2024 Half-Year Results

Lloyds Bank PLC

25 July 2024

Lloyds Bank plc

25 July 2024

Member of the Lloyds Banking Group

CONTENTS

Financial review	1

Risk management
Principal risks and uncertainties	3
Capital risk	4
Credit risk	8
Liquidity risk	18

Statutory information
Condensed consolidated half-year financial statements (unaudited)	21
Condensed consolidated income statement (unaudited)	22
Condensed consolidated statement of comprehensive income (unaudited)	23
Condensed consolidated balance sheet (unaudited)	24
Condensed consolidated statement of changes in equity (unaudited)	25
Condensed consolidated cash flow statement (unaudited)	28
Notes to the condensed consolidated half-year financial statements (unaudited)	29

Statement of directors' responsibilities	58
Independent review report to Lloyds Bank plc	59
Forward looking statements	60
Contacts	61

FINANCIAL REVIEW

Principal activities

Lloyds Bank plc (the Bank) and its subsidiary undertakings (the Group) provide a wide range of banking and financial services through branches and offices in the UK and in certain overseas locations. The Group's revenue is earned through interest and fees on a broad range of financial services products including current accounts, savings, mortgages, credit cards, motor finance and unsecured loans to personal and business banking customers; and lending, transactional banking, working capital management and risk management services to commercial customers.

Income statement

The Group's profit before tax for the first half of 2024 was £2,818 million, 20 per cent lower than the same period in 2023. This was due to lower net interest income and higher operating expenses, partly offset by a lower impairment charge. Profit after tax was £2,007 million (half-year to 30 June 2023: £2,590 million).

Total income for the period was £8,376 million, a decrease of 7 per cent on the same period in 2023, primarily reflecting lower net interest income. Net interest income of £6,222 million was down 11 per cent compared to the first half of 2023, driven by lower margins. The lower margin reflects anticipated headwinds due to deposit churn and asset margin compression, particularly in the mortgage book as it refinances in a lower margin environment. These factors were partially offset by benefits from higher structural hedge earnings as it refinances in the higher rate environment.

Other income amounted to £2,154 million in the half-year to 30 June 2024 compared to £2,031 million in the same period in 2023, with improved UK Motor Finance performance, including growth following the acquisition of Tusker in the first half of 2023 and continued Commercial Banking growth partially offset by the impact of changes to commission arrangements with Scottish Widows.

Operating expenses of £5,436 million were 13 per cent higher than in the prior year. This reflects higher operating lease depreciation, due to fleet size growth, the depreciation of higher value vehicles and declines in used car prices (particularly in electric vehicles), alongside planned strategic investment, elevated severance charges and continued inflationary pressure. It also includes c.£100 million relating to the sector-wide change in the charging approach for the Bank of England Levy during the first quarter.

In the first half of 2024 the Group recognised remediation costs of £90 million (half-year to 30 June 2023: £62 million), largely in relation to pre-existing programmes. There have been no further charges relating to the potential impact of the FCA review into historical motor finance commission arrangements. An update from the FCA is currently expected in September.

Impairment was a net charge of £122 million compared to a £681 million charge in the half-year to 30 June 2023. This decrease reflects a larger credit from improvements to the Group's economic outlook in the period compared to the prior year (notably in HPI) and changes in methodology. In addition the reduction also includes the release of judgemental adjustments for inflation and interest rate risks and stronger performance in UK mortgages resulting in lower charges. Commercial Banking has benefited from a one-off release from loss rates used in the model, while observing a low charge on new and existing Stage 3 clients.

The Group recognised a tax expense of £811 million in the period, compared to £940 million in the first half of 2023, reflecting decreased profits.

FINANCIAL REVIEW (continued)

Balance sheet

Total assets were £2,957 million higher at £608,362 million at 30 June 2024 compared to £605,405 million at 31 December 2023. Financial assets at amortised cost were £9,987 million higher at £498,058 million compared to £488,071 million at 31 December 2023 with increases in reverse repurchase agreements of £9,522 million and loans and advances to customers of £2,186 million, partly offset by a reduction in loans and advances to banks of £1,743 million. The increase in reverse repurchase agreements and the decrease in cash and balances at central banks by £8,755 million to £49,154 million reflected a change in the mix of liquidity holdings. The increase in loans and advances to customers included growth across most Retail product areas, in particular UK Retail unsecured loans, due to balance growth and lower repayments following a securitisation in the fourth quarter of 2023. Other assets increased by £2,021 million to £13,959 million, driven by higher settlement balances and higher operating lease assets reflecting continued motor finance growth.

Total liabilities were £3,749 million higher at £568,723 million compared to £564,974 million at 31 December 2023. Customer deposits at £446,165 million increased by £4,212 million since the end of 2023, driven by inflows to limited withdrawal and fixed savings products, partly offset by decreases in current account balances. Debt securities in issue at amortised cost decreased by £3,724 million to £48,725 million at 30 June 2024. Amounts due to fellow Lloyds Banking Group undertakings increased by £2,236 million to £5,168 million at 30 June 2024. Other liabilities increased by £2,208 million to £8,468 million, driven by higher settlement balances.

Total equity was £39,639 million at 30 June 2024 compared to £40,431 million at 31 December 2023. The reduction in total equity was driven by an interim dividend of £2.1 billion, pension revaluations and cash flow hedging reserve movements, partly offset by the profit for the period.

Capital

The Group's common equity tier 1 (CET1) capital ratio reduced to 13.6 per cent at 30 June 2024 (31 December 2023: 14.4 per cent). This largely reflected profit for the period, offset by the payment of ordinary dividends during the first half of the year, the accrual for foreseeable ordinary dividends and an increase in risk-weighted assets.

Risk-weighted assets have increased by £1,389 million to £183,949 million at 30 June 2024 (31 December 2023: £182,560 million). This incorporates the impact of Retail lending growth, offset by optimisation including capital efficient securitisation activity, in addition to other movements.

RISK MANAGEMENT

PRINCIPAL RISKS AND UNCERTAINTIES

The most important risks faced by the Group are detailed below. The external risks faced by the Group may impact the success of delivering against the Group's long-term strategic objectives. They include, but are not limited to, macroeconomic uncertainty and elevated interest rates which are contributing to the cost of living and associated implications for UK consumers and businesses.

Asset quality remains strong with resilient credit performance throughout the period. The Group continues to monitor the impacts of the economic 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.

With respect to conduct risk there have been no further charges relating to the potential impact of the FCA review into historical motor finance commission arrangements. An update from the FCA is currently expected in September.

The Group is transforming its approach to risk management to support its strategic ambition and purpose of Helping Britain Prosper. The Group has reviewed its three lines of defence model and is evolving its accountabilities with enhanced focus on controls and expertise. This will increase the pace of decision making, with the intent of improving risk management. The Group has initially focused on non-financial risks.

The Group has also undertaken a detailed review of its risk categories and implemented an events-based risk management framework. This has resulted in a reduction in the number of principal risk types and the simplification of secondary risk categories. This change better aligns to the Basel Committee on Banking Supervision's event categories which will benefit the Group for scenario activities and regulatory reporting.

The Group has 10 principal risks; capital risk, climate risk, compliance risk (previously regulatory and legal risk), conduct risk, credit risk, economic crime risk, liquidity risk (previously liquidity and funding risk), market risk, model risk and operational risk (operational resilience risk has been removed as a separate risk category as it relates to many of the principal risk types).

The below principal risk definitions have changed since the Group's 2023 annual report and accounts:

Conduct risk - The risk of our Group activities, behaviours, strategy or business planning, having an adverse impact on outcomes for customers, undermining the integrity of the market or distorting competition, which could lead to regulatory censure, reputational damage or financial loss.

Economic crime risk - The risk that the Group implements ineffective policies, systems, processes and controls to prevent, detect and respond to the risk of fraud and/or financial crime resulting in increased losses, regulatory censure/fines and/or adverse publicity in the UK or other jurisdictions in which the Group operates.

Liquidity risk - The risk that the Group does not have sufficient financial resources to meet its commitments when they fall due or can only secure them at excessive cost.

Model risk - The potential for adverse consequences from model errors or the inappropriate use of modelled outputs to inform business decisions. Adverse consequences could lead to a deterioration in the prudential position, non-compliance with applicable laws and/or regulations, or damage to the Group's reputation. Model risk can also lead to financial loss, as well as qualitative limitations such as the imposition of restrictions on business activities.

Operational risk - The risk of actual or potential impact to the Group (financial and/or non-financial) resulting from inadequate or failed internal processes, people, and systems or from external events. Resilience is core to the management of operational risk within Lloyds Banking Group to ensure that business processes (including those that are outsourced) can withstand operational risks and can respond to and meet customer and stakeholder needs when continuity of operations is compromised.

All other principal risk definitions remain unchanged.

CAPITAL RISK

Capital resources

An analysis of the Group's capital position as at 30 June 2024 is presented in the following table. This reflects the application of the transitional arrangements for IFRS 9.

