeconomic outlook updates; however, the total expected credit loss allowance fell to £3,228 million due to strong credit performance and model refinements.
as a percentage of total lending improved to 8.8% from 9.7%, and fell to 1.3% from 1.5%, driven by strong credit performance particularly in UK mortgages.
The Group's liquidity is supported by a diversified funding base including securitisation programs like Cancara, and principal sources of potential liquidity for the holding company are dividends from subsidiaries such as Lloyds Bank plc and Scottish Widows Group Limited.