Our Chief Financial Officer William Chalmers reflects on Lloyds Banking Group’s Q3 results and takes stock of our strategy to Help Britain Recover.

William Chalmers
Chief Financial Officer
28 October 2021
3 min read

Today we’ve announced our latest financial results and I’m pleased to say that we’ve seen strong progress with our strategy. I’d like to highlight some of Lloyds Banking Group’s key successes from today’s Q3 announcement that demonstrate how we’re Helping Britain Recover.

How we’re Helping Britain Recover

In the first nine months of 2021 we exceeded our full-year target for lending to first-time buyers, having delivered £12.8 billion of lending against a target of £10 billion. This meant we have supported 62,000 first-time buyers to purchase homes so far this year. We are also expanding the availability of affordable and quality homes by increasing our funding to the Housing Growth Partnership.

We continue to help businesses grow, adapt and recover. We have supported over 70,000 businesses to start-up, and helped more than 130,000 boost their digital capabilities. We also generated £5 billion in net new open book assets under administration in Insurance and Wealth.

In addition, we are delivering an improved merchant services proposition for our commercial clients, which has resulted in 12% growth in new clients so far this year.

We continue to modernise our technology architecture and continue to develop our cloud capabilities.

Setting out sustainability commitments

We recognise the vital role we must play in supporting the UK’s transition to net zero, as demonstrated by the action we have taken this year. We have set ourselves the goal of reducing the emissions we finance to net zero by 2050, or sooner, working with our customers, the UK Government and the market.

To help deliver our ambitions, this year we have expanded the funding available under the Group's green finance initiatives from £3 billion to £5 billion to support businesses to transition to a low carbon economy. Alongside this we have committed £500 million in ESG-linked funding in support of the social housing sector, and we finance one in ten electric vehicles on the road.

At the start of 2021 we also committed to make our own operations carbon neutral by 2030, and are fully focused on our longer-term commitments in order to play a leading role in tackling climate change.

We've supported 