	At 30 Jun 2024 £m	At 31 Dec 2023 £m

Common equity tier 1
Shareholders' equity per balance sheet	34,552	35,355
Adjustment to retained earnings for foreseeable dividends	(1,250)	(490)
Cash flow hedging reserve	3,815	3,554
Other adjustments	(6)	73
	37,111	38,492
less: deductions from common equity tier 1
Goodwill and other intangible assets	(5,608)	(5,531)
Prudent valuation adjustment	(103)	(117)
Removal of defined benefit pension surplus	(2,473)	(2,653)
Deferred tax assets	(3,889)	(3,971)
Common equity tier 1 capital	25,038	26,220
Additional tier 1
Additional tier 1 instruments	5,018	5,018
Total tier 1 capital	30,056	31,238
Tier 2
Tier 2 instruments	5,506	5,747
Eligible provisions	119	417
Total tier 2 capital	5,625	6,164
Total capital resources	35,681	37,402

Risk-weighted assets	183,949	182,560

Common equity tier 1 capital ratio	13.6%	14.4%
Tier 1 capital ratio	16.3%	17.1%
Total capital ratio	19.4%	20.5%

CAPITAL RISK (continued)

Movements in CET1 capital resources

The key movements are set out in the table below.

Common equity tier 1 £m

At 31 December 2023	26,220
Profit for the period	2,007
Movement in foreseeable dividends¹	(760)
Dividends paid out on ordinary shares during the year	(2,140)
IFRS 9 transitional adjustment to retained earnings	(141)
Deferred tax asset	83
Goodwill and other intangible assets	(77)
Distributions on other equity instruments	(172)
Other movements	18
At 30 June 2024	25,038

¹ Reflects the reversal of the brought forward accrual for the interim ordinary dividend at 31 December 2023, net of the accrual recognised at 30 June 2024.

CET1 capital resources have reduced by £1,182 million during the period, primarily reflecting profit for the period, which was more than offset by:

• The payment of ordinary dividends during the first half of the year and the accrual for foreseeable ordinary dividends

• Distributions on other equity instruments

• The unwind of IFRS 9 dynamic transitional relief, including the phased reduction on 1 January 2024

Movements in total capital

The Group's total capital ratio reduced to 19.4 per cent (31 December 2023: 20.5 per cent). This reflected the reduction in CET1 capital, the reduction in eligible provisions recognised through Tier 2 capital, the impact of interest rates on Tier 2 capital instruments and the increase in risk-weighted assets.

CAPITAL RISK (continued)

Risk-weighted assets

	At 30 Jun 2024 £m	At 31 Dec 2023 £m

Foundation Internal Ratings Based (IRB) Approach	34,955	36,478
Retail IRB Approach	88,587	85,436
Other IRB Approach	6,263	6,126
IRB Approach	129,805	128,040
Standardised (STA) Approach¹	18,827	19,021
Credit risk	148,632	147,061
Securitisation	8,440	8,246
Counterparty credit risk	947	875
Credit valuation adjustment risk	331	454
Operational risk	25,305	25,605
Market risk	294	319
Risk-weighted assets	183,949	182,560
of which: threshold risk-weighted assets²	1,070	1,424

¹ Threshold risk-weighted assets are included within the Standardised (STA) Approach.

² Threshold risk-weighted assets reflect the element of deferred tax assets that are permitted to be risk-weighted instead of being deducted from CET1 capital.

CAPITAL RISK (continued)

Leverage ratio

The table below summarises the component parts of the Group's leverage ratio.

	At 30 Jun 2024 £m	At 31 Dec 2023 £m

Total tier 1 capital	30,056	31,238

Exposure measure
Statutory balance sheet assets
Derivative financial instruments	2,688	3,165
Securities financing transactions	42,773	32,796
Loans and advances and other assets	562,901	569,444
Total assets	608,362	605,405

Qualifying central bank claims	(48,670)	(57,430)

Derivatives adjustments	(1,350)	(1,737)
Securities financing transactions adjustments	1,519	1,431
Off-balance sheet items	31,940	31,494
Amounts already deducted from Tier 1 capital	(12,013)	(12,060)
Other regulatory adjustments¹	(4,856)	(4,950)
Total exposure measure	574,932	562,153

UK leverage ratio	5.2%	5.6%

Leverage exposure measure (including central bank claims)	623,602	619,583
Leverage ratio (including central bank claims)	4.8%	5.0%

¹ Includes deconsolidation adjustments that relate to the deconsolidation of certain Group entities that fall outside the scope of the Group's regulatory capital consolidation and adjustments to exclude lending under the UK Government's Bounce Back Loan Scheme (BBLS).

Analysis of leverage movements

The Group's UK leverage ratio reduced to 5.2 per cent (31 December 2023: 5.6 per cent). This reflected both the reduction in the total tier 1 capital position and the £12.8 billion increase in the leverage exposure measure, principally related to the increase in securities financing transactions and other balance sheet movements.

Stress testing

As part of the 2022 Annual Cyclical Scenario stress test run by the Bank of England, the Group's resilience to a severe economic shock where the House Price Index (HPI) falls by 31 per cent, Commercial Real Estate (CRE) falls by 45 per cent, unemployment peaks at 8.5 per cent and the Base Rate peaks at 6 per cent was assessed. The results of this exercise were published by the Bank of England on 12 July 2023, with the Group comfortably passing the relevant hurdle rates.

Pillar 3 disclosures

The Group will publish a condensed set of half-year Pillar 3 disclosures in the second half of August. A copy of the disclosures will be available to view at: www.lloydsbankinggroup.com/investors/financial-downloads.html.

CREDIT RISK

Overview

The Group's portfolios are well-positioned to benefit from an improved, but still challenging macroeconomic environment. The Group retains a prudent approach to credit risk appetite and risk management, with strong credit origination criteria and robust LTVs in the secured portfolios.

Asset quality remains strong with resilient credit performance throughout the period. In UK mortgages, reductions in new to arrears and flows to default have been observed in the half-year and second quarter. Unsecured portfolios continue to exhibit stable new to arrears and flow to default trends. Credit quality remains stable and resilient in Commercial Banking. The Group continues to monitor the impacts of the economic 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 the first half of 2024 was £122 million, down from a charge of £681 million in the first half of 2023. This is partly as a result of improvements in the Group's macroeconomic outlook. The Group's ECL allowance on loans and advances to customers decreased in the first half to £3,587 million (31 December 2023: £4,007 million).

Group Stage 2 loans and advances to customers reduced to £42,774 million (31 December 2023: £52,973 million) and as a percentage of total lending to at 9.8 per cent (31 December 2023: 12.1 per cent). This is due to improvements in the macroeconomic outlook transferring assets back to Stage 1. Of the total Group Stage 2 loans and advances to customers, 91.5 per cent are up to date (31 December 2023: 92.5 per cent). Stage 2 coverage remains stable at 3.2 per cent (31 December 2023: 3.1 per cent).

Stage 3 loans and advances to customers have increased slightly to £7,343 million (31 December 2023: £7,131 million), and as a percentage of total lending to 1.7 per cent (31 December 2023: 1.6 per cent). Stage 3 coverage decreased by 1.2 percentage points to 14.7 per cent (31 December 2023: 15.9 per cent).

Prudent risk appetite and risk management

• The Group continues to take a prudent and proactive approach to credit risk management and credit risk appetite whilst, in line with the Group's strategy, supporting clients to grow, as well as working closely with customers to help them through the impact of higher borrowing costs and higher prices following elevated inflation in recent years

• Sector, asset and product concentrations within the portfolios are closely monitored and controlled, with mitigating actions taken where appropriate. Sector and product risk appetite parameters help manage exposure to certain higher risk and cyclical sectors, segments and asset classes

• The Group's effective risk management seeks to ensure early identification and management of customers and counterparties who may be showing signs of distress

• The Group will continue to work closely with its customers to ensure that they receive the appropriate level of support, including but not restricted to embracing the standards outlined in the Mortgage Charter

CREDIT RISK (continued)

Impairment charge (credit) by division

	Half-year to 30 Jun 2024 £m	Half-year to 30 Jun 2023 £m	Change %	Half-year to 31 Dec 2023 £m	Change %

UK mortgages	(119)	191		(242)	(51)
Credit cards	115	197	42	260	56
UK unsecured loans and overdrafts	140	160	13	91	(54)
UK Motor Finance	61	43	(42)	126	52
Other	(3)	1		4
Retail	194	592	67	239	19
Small and Medium Businesses	11	25	56	89	88
Corporate and Institutional Banking	(80)	65		(662)	(88)
Commercial Banking	(69)	90		(573)	(88)
Other	(3)	(1)		(4)	(25)
Total impairment charge (credit)	122	681	82	(338)

Total expected credit loss allowance

	At 30 Jun 2024 £m	At 31 Dec 2023 £m

Customer related balances
Drawn	3,314	3,693
Undrawn	273	314
	3,587	4,007
Other assets	9	14
Total ECL allowance	3,596	4,021

Movements in total expected credit loss allowance

	Opening ECL at 31 Dec 2023 £m	Write-offs and other¹ £m	Income statement charge (credit) £m	Net ECL increase (decrease) £m	Closing ECL at 30 Jun 2024 £m


UK mortgages²	1,115	(25)	(119)	(144)	971
Credit cards	810	(225)	115	(110)	700
UK unsecured loans and overdrafts	515	(156)	140	(16)	499
UK Motor Finance	342	(39)	61	22	364
Other	88	(6)	(3)	(9)	79
Retail	2,870	(451)	194	(257)	2,613
Small and Medium Businesses	537	(51)	11	(40)	497
Corporate and Institutional Banking	613	(48)	(80)	(128)	485
Commercial Banking	1,150	(99)	(69)	(168)	982
Other	1	3	(3)	-	1
Total³	4,021	(547)	122	(425)	3,596

¹ Contains adjustments in respect of purchased or originated credit-impaired financial assets.

