Glossary

Helpful A-Z glossary listing key Lloyds Banking Group terms and their definition

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L

Liquidity Coverage Ratio (LCR)

The ratio of the stock of high quality liquid assets to expected net cash outflows over the following 30 days. High quality liquid assets should be unencumbered, liquid in markets during a time of stress and ideally, be central bank eligible.

Liquidity risk

The risk that the Group has insufficient financial resources to meet its commitments as they fall due, or can only secure them at excessive cost.

Loan to deposit ratio

The ratio of loans and advances to customers net of allowance for impairment losses and excluding reverse repurchase agreements divided by customer deposits excluding repurchase agreements.

Loan-to-value ratio (LTV)

The loan-to-value ratio is a mathematical calculation which expresses the amount of a mortgage balance outstanding as a percentage of the total appraised value of the property. A high LTV indicates that there is less value to protect the lender against house price falls or increases in the loan if repayments are not made and interest is added to the outstanding balance of the loan.

Loans past due

Loans are past due when a counterparty has failed to make a payment when contractually due.

Loss emergence period

The loss emergence period is the estimated period between impairment occurring and the loss being specifically identified and evidenced by the establishment of an appropriate impairment allowance.

Loss Given Default

The estimated loss that will arise if a customer defaults. It is calculated after taking account of credit risk mitigation and includes the cost of recovery.