Lloyds Banking Group (LLOY) Q3 2024 earnings summary

Executive summary

• Delivered robust Q3 2024 performance with income growth, cost discipline, and strong asset quality, reaffirming 2024 guidance and increasing confidence in 2026 commitments.

• Strategic transformation is progressing, driving higher, more sustainable returns and improved customer propositions, especially in mortgages.

• Statutory profit after tax for nine months was £3.8bn, down 12% year-over-year, with net income down 7% and operating costs up 5%.

• Underlying profit before impairment was £5.6bn, down 19% year-over-year; underlying profit after impairment was £5.4bn, down 12%.

• CET1 ratio at 14.3%, above the ongoing target, with strong capital generation and continued share buybacks.

Financial highlights

• Net income for nine months was £12.7bn, down 7% year-over-year; Q3 net income up 5% sequentially to £4.3bn.

• Net interest income YTD £9.6bn, down 8% YoY; Q3 NII £3.2bn, up 2% QoQ; NIM at 2.95% in Q3.

• Other income YTD £4.2bn, up 9% YoY; Q3 £1.4bn.

• Operating costs YTD: £7bn, up 5% YoY; Q3 cost:income ratio 53.4% (YTD 55.9%).

• Statutory profit before tax was £5.1bn, down 10% year-over-year; statutory profit after tax was £3.8bn.

Outlook and guidance

• 2024 guidance reaffirmed: NIM > 290bps, operating costs ~£9.4bn, cost:income ratio <50%, AQR <20bps, ROTE ~13%.

• CET1 ratio expected to pay down to ~13.5% by year-end; capital generation ~175bps; RWAs £220–225bn.

• 2026 ambitions: sub-50% cost-to-income ratio, ROTE >15%, capital return ≥200bps, CET1 ~13.0%.

• Asset quality ratio expected to remain <20bps for 2024.

• Progressive and sustainable ordinary dividend policy maintained.