² Includes £20 million within write-offs and other relating to the securitisation of £1 billion of legacy Retail mortgages in the second quarter of 2024.

³ Total ECL includes £9 million relating to other non customer-related assets (31 December 2023: £14 million).

CREDIT RISK (continued)

Loans and advances to customers and expected credit loss allowance

At 30 June 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	266,308	29,842	4,542	7,218	307,910	9.7	1.5
Credit cards	13,329	2,601	290	-	16,220	16.0	1.8
UK unsecured loans and overdrafts	8,261	1,213	186	-	9,660	12.6	1.9
UK Motor Finance	14,185	2,288	117	-	16,590	13.8	0.7
Other	16,434	522	163	-	17,119	3.0	1.0
Retail	318,517	36,466	5,298	7,218	367,499	9.9	1.4
Small and Medium Businesses	26,866	3,773	1,323	-	31,962	11.8	4.1
Corporate and Institutional Banking	36,888	2,535	722	-	40,145	6.3	1.8
Commercial Banking	63,754	6,308	2,045	-	72,107	8.7	2.8
Other¹	(982)	-	-	-	(982)
Total gross lending	381,289	42,774	7,343	7,218	438,624	9.8	1.7

Customer related ECL allowance (drawn and undrawn)
UK mortgages	87	328	331	225	971
Credit cards	206	361	133	-	700
UK unsecured loans and overdrafts	158	231	110	-	499
UK Motor Finance²	185	112	67	-	364
Other	15	19	45	-	79
Retail	651	1,051	686	225	2,613
Small and Medium Businesses	131	205	161	-	497
Corporate and Institutional Banking	127	120	230	-	477
Commercial Banking	258	325	391	-	974
Other	-	-	-	-	-
Total	909	1,376	1,077	225	3,587

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	-	1.1	7.3	3.1	0.3
Credit cards	1.5	13.9	45.9	-	4.3
UK unsecured loans and overdrafts	1.9	19.0	59.1	-	5.2
UK Motor Finance	1.3	4.9	57.3	-	2.2
Other	0.1	3.6	27.6	-	0.5
Retail	0.2	2.9	12.9	3.1	0.7
Small and Medium Businesses	0.5	5.4	12.2	-	1.6
Corporate and Institutional Banking	0.3	4.7	31.9	-	1.2
Commercial Banking	0.4	5.2	19.1	-	1.4
Other		-	-	-
Total	0.2	3.2	14.7	3.1	0.8

¹ Contains centralised fair value hedge accounting adjustments.

² UK Motor Finance for Stages 1 and 2 include £185 million relating to provisions against residual values of vehicles subject to finance leasing agreements for Black Horse. These provisions are included within the calculation of coverage ratios.

CREDIT RISK (continued)

Loans and advances to customers and expected credit loss allowance (continued)

At 31 December 2023	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	256,596	38,533	4,337	7,854	307,320	12.5	1.4
Credit cards	12,625	2,908	284	-	15,817	18.4	1.8
UK unsecured loans and overdrafts	7,103	1,187	196	-	8,486	14.0	2.3
UK Motor Finance	13,541	2,027	112	-	15,680	12.9	0.7
Other	15,898	525	144	-	16,567	3.2	0.9
Retail	305,763	45,180	5,073	7,854	363,870	12.4	1.4
Small and Medium Businesses	27,525	4,458	1,530	-	33,513	13.3	4.6
Corporate and Institutional Banking	35,872	3,335	528	-	39,735	8.4	1.3
Commercial Banking	63,397	7,793	2,058	-	73,248	10.6	2.8
Other¹	(301)	-	-	-	(301)
Total gross lending	368,859	52,973	7,131	7,854	436,817	12.1	1.6

Customer related ECL allowance (drawn and undrawn)
UK mortgages	169	376	357	213	1,115
Credit cards	234	446	130	-	810
UK unsecured loans and overdrafts	153	244	118	-	515
UK Motor Finance²	188	91	63	-	342
Other	20	21	47	-	88
Retail	764	1,178	715	213	2,870
Small and Medium Businesses	139	231	167	-	537
Corporate and Institutional Banking	135	212	253	-	600
Commercial Banking	274	443	420	-	1,137
Other	-	-	-	-	-
Total	1,038	1,621	1,135	213	4,007

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	0.1	1.0	8.2	2.7	0.4
Credit cards	1.9	15.3	45.8	-	5.1
UK unsecured loans and overdrafts	2.2	20.6	60.2	-	6.1
UK Motor Finance	1.4	4.5	56.3	-	2.2
Other	0.1	4.0	32.6	-	0.5
Retail	0.2	2.6	14.1	2.7	0.8
Small and Medium Businesses	0.5	5.2	10.9	-	1.6
Corporate and Institutional Banking	0.4	6.4	47.9	-	1.5
Commercial Banking	0.4	5.7	20.4	-	1.6
Other		-	-	-
Total	0.3	3.1	15.9	2.7	0.9

¹ Contains centralised fair value hedge accounting adjustments.

² UK Motor Finance for Stages 1 and 2 include £187 million relating to provisions against residual values of vehicles subject to finance leasing agreements for Black Horse. These provisions are included within the calculation of coverage ratios.

CREDIT RISK (continued)

Stage 2 loans and advances to customers and expected credit loss allowance

	Up to date				1 to 30 days past due²		Over 30 days past due		Total
	PD movements		Other¹		1 to 30 days past due²		Over 30 days past due		Total
At 30 June 2024	Gross lending £m	ECL³ £m	Gross lending £m	ECL³ £m	Gross lending £m	ECL³ £m	Gross lending £m	ECL³ £m	Gross lending £m	ECL³ £m

UK mortgages	17,837	109	9,350	131	1,678	48	977	40	29,842	328
Credit cards	2,317	272	151	46	96	27	37	16	2,601	361
UK unsecured loans and overdrafts	715	135	343	47	114	33	41	16	1,213	231
UK Motor Finance	971	44	1,127	31	155	26	35	11	2,288	112
Other	109	3	308	9	59	5	46	2	522	19
Retail	21,949	563	11,279	264	2,102	139	1,136	85	36,466	1,051
Small and Medium Businesses	2,943	171	464	18	229	11	137	5	3,773	205
Corporate and Institutional Banking	2,492	119	19	1	5	-	19	-	2,535	120
Commercial Banking	5,435	290	483	19	234	11	156	5	6,308	325
Total	27,384	853	11,762	283	2,336	150	1,292	90	42,774	1,376

At 31 December 2023
UK mortgages	26,665	146	9,024	133	1,771	52	1,073	45	38,533	376
Credit cards	2,612	345	145	49	115	34	36	18	2,908	446
UK unsecured loans and overdrafts	756	148	279	46	112	34	40	16	1,187	244
UK Motor Finance	735	30	1,120	30	138	21	34	10	2,027	91
Other	125	5	295	7	52	5	53	4	525	21
Retail	30,893	674	10,863	265	2,188	146	1,236	93	45,180	1,178
Small and Medium Businesses	3,455	202	590	17	253	8	160	4	4,458	231
Corporate and Institutional Banking	3,175	208	2	-	27	3	131	1	3,335	212
Commercial Banking	6,630	410	592	17	280	11	291	5	7,793	443
Total	37,523	1,084	11,455	282	2,468	157	1,527	98	52,973	1,621

¹ Includes forbearance, client and product-specific indicators not reflected within quantitative PD assessments.

² Includes 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.

³ Expected credit loss allowance on loans and advances to customers (drawn and undrawn).

CREDIT RISK (continued)

ECL 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 appropriately 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 per cent weighting; the severe downside is weighted at 10 per cent. These assumptions can be found in note 12 on page 44 onwards.

The table below shows the Group's ECL for the probability-weighted, upside, base case, downside and severe downside scenarios, with the severe downside scenario incorporating adjustments made to CPI inflation and UK Bank Rate paths. The stage allocation for an asset is based on the overall scenario 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 being £464 million compared to £673 million at 31 December 2023.

