2026 Q1 Interim Management Statement

Lloyds Banking Group plc

Q1 2026 results

Interim management statement

29 April 2026

RESULTS FOR THE THREE MONTHS TO 31 MARCH 2026
 

“In the first quarter of 2026, the Group delivered sustained strength in financial performance, growing our income, maintaining our cost discipline and delivering strong profitability. Our differentiated business model remains resilient in the context of the current economic uncertainties. We remain focused on supporting UK households and businesses as they look to strengthen their financial positions and achieve their goals.

We are building strategic momentum during the final year of our current plan, providing innovative ways for our customers to manage their financial needs and achieve their financial aspirations. We are confident in our delivery for the year ahead and reiterate our guidance for 2026. We look forward to presenting our new strategy alongside the half-year results.”

Charlie Nunn, Group Chief Executive

Sustained strength in financial performance¹

• Statutory profit before tax of £2.0 billion (three months to 31 March 2025: £1.5 billion) benefitting from higher total income. Return on tangible equity of 17.0%
• Underlying net interest income of £3.6 billion, up 8% year-on-year. This reflects a higher banking net interest margin of 3.17%, up 14 basis points year-on-year (up 7 basis points compared to the fourth quarter). This was driven by strong structural hedge income, alongside franchise led volume growth, as illustrated by average interest-earning banking assets of £473.5 billion, up 4% year-on-year
• Underlying other income of £1.6 billion, 11% higher year-on-year driven by growth in customer activity and the continued benefit of strategic initiatives
• Operating lease depreciation of £389 million, up 10% following fleet growth, the depreciation of higher value vehicles and declines in used car prices, partially offset by risk mitigation actions
• Operating costs of £2.5 billion, down 3% reflecting higher cost savings and a lower severance expense, partially offset by business growth costs, inflationary pressures and the impact of Lloyds Wealth (Schroders Personal Wealth). Remediation costs of £11 million across a small number of pre-existing rectification programmes

• Underlying impairment charge of £295 million, giving an asset quality ratio of 25 basis points, reflects strong and stable credit performance. This includes a £101 million net charge from updated multiple economic scenarios

• Underlying loans and advances to customers of £486.2 billion increased by £5.1 billion (1%) in the quarter, with growth across Retail of £3.5 billion and Commercial Banking of £2.8 billion
• Customer deposits of £495.9 billion decreased by £0.6 billion in the quarter as fixed term deposits fell slightly given Group participation decisions. A £3.1 billion reduction in Retail was partially offset by £2.3 billion growth in Commercial Banking
• Strong capital generation of 41 basis points, primarily reflecting banking build offset by lending driven risk-weighted asset increases. CET1 ratio of 13.4% after the ordinary dividend accrual
• Risk-weighted assets of £240.8 billion, up £5.3 billion in the first quarter largely from lending growth, with limited planned optimisation
• Tangible net assets per share at 31 March 2026 of 57.9 pence, up 0.9 pence in the quarter (31 December 2025: 57.0 pence)

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 now expected to be 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%

¹ See the basis of presentation on page 14.

² Excludes capital distributions.

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http://www.rns-pdf.londonstockexchange.com/rns/2983C_1-2026-4-28.pdf

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