Total ECL allowance by scenario

Probability- weighted £m		Upside £m	Base case £m	Downside £m	Severe downside £m

UK mortgages	971	387	658	1,190	3,004
Credit cards	700	583	676	772	903
Other Retail	942	855	915	990	1,139
Commercial Banking	982	735	882	1,122	1,606
Other	1	2	1	1	1
At 30 June 2024	3,596	2,562	3,132	4,075	6,653

UK mortgages	1,115	395	670	1,155	4,485
Credit cards	810	600	771	918	1,235
Other Retail	945	850	920	981	1,200
Commercial Banking	1,150	780	986	1,342	2,179
Other	1	1	1	1	1
At 31 December 2023	4,021	2,626	3,348	4,397	9,100

CREDIT RISK (continued)

Retail

• Asset quality remains strong in the Retail portfolio with resilient credit performance throughout the period. There are signs that affordability pressures are easing as inflation has fallen back and the UK bank rate has settled. However, lagged impacts from previous interest rate rises and rising unemployment remain potential headwinds

• Robust risk management remains in place, with strong affordability and indebtedness controls for both new and existing lending and a prudent risk appetite approach

• Lending strategies are under continuous review and have been proactively managed and calibrated to the latest macroeconomic outlook, with actions taken to enhance both living and housing cost assumptions in affordability assessments

• In UK mortgages, reductions in new to arrears and flows to default have been observed in the half-year and second quarter

• Unsecured portfolios continue to exhibit stable new to arrears and flow to default trends with a small increase observed in flow to default in Motor driven by a normalisation of Voluntary Terminations (VT's) as used car prices fall from historic highs

• The Retail impairment charge in the first half of 2024 was £194 million and is materially lower than the charge of £592 million for the first half of 2023. This is largely due to favourable updates to the Group's macroeconomic outlook within the base case and other scenarios, as well as the release of inflationary adjustments, given portfolio performance

• All existing IFRS 9 staging rules and triggers have been maintained across Retail from the 2023 year end. Retail customer related ECL allowance as a percentage of drawn loans and advances (coverage) decreased to 0.7 per cent (31 December 2023: 0.8 per cent)

• Favourable updates to the Group's macroeconomic outlook have reduced Stage 2 loans and advances to 9.9 per cent of the Retail portfolio (31 December 2023: 12.4 per cent), of which 91.1 per cent are up to date loans (31 December 2023: 92.4 per cent). Stage 2 ECL coverage increased to 2.9 per cent (31 December 2023: 2.6 per cent)

• Stage 3 loans and advances remain flat at 1.4 per cent of total loans and advances. Retail Stage 3 ECL coverage decreased to 12.9 per cent (31 December 2023: 14.1 per cent) due to portfolio mix changes; notably because UK mortgages require comparatively lower coverage in comparison to other Retail products due to security. Stage 3 loans and advances and Stage 3 coverage for all other Retail products excluding UK mortgages remain broadly stable

UK mortgages

• The UK mortgage portfolio is well positioned with low arrears and a strong loan to value (LTV) profile. The Group has actively improved the quality of the portfolio over recent years using robust affordability and credit controls, while the balances of higher risk legacy vintages have continued to reduce

• New to arrears and flows to default have improved in the half-year and second quarter. The Group is proactively monitoring existing mortgage customers as they reach the end of fixed rate deals with customers' immediate behaviour remaining stable

• Total loans and advances increased to £307.9 billion (31 December 2023: £307.3 billion), with a decrease in average LTV. The proportion of balances with a LTV greater than 90 per cent decreased. The average LTV of new business increased

• Favourable updates to the Group's macroeconomic outlook and stronger asset performance resulted in a net impairment release of £119 million for the first half of 2024 compared to a charge of £191 million for the first half of 2023. Total ECL coverage decreased to 0.3 per cent (31 December 2023: 0.4 per cent)

• Favourable macroeconomic updates also resulted in reductions to Stage 2 loans and advances to 9.7 per cent of the portfolio (31 December 2023: 12.5 per cent) and Stage 2 ECL coverage rising slightly to 1.1 per cent (31 December 2023: 1.0 per cent)

• Stage 3 loans and advances remain stable at 1.5 per cent of the portfolio (31 December 2023: 1.4 per cent) with increases in legacy variable rate customers reaching 90 days past due largely offset by legacy mortgage securitisation activity. Stage 3 ECL coverage decreased to 7.3 per cent (31 December 2023: 8.2 per cent), due to the favourable macroeconomic outlook

CREDIT RISK (continued)

Credit cards

• Credit cards balances increased to £16.2 billion (31 December 2023: £15.8 billion) due to continued recovery in customer spend, with no change to acquisition risk appetite

• The credit card portfolio is a prime book, with stable credit performance in the half-year and continued strong repayment rates

• Impairment charge of £115 million for the first half of 2024, is lower than the charge of £197 million in the first half of 2023, largely due to the release of ECL judgements raised to cover the risk of increased defaults from high inflation and cost of living pressures, given continued resilient portfolio performance. Total ECL coverage reduced to 4.3 per cent (31 December 2023: 5.1 per cent)

• Favourable updates to the macroeconomic outlook resulted in a reduction in Stage 2 loans and advances to 16.0 per cent of the portfolio (31 December 2023: 18.4 per cent), with Stage 2 ECL coverage reducing to 13.9 per cent (31 December 2023: 15.3 per cent)

• Resilient underlying arrears and default performance has also resulted in stable Stage 3 loans and advances at 1.8 per cent of the portfolio (31 December 2023: 1.8 per cent). Stage 3 ECL coverage is broadly stable at 45.9 per cent (31 December 2023: 45.8 per cent)

UK unsecured loans and overdrafts

• Loans and advances for personal current account and the personal loans portfolios increased to £9.7 billion (31 December 2023: £8.5 billion) largely driven by recovering market demand in loans and natural balance build following the securitisation of assets at the end of 2023

• Impairment charge of £140 million for the first half of 2024 is modestly below the charge of £160 million for the first half of 2023 again due to favourable macroeconomic updates and a more resilient underlying performance than previously anticipated. ECL coverage levels by individual stage all remain broadly stable, with Stage 2 ECL coverage at 19.0 per cent (31 December 2023: 20.6 per cent) and Stage 3 ECL coverage at 59.1 per cent (31 December 2023: 60.2 per cent)

UK Motor Finance

• The UK Motor Finance portfolio increased to £16.6 billion (31 December 2023: £15.7 billion) driven by stocking and fleet, partially offset by a softening of Retail demand in the half-year

• Updates to Residual Value (RV) and Voluntary Termination (VT) risk held against Personal Contract Purchase (PCP) and Hire Purchase (HP) lending are included within the impairment charge¹. Recent significant falls in used car prices have been reflected and absorbed by an existing management judgement within this item. As a result RV and VT provision reduced to £185 million as at 30 June 2024 (31 December 2023: £187 million)

• Impairment charge of £61 million for the first half of 2024 is higher than a charge of £43 million for the first half of 2023, which benefitted from more stable used car prices, partially driven by global supply constraints following the pandemic that have now eased

• ECL coverage levels at a total level and by individual stage remain broadly stable. Total ECL coverage at 2.2 per cent (31 December 2023: 2.2 per cent), Stage 2 ECL coverage at 4.9 per cent (31 December 2023: 4.5 per cent) and Stage 3 ECL coverage at 57.3 per cent (31 December 2023: 56.3 per cent)

Other

• Other loans and advances increased to £17.1 billion (31 December 2023: £16.6 billion). Stage 3 loans and advances remain stable at 1.0 per cent (31 December 2023: 0.9 per cent) and Stage 3 coverage reduced to 27.6 per cent (31 December 2023: 32.6 per cent)

• There was a net impairment credit of £3 million for the first half of 2024 compared to a charge of £1 million in the first half of 2023

¹ The depreciation of operating leases is included separately in the operating lease depreciation charge.

CREDIT RISK (continued)

Commercial Banking

• The Commercial portfolio credit quality remains stable and resilient, benefitting from a focused approach to credit underwriting and monitoring standards and proactively managing exposures to higher risk and vulnerable sectors

• The Group is cognisant of a number of risks and headwinds associated with the elevated interest rate environment especially in, but not limited to, sectors reliant upon consumer discretionary spend. Risks include reduced asset valuation and refinancing risk, a reduction in market liquidity impacting credit supply and pressure on both household discretionary spending and business margins

• The Group continues to closely monitor credit quality, sector and single name concentrations. Sector and credit risk appetite continue to be proactively managed to ensure clients are supported in the right way and the Group is protected

• The Group continues to provide early support to its more vulnerable customers through focused risk management via its Watchlist and Business Support framework. The Group continues to balance prudent risk appetite with ensuring support for financially viable clients

Impairment

• There was a net impairment credit of £69 million in the first half of 2024, compared to a net impairment charge of £90 million in the first half of 2023. Commercial Banking has benefitted from a one-off release from loss rates used in the model, while observing a low charge on new and existing Stage 3 clients

• ECL allowances decreased in the year to £974 million at 30 June 2024 (31 December 2023: £1,137 million). This was driven by the one-off release noted above, as well as a revised approach to modelling the multiple economic scenarios and a more favourable outlook across multiple economic indicators

• Stage 2 loans and advances decreased to £6,308 million (31 December 2023: £7,793 million), largely as a result of improvements in the Group's macroeconomic outlook, with 93.8 per cent of Stage 2 balances up to date (31 December 2023: 92.7 per cent). Stage 2 as a proportion of total loans and advances to customers decreased to 8.7 per cent (31 December 2023: 10.6 per cent). Stage 2 ECL coverage was lower at 5.2 per cent (31 December 2023: 5.7 per cent) with the decrease in coverage largely a result of the change in the forward-looking multiple economic scenarios

• Stage 3 loans and advances were broadly stable at £2,045 million (31 December 2023: £2,058 million) and as a proportion of total loans and advances to customers, flat at 2.8 per cent (31 December 2023: 2.8 per cent). Stage 3 ECL coverage reduced to 19.1 per cent (31 December 2023: 20.4 per cent)

CREDIT RISK (continued)

Commercial Banking UK Real Estate

• Commercial Banking UK Real Estate committed drawn lending stood at £9.5 billion at May 2024 (net of £3.1 billion exposures subject to protection through Significant Risk Transfer (SRT) securitisations). This compares to £9.7 billion at 31 December 2023 (net of £3.6 billion subject to SRT securitisations). In addition there are undrawn lending facilities of £2.2 billion (31 December 2023: £2.8 billion) to predominantly investment grade rated corporate customers

• The Group classifies Real Estate as exposure which is directly supported by cash flows from property activities (as opposed to trading activities, such as hotels, care homes and housebuilders). Exposures of £6.6 billion to social housing providers are also excluded (31 December 2023: £6.7 billion)

• Despite some headwinds, including the impact of elevated interest rates, the portfolio continues to remain well-positioned and proactively managed with conservative LTVs, good levels of interest cover and appropriate risk mitigants in place

• Overall performance of the portfolio has remained resilient. The Group has seen improvement within this sector, with a decrease in cases in its more closely monitored Watchlist category and limited flow into Business Support

• Lending continues to be heavily weighted towards investment real estate (c.90 per cent) rather than development. Of these investment exposures c.91 per cent have an LTV of less than 70 per cent, with an average LTV of 46 per cent. The average interest cover ratio was 3.2 times, with 74 per cent having interest cover of above 2 times. In SME, LTV at origination has been typically limited to c.55 per cent, in the context of prudent repayment cover criteria (including notional base rate stress)

• The portfolio is well diversified with no speculative commercial development lending (defined as property not pre-sold or pre-let at a level to fully repay the debt or generate sufficient income to meet the minimum interest cover requirements). Approximately 49 per cent of exposures relate to commercial real estate, including c.13 per cent secured by office assets, c.12 per cent by retail assets and c.12 per cent by industrial assets. Approximately 49 per cent of the portfolio relates to residential

• Recognising this is a cyclical sector, total (gross and net) and asset type quantum caps are in place to control origination and exposure, including several asset type categories. Focus remains on the UK market and new business has been written in line with a prudent risk appetite criteria including conservative LTVs, strong quality of income and proven management teams. Development lending criteria also includes maximum loan to gross development value and maximum loan to cost, with funding typically only released against completed work, as confirmed by the Group's monitoring quantity surveyor

• Use of SRT securitisations also acts as a risk mitigant in this portfolio. Run-off of these is carefully managed and sequenced

•

LIQUIDITY RISK

The Group has maintained its strong funding and liquidity position with a loan to deposit ratio of 98 per cent as at 30 June 2024 (31 December 2023: 98 per cent). Total wholesale funding decreased to £66.0 billion as at 30 June 2024 (31 December 2023: £70.4 billion), driven by a reduction in money market funding and covered bond maturities. The Group maintains access to diverse sources and tenors of funding.

The Group's liquid assets continue to exceed the regulatory minimum and internal risk appetite, with a liquidity coverage ratio (LCR)¹ of 134 per cent (based on a monthly rolling average over the previous 12 months) as at 30 June 2024 (31 December 2023: 133 per cent). The net stable funding ratio is strong at 125 per cent as at 30 June 2024 (31 December 2023: 125 per cent).

The Group's credit ratings continue to reflect the strength of its business model and balance sheet. The rating agencies continue to monitor the impact of economic conditions and elevated rates for the UK banking sector. The strength of the Group's management and franchise, along with its robust financial performance, capital and funding position, are reflected in the Group's strong ratings.

¹ Based on a monthly rolling simple average over the previous 12 months.

Lloyds Bank Group funding requirements and sources

	At 30 Jun 2024 £bn	At 31 Dec 2023 £bn	Change %

Lloyds Bank Group funding position
Cash and balances at central banks	49.2	57.9	(15)
Loans and advances to banks	7.1	8.8	(19)
Loans and advances to customers	435.3	433.1	1
Reverse repurchase agreements - non-trading	42.3	32.8	29
Debt securities at amortised cost	12.6	12.5	1
Financial assets at fair value through other comprehensive income	27.5	27.3	1
Other assets¹	34.4	33.0	4
Total Lloyds Bank Group assets	608.4	605.4
Less other liabilities¹	(16.6)	(12.6)	(32)
Funding requirements	591.8	592.8

Customer deposits	446.2	442.0	1
Wholesale funding²	66.0	70.4	(6)
Repurchase agreements - non-trading	7.7	7.7
Term Funding Scheme with additional incentives for SMEs (TFSME)	30.0	30.0
Deposits from fellow Lloyds Banking Group undertakings	2.3	2.3
Total equity	39.6	40.4	(2)
Funding sources	591.8	592.8

¹ Other assets and other liabilities include the fair value of derivative assets and liabilities.

² Lloyds Bank Group's definition of wholesale funding aligns with that used by other international market participants; including bank deposits, debt securities in issue and subordinated liabilities. Excludes balances relating to margins of £0.4 billion (31 December 2023: £0.6 billion).

FUNDING AND LIQUIDITY RISK (continued)

Reconciliation of Group funding to the balance sheet

At 30 June 2024	Included in funding analysis £bn	Cash collateral received £bn	Fair value and other accounting methods £bn	Balance sheet £bn

Deposits from banks	2.5	0.4	0.1	3.0
Debt securities in issue at amortised cost	55.3	-	(6.6)	48.7
Subordinated liabilities	8.2	-	(1.4)	6.8
Total wholesale funding	66.0	0.4
Customer deposits	442.0	-	4.2	446.2
Total	508.0	0.4

At 31 December 2023
Deposits from banks	2.8	0.6	0.2	3.6
Debt securities in issue at amortised cost	59.3	-	(6.9)	52.4
Subordinated liabilities	8.3	-	(1.4)	6.9
Total wholesale funding	70.4	0.6
Customer deposits	442.0	-	-	442.0
Total	512.4	0.6

Analysis of total wholesale funding by residual maturity

	Up to 1 month £bn	1 to 3 months £bn	3 to 6 months £bn	6 to 9 months £bn	9 to 12 months £bn	1 to 2 years £bn	2 to 5 years £bn	Over five years £bn	Total at 30 Jun 2024 £bn	Total at 31 Dec 2023 £bn

Deposits from banks	1.3	0.4	0.4	0.2	0.2	-	-	-	2.5	2.8
Debt securities in issue:
Senior unsecured notes issued	1.3	0.2	1.9	2.6	1.6	3.1	7.5	12.1	30.3	29.5
Covered bonds	-	-	0.5	2.0	0.1	1.7	6.5	0.9	11.7	14.1
Commercial paper	1.5	2.5	1.5	1.3	0.1	-	-	-	6.9	8.4
Certificates of deposit issued	0.1	0.6	0.4	0.1	0.1	-	-	-	1.3	3.1
Securitisation notes	-	-	-	0.1	-	0.1	4.3	0.6	5.1	4.2
	2.9	3.3	4.3	6.1	1.9	4.9	18.3	13.6	55.3	59.3
Subordinated liabilities	-	-	-	0.6	0.3	0.5	2.2	4.6	8.2	8.3
Total wholesale funding¹	4.2	3.7	4.7	6.9	2.4	5.4	20.5	18.2	66.0	70.4

¹ Excludes balances relating to margins of £0.4 billion (31 December 2023: £0.6 billion).

FUNDING AND LIQUIDITY RISK (continued)

Analysis of term issuance in half-year to 30 June 2024

	Sterling £bn	US Dollar £bn	Euro £bn	Other currencies £bn	Total £bn

Securitisation¹	0.9	-	-	-	0.9
Covered bonds	-	-	-	-	-
Senior unsecured notes	-	3.0	0.8	0.5	4.3
Additional tier 1	-	-	-	-	-
Total issuance	0.9	3.0	0.8	0.5	5.2

¹ Includes significant risk transfer securitisations.

Liquidity portfolio

At 30 June 2024, the Group had £108.4 billion of highly liquid unencumbered LCR eligible assets, based on a monthly rolling average over the previous 12 months post any liquidity haircuts (31 December 2023: £108.7 billion). These assets are available to meet cash and collateral outflows and regulatory requirements.

The Group also has a significant amount of non-LCR eligible liquid assets which are eligible for use in a range of central bank or similar facilities. Future use of such facilities will be based on prudent liquidity management and economic considerations, having regard for external market conditions.

LCR eligible assets

	Average
	2024¹ £bn	2023¹ £bn	Change %

Cash and central bank reserves	52.4	63.3	(17)
High quality government/MDB/agency bonds²	48.1	38.4	25
High quality covered bonds	2.9	2.7	7
Level 1	103.4	104.4	(1)
Level 2³	5.0	4.3	16
Total LCR eligible assets	108.4	108.7

¹ Based on 12 months rolling simple average to 30 June 2024 (2023: 31 December 2023). Eligible assets are calculated as a simple average of month-end observations over the previous 12 months post any liquidity haircuts.

² Designated multilateral development bank (MDB).

³ Includes Level 2A and Level 2B.

STATUTORY INFORMATION

Condensed consolidated half-year financial statements (unaudited)
Condensed consolidated income statement (unaudited)		22
Condensed consolidated statement of comprehensive income (unaudited)		23
Condensed consolidated balance sheet (unaudited)		24
Condensed consolidated statement of changes in equity (unaudited)		25
Condensed consolidated cash flow statement (unaudited)		28

Notes to the condensed consolidated half-year financial statements (unaudited)
1	Basis of preparation and accounting policies	29
2	Critical accounting judgements and key sources of estimation uncertainty	30
3	Segmental analysis	30
4	Net fee and commission income	31
5	Operating expenses	31
6	Retirement benefit obligations	32
7	Impairment	33
8	Tax	33
9	Fair values of financial assets and liabilities	34
10	Loans and advances to customers	39
11	Credit quality of loans and advances to customers	41
12	Allowance for expected credit losses	44
13	Debt securities in issue	52
14	Provisions	53
15	Dividends on ordinary shares	54
16	Related party transactions	55
17	Contingent liabilities, commitments and guarantees	55

CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)

	Note	Half-year to 30 Jun 2024 £m	Half-year to 30 Jun 2023 £m

Interest income		13,980	11,802
Interest expense		(7,758)	(4,793)
Net interest income		6,222	7,009
Fee and commission income		1,186	1,196
Fee and commission expense		(883)	(550)
Net fee and commission income	4	303	646
Net trading income		331	107
Other operating income		1,520	1,278
Other income		2,154	2,031
Total income		8,376	9,040
Operating expenses	5	(5,436)	(4,829)
Impairment	7	(122)	(681)
Profit before tax		2,818	3,530
Tax expense	8	(811)	(940)
Profit for the period		2,007	2,590

Profit attributable to ordinary shareholders		1,824	2,417
Profit attributable to other equity holders		172	161
Profit attributable to equity holders		1,996	2,578
Profit attributable to non-controlling interests		11	12
Profit for the period		2,007	2,590

The accompanying notes are an integral part of the condensed consolidated half-year financial statements.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

	Half-year to 30 Jun 2024 £m	Half-year to 30 Jun 2023 £m

Profit for the period	2,007	2,590
Other comprehensive income
Items that will not subsequently be reclassified to profit or loss:
Post-retirement defined benefit scheme remeasurements:
Remeasurements before tax	(351)	(119)
Tax	93	27
	(258)	(92)
Gains and losses attributable to own credit risk:
Losses before tax	(86)	(85)
Tax	24	24
	(62)	(61)
Items that may subsequently be reclassified to profit or loss:
Movements in revaluation reserve in respect of debt securities held at fair value through other comprehensive income:
Change in fair value	105	157
Income statement transfers in respect of disposals	(4)	67
Income statement transfers in respect of impairment	(2)	(2)
Tax	(27)	(61)
	72	161
Movements in cash flow hedging reserve:
Effective portion of changes in fair value taken to other comprehensive income	(1,435)	(1,287)
Net income statement transfers	1,072	616
Tax	102	188
	(261)	(483)
Movements in foreign currency translation reserve:
Currency translation differences (tax: £nil)	(39)	(58)
Transfers to income statement (tax: £nil)	-	-
	(39)	(58)
Total other comprehensive loss for the period, net of tax	(548)	(533)
Total comprehensive income for the period	1,459	2,057

Total comprehensive income attributable to ordinary shareholders	1,276	1,884
Total comprehensive income attributable to other equity holders	172	161
Total comprehensive income attributable to equity holders	1,448	2,045
Total comprehensive income attributable to non-controlling interests	11	12
Total comprehensive income for the period	1,459	2,057

The accompanying notes are an integral part of the condensed consolidated half-year financial statements.

CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)

	Note	At 30 Jun 2024 £m	At 31 Dec 2023 £m

Assets
Cash and balances at central banks		49,154	57,909
Financial assets at fair value through profit or loss	9	2,265	1,862
Derivative financial instruments		2,688	3,165
Loans and advances to banks		7,067	8,810
Loans and advances to customers	10	435,310	433,124
Reverse repurchase agreements		42,273	32,751
Debt securities		12,619	12,546
Due from fellow Lloyds Banking Group undertakings		789	840
Financial assets at amortised cost		498,058	488,071
Financial assets at fair value through other comprehensive income	9	27,521	27,337
Goodwill and other intangible assets		5,870	5,837
Current tax recoverable		846	1,026
Deferred tax assets		4,622	4,636
Retirement benefit assets	6	3,379	3,624
Other assets		13,959	11,938
Total assets		608,362	605,405

Liabilities
Deposits from banks		2,973	3,557
Customer deposits		446,165	441,953
Repurchase agreements		37,848	37,702
Due to fellow Lloyds Banking Group undertakings		5,168	2,932
Financial liabilities at fair value through profit or loss	9	4,909	5,255
Derivative financial instruments		3,980	4,307
Notes in circulation		1,766	1,392
Debt securities in issue at amortised cost	13	48,725	52,449
Other liabilities		8,468	6,260
Retirement benefit obligations	6	130	136
Current tax liabilities		28	23
Deferred tax liabilities		146	157
Provisions	14	1,653	1,916
Subordinated liabilities		6,764	6,935
Total liabilities		568,723	564,974

Equity
Share capital		1,574	1,574
Share premium account		600	600
Other reserves		2,167	2,395
Retained profits		30,211	30,786
Ordinary shareholders' equity		34,552	35,355
Other equity instruments		5,018	5,018
Total equity excluding non-controlling interests		39,570	40,373
Non-controlling interests		69	58
Total equity		39,639	40,431
Total equity and liabilities		608,362	605,405

The accompanying notes are an integral part of the condensed consolidated half-year financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

	Attributable to ordinary shareholders
	Share capital and premium £m	Other reserves £m	Retained profits £m	Total £m	Other equity instruments £m		Non- controlling interests £m		Total £m

At 1 January 2024	2,174	2,395	30,786	35,355		5,018		58	40,431
Comprehensive income
Profit for the period	-	-	1,824	1,824		172		11	2,007
Other comprehensive income
Post-retirement defined benefit scheme remeasurements, net of tax	-	-	(258)	(258)		-		-	(258)
Movements in revaluation reserve in respect of financial assets held at fair value through other comprehensive income, net of tax:
Debt securities	-	72	-	72		-		-	72
Gains and losses attributable to own credit risk, net of tax	-	-	(62)	(62)		-		-	(62)
Movements in cash flow hedging reserve, net of tax	-	(261)	-	(261)		-		-	(261)
Movements in foreign currency translation reserve, net of tax	-	(39)	-	(39)		-		-	(39)
Total other comprehensive loss	-	(228)	(320)	(548)		-		-	(548)
Total comprehensive (loss) income¹	-	(228)	1,504	1,276		172		11	1,459
Transactions with owners
Dividends	-	-	(2,140)	(2,140)		-		-	(2,140)
Distributions on other equity instruments	-	-	-	-		(172)		-	(172)
Issue of other equity instruments	-	-	-	-		-		-	-
Capital contributions received	-	-	61	61		-		-	61
Return of capital contributions	-	-	-	-		-		-	-
Total transactions with owners	-	-	(2,079)	(2,079)		(172)		-	(2,251)
At 30 June 2024²	2,174	2,167	30,211	34,552		5,018		69	39,639

¹ Total comprehensive income attributable to owners of the parent was £1,448 million.

² Total equity attributable to owners of the parent was £39,570 million.

The accompanying notes are an integral part of the condensed consolidated half-year financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) (continued)

	Attributable to ordinary shareholders
	Share capital and premium £m	Other reserves £m	Retained profits £m	Total £m	Other equity instruments £m	Non- controlling interests £m	Total £m

At 1 January 2023	2,174	743	31,792	34,709	4,268	82	39,059
Comprehensive income
Profit for the period	-	-	2,417	2,417	161	12	2,590
Other comprehensive income
Post-retirement defined benefit scheme remeasurements, net of tax	-	-	(92)	(92)	-	-	(92)
Movements in revaluation reserve in respect of financial assets held at fair value through other comprehensive income, net of tax:
Debt securities	-	161	-	161	-	-	161
Gains and losses attributable to own credit risk, net of tax	-	-	(61)	(61)	-	-	(61)
Movements in cash flow hedging reserve, net of tax	-	(483)	-	(483)	-	-	(483)
Movements in foreign currency translation reserve, net of tax	-	(58)	-	(58)	-	-	(58)
Total other comprehensive loss	-	(380)	(153)	(533)	-	-	(533)
Total comprehensive (loss) income¹	-	(380)	2,264	1,884	161	12	2,057
Transactions with owners
Dividends	-	-	(1,900)	(1,900)	-	(30)	(1,930)
Distributions on other equity instruments	-	-	-	-	(161)	-	(161)
Issue of other equity instruments	-	-	(5)	(5)	750	-	745
Capital contributions received	-	-	94	94	-	-	94
Return of capital contributions	-	-	-	-	-	-	-
Total transactions with owners	-	-	(1,811)	(1,811)	589	(30)	(1,252)
At 30 June 2023²	2,174	363	32,245	34,782	5,018	64	39,864

¹ Total comprehensive income attributable to owners of the parent was £2,045 million.

² Total equity attributable to owners of the parent was £39,800 million.

The accompanying notes are an integral part of the condensed consolidated half-year financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) (continued)

	Attributable to ordinary shareholders
	Share capital and premium £m	Other reserves £m	Retained profits £m	Total £m	Other equity instruments £m	Non- controlling interests £m	Total £m

At 1 July 2023	2,174	363	32,245	34,782	5,018	64	39,864
Comprehensive income
Profit for the period	-	-	2,441	2,441	173	3	2,617
Other comprehensive income
Post-retirement defined benefit scheme remeasurements, net of tax	-	-	(1,113)	(1,113)	-	-	(1,113)
Movements in revaluation reserve in respect of financial assets held at fair value through other comprehensive income, net of tax:
Debt securities	-	(90)	-	(90)	-	-	(90)
Gains and losses attributable to own credit risk, net of tax	-	-	(107)	(107)	-	-	(107)
Movements in cash flow hedging reserve, net of tax	-	2,097	-	2,097	-	-	2,097
Movements in foreign currency translation reserve, net of tax	-	25	-	25	-	-	25
Total other comprehensive income (loss)	-	2,032	(1,220)	812	-	-	812
Total comprehensive income¹	-	2,032	1,221	3,253	173	3	3,429
Transactions with owners
Dividends	-	-	(2,800)	(2,800)	-	(9)	(2,809)
Distributions on other equity instruments	-	-	-	-	(173)	-	(173)
Issue of other equity instruments	-	-	-	-	-	-	-
Capital contributions received	-	-	121	121	-	-	121
Return of capital contributions	-	-	(1)	(1)	-	-	(1)
Total transactions with owners	-	-	(2,680)	(2,680)	(173)	(9)	(2,862)
At 31 December 2023²	2,174	2,395	30,786	35,355	5,018	58	40,431

¹ Total comprehensive income attributable to owners of the parent was £3,426 million.

² Total equity attributable to owners of the parent was £40,373 million.

The accompanying notes are an integral part of the condensed consolidated half-year financial statements.

CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)

	Half-year to 30 Jun 2024 £m	Half-year to 30 Jun 2023 £m

Cash flows from operating activities
Profit before tax	2,818	3,530
Adjustments for:
Change in operating assets	(11,747)	8,828
Change in operating liabilities	2,077	(1,869)
Non-cash and other items	2,270	1,897
Net tax paid	(415)	(785)
Net cash (used in) provided by operating activities	(4,997)	11,601
Cash flows from investing activities
Purchase of financial assets	(5,800)	(3,847)
Proceeds from sale and maturity of financial assets	5,261	3,654
Purchase of fixed assets	(2,636)	(3,220)
Proceeds from sale of fixed assets	604	506
Net cash used in investing activities	(2,571)	(2,907)
Cash flows from financing activities
Dividends paid to ordinary shareholders	(2,140)	(1,900)
Distributions on other equity instruments	(172)	(161)
Dividends paid to non-controlling interests	-	(30)
Interest paid on subordinated liabilities	(194)	(198)
Proceeds from issue of other equity instruments	-	745
Repayment of subordinated liabilities	-	(265)
Borrowings from parent company	3,168	389
Repayments of borrowings to parent company	(1,001)	(945)
Interest paid on borrowings from parent company	(198)	(214)
Net cash used in financing activities	(537)	(2,579)
Effects of exchange rate changes on cash and cash equivalents	(66)	(70)
Change in cash and cash equivalents	(8,171)	6,045
Cash and cash equivalents at beginning of period	66,538	75,201
Cash and cash equivalents at end of period	58,367	81,246

The accompanying notes are an integral part of the condensed consolidated half-year financial statements.

Cash and cash equivalents comprise cash and non-mandatory balances with central banks and amounts due from banks with an original maturity of less than three months.

NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED)

Note 1: Basis of preparation and accounting policies

These condensed consolidated half-year financial statements as at and for the period to 30 June 2024 have been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority (FCA) and with International Accounting Standard 34 (IAS 34), Interim Financial Reporting as adopted by the United Kingdom and comprise the results of Lloyds Bank plc (the Bank) together with its subsidiaries (the Group). They do not include all of the information required for full annual financial statements and should be read in conjunction with the Group's consolidated financial statements as at and for the year ended 31 December 2023 which complied with international accounting standards in conformity with the requirements of the Companies Act 2006 and were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Copies of the 2023 annual report and accounts are available on the Lloyds Banking Group's website and are also available upon request from Investor Relations, Lloyds Banking Group plc, 25 Gresham Street, London EC2V 7HN.

The directors consider that it is appropriate to continue to adopt the going concern basis in preparing these condensed consolidated half-year financial statements. In reaching this assessment, the directors have taken into account the uncertainties affecting the UK economy and their potential effects upon the Group's performance and projected funding and capital position; the impact of further stress scenarios has also been considered. On this basis, the directors are satisfied that the Group will maintain adequate levels of funding and capital for the foreseeable future.

The Group's accounting policies are consistent with those applied by the Group in its financial statements for the year ended 31 December 2023 and there have been no changes in the Group's methods of computation.

The IASB has issued a number of minor amendments to IFRSs that are relevant to the Group effective 1 January 2024, including IFRS 16 Lease Liability in a Sale and Leaseback, IAS 1 Non-current Liabilities with Covenants, and IAS 1 Classification of Liabilities as Current or Non-current. These amendments have not had a significant impact on the Group.

Future accounting developments

The IASB has issued Amendments to the Classification and Measurement of Financial Instruments (IFRS 9 and IFRS 7) which is effective 1 January 2026 and IFRS 19 Subsidiaries without Public Accountability: Disclosures which is effective 1 January 2027. Neither the amendments nor IFRS 19 are expected to have a significant impact on the Group. The IASB has also issued IFRS 18 Primary Financial Statements which is effective 1 January 2027. The standard includes no measurement changes, and the Group is currently assessing the impact of this standard on its income statement presentation.

The Bank's ultimate parent undertaking and controlling party is Lloyds Banking Group plc which is incorporated in Scotland. Lloyds Banking Group plc has published consolidated accounts for the year to 31 December 2023 and copies may be obtained from Investor Relations, Lloyds Banking Group plc, 25 Gresham Street, London EC2V 7HN and are available for download from www.lloydsbankinggroup.com.

The financial information contained in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 (the Act). The statutory accounts for the year ended 31 December 2023 were approved by the directors on 29 February 2024 and were delivered to the Registrar of Companies on 30 March 2024. The auditors' report on those accounts was unqualified and did not include a statement under sections 498(2) (accounting records or returns inadequate or accounts not agreeing with records and returns) or 498(3) (failure to obtain necessary information and explanations) of the Act.

NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED) (continued)

Note 2: Critical accounting judgements and key sources of estimation uncertainty

The preparation of the Group's financial statements in accordance with IFRS requires management to make judgements, estimates and assumptions in applying the accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Due to the inherent uncertainty in making estimates, actual results reported in future periods may be based upon amounts which differ from these estimates. Estimates, judgements and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In preparing the financial statements, the Group has considered the impact of climate-related risks on its financial position and performance. While the effects of climate change represent a source of uncertainty, the Group does not consider there to be a material impact on its judgements and estimates from the physical, transition and other climate-related risks in the short-term.

The Group's significant judgements, estimates and assumptions are unchanged compared to those disclosed in note 3 of the Group's 2023 financial statements. Further information on the critical accounting judgements and key sources of estimation uncertainty for the allowance for expected credit losses is set out in note 12.

Note 3: Segmental analysis

The Group provides a wide range of banking and financial services in the UK and in certain locations overseas. The Group Executive Committee (GEC) of Lloyds Bank plc remains the "chief operating decision maker" (as defined by IFRS 8 Operating Segments) for the Group.

Half-year to 30 June 2024	Retail £m	Commercial Banking £m		Other £m	Total £m

Net interest income	4,429		1,636	157	6,222
Other income	837		521	796	2,154
Total income	5,266		2,157	953	8,376
Operating expenses	(3,563)		(1,149)	(724)	(5,436)
Impairment (charge) credit	(195)		69	4	(122)
Profit before tax	1,508		1,077	233	2,818

External income (expense)	6,254		2,829	(707)	8,376
Inter-segment (expense) income	(988)		(672)	1,660	-
Segment income	5,266		2,157	953	8,376

Half-year to 30 June 2023	Retail £m	Commercial Banking £m	Other £m	Total £m

Net interest income	5,063	1,881	65	7,009
Other income	1,005	513	513	2,031
Total income	6,068	2,394	578	9,040
Operating expenses	(3,009)	(1,063)	(757)	(4,829)
Impairment (charge) credit	(592)	(90)	1	(681)
Profit (loss) before tax	2,467	1,241	(178)	3,530

External income (expense)	6,427	2,904	(291)	9,040
Inter-segment (expense) income	(359)	(510)	869	-
Segment income	6,068	2,394	578	9,040

NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED) (continued)

Note 3: Segmental analysis (continued)

	Segment external assets		Segment external liabilities
	At 30 Jun 2024 £m	At 31 Dec 2023 £m	At 30 Jun 2024 £m	At 31 Dec 2023 £m

Retail	380,653	376,589	319,063	313,232
Commercial Banking	86,004	90,301	136,393	138,835
Other	141,705	138,515	113,267	112,907
Total Group	608,362	605,405	568,723	564,974

Note 4: Net fee and commission income

	Half-year to 30 Jun 2024 £m	Half-year to 30 Jun 2023 £m

Fee and commission income:
Current accounts	312	308
Credit and debit card fees	629	614
Commercial banking and treasury fees	92	93
Factoring	35	39
Other fees and commissions	118	142
Total fee and commission income	1,186	1,196
Fee and commission expense	(883)	(550)
Net fee and commission income	303	646

Current account and credit and debit card fees principally arise in Retail; commercial banking, treasury and factoring fees arise in Commercial Banking.

Note 5: Operating expenses

	Half-year to 30 Jun 2024 £m	Half-year to 30 Jun 2023 £m

Staff costs	2,287	1,934
Premises and equipment costs	182	167
Depreciation and amortisation	1,659	1,310
Other	1,308	1,418
Total operating expenses	5,436	4,829

NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED) (continued)

Note 6: Retirement benefit obligations

The Group's post-retirement defined benefit scheme obligations are comprised as follows:

	At 30 Jun 2024 £m	At 31 Dec 2023 £m

Defined benefit pension schemes:
Present value of funded obligations	(28,633)	(30,201)
Fair value of scheme assets	31,924	33,733
Net pension scheme asset	3,291	3,532
Other post-retirement schemes	(42)	(44)
Total amounts recognised in the balance sheet	3,249	3,488

Recognised on the balance sheet as:
Retirement benefit assets	3,379	3,624
Retirement benefit obligations	(130)	(136)
Total amounts recognised in the balance sheet	3,249	3,488

Movements in the Group's net post-retirement defined benefit scheme asset during the period were as follows:

	£m

Asset at 1 January 2024	3,488
Income statement credit	21
Employer contributions	91
Remeasurement	(351)
Asset at 30 June 2024	3,249

The principal assumptions used in the valuations of the defined benefit pension schemes were as follows:

	At 30 Jun 2024 %	At 31 Dec 2023 %

Discount rate	5.18	4.70
Rate of inflation:
Retail Price Index (RPI)	3.08	2.96
Consumer Price Index (CPI)	2.67	2.47
Rate of salary increases	0.00	0.00
Weighted-average rate of increase for pensions in payment	2.90	2.73

NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED) (continued)

Note 7: Impairment

	Half-year to 30 Jun 2024 £m	Half-year to 30 Jun 2023 £m

Loans and advances to banks	(4)	(2)
Loans and advances to customers	169	678
Debt securities	(1)	(1)
Financial assets held at amortised cost	164	675
Financial assets at fair value through other comprehensive income	(2)	(1)
Loan commitments and financial guarantees	(40)	7
Total impairment	122	681

There was a £10 million charge in respect of residual value impairment and voluntary terminations within the Group's UK Motor Finance business in the current period (half-year to 30 June 2023: £27 million).

Note 8: Tax

In accordance with IAS 34, the Group's income tax expense for the half-year to 30 June 2024 is based on the best estimate of the weighted-average annual income tax rate expected for the full financial year. The tax effects of one-off items are not included in the weighted-average annual income tax rate, but are recognised in the relevant period.

An explanation of the relationship between tax expense and accounting profit is set out below:

	Half-year to 30 Jun 2024 £m	Half-year to 30 Jun 2023 £m

Profit before tax	2,818	3,530
UK corporation tax thereon at 25.0 per cent (2023: 23.5 per cent)	(704)	(830)
Impact of surcharge on banking profits	(78)	(130)
Non-deductible costs: conduct charges	4	(2)
Other non-deductible costs	(98)	(40)
Non-taxable income	33	1
Tax relief on coupons on other equity instruments	42	38
Tax-exempt gains/(losses) on disposals	-	22
Remeasurement of deferred tax due to rate changes	3	(1)
Differences in overseas tax rates	(3)	(1)
Adjustments in respect of prior years	(10)	3
Tax expense	(811)	(940)

NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED) (continued)

Note 9: Fair values of financial assets and liabilities

The valuations of financial instruments have been classified into three levels according to the quality and reliability of information used to determine those fair values. Note 16 to the Group's financial statements for the year ended 31 December 2023 details the definitions of the three levels in the fair value hierarchy.

Financial instruments classified as financial assets at fair value through profit or loss, derivative financial instruments, financial assets at fair value through other comprehensive income and financial liabilities at fair value through profit or loss are recognised at fair value.

The Group manages valuation adjustments for its derivative exposures on a net basis; the Group determines their fair values on the basis of their net exposures. In all other cases, fair values of financial assets and liabilities measured at fair value are determined on the basis of their gross exposures.

The following tables provide an analysis of the financial assets and liabilities of the Group that are carried at fair value in the Group's consolidated balance sheet, grouped into levels 1 to 3 based on the degree to which the fair value is observable. There were no significant transfers between level 1 and level 2 during the period.

Financial assets	Level 1 £m	Level 2 £m	Level 3 £m	Total £m

At 30 June 2024
Financial assets at fair value through profit or loss:
Loans and advances to customers	-	1,784	282	2,066
Equity shares	195	-	4	199
Total financial assets at fair value through profit or loss	195	1,784	286	2,265
Financial assets at fair value through other comprehensive income:
Debt securities	14,038	13,432	51	27,521
Equity shares	-	-	-	-
Total financial assets at fair value through other comprehensive income	14,038	13,432	51	27,521
Derivative financial instruments	-	2,688	-	2,688
Total financial assets carried at fair value	14,233	17,904	337	32,474

At 31 December 2023
Financial assets at fair value through profit or loss:
Loans and advances to customers	-	1,391	266	1,657
Equity shares	201	-	4	205
Total financial assets at fair value through profit or loss	201	1,391	270	1,862
Financial assets at fair value through other comprehensive income:
Debt securities	15,025	12,259	52	27,336
Equity shares	-	-	1	1
Total financial assets at fair value through other comprehensive income	15,025	12,259	53	27,337
Derivative financial instruments	-	3,165	-	3,165
Total financial assets carried at fair value	15,226	16,815	323	32,364

NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED) (continued)

Note 9: Fair values of financial assets and liabilities (continued)

Financial liabilities	Level 1 £m	Level 2 £m	Level 3 £m	Total £m

At 30 June 2024
Financial liabilities at fair value through profit or loss	-	4,886	23	4,909
Derivative financial instruments	-	3,832	148	3,980
Total financial liabilities carried at fair value	-	8,718	171	8,889

At 31 December 2023
Financial liabilities at fair value through profit or loss	-	5,232	23	5,255
Derivative financial instruments	-	4,168	139	4,307
Total financial liabilities carried at fair value	-	9,400	162	9,562

Valuation control framework

Key elements of the valuation control framework include model validation (incorporating pre-trade and post-trade testing), product implementation review and independent price verification. The framework covers processes for all 3 levels in the fair value hierarchy. Formal committees meet quarterly to discuss and approve valuations in more judgemental areas.

Transfers into and out of level 3 portfolios

Transfers out of level 3 portfolios arise when inputs that could have a significant impact on the instrument's valuation become market observable; conversely, transfers into the portfolios arise when sources of data cease to be observable.

Valuation methodology

For level 2 and level 3 portfolios, there is no significant change to the valuation methodology (techniques and inputs) disclosed in the Group's financial statements for the year ended 31 December 2023 applied to these portfolios.

Movements in level 3 portfolio

The tables below analyse movements in the level 3 financial assets portfolio.

	Financial assets at fair value through profit or loss £m	Financial assets at fair value through other comprehensive income £m	Total financial assets carried at fair value £m

At 1 January 2024	270	53	323
Exchange and other adjustments	-	(1)	(1)
Gains recognised in the income statement within other income	26	-	26
Purchases/increases to customer loans	6	-	6
Sales/repayments of customer loans	(16)	(1)	(17)
At 30 June 2024	286	51	337
Gains recognised in the income statement, within other income, relating to the change in fair value of those assets held at 30 June 2024	26	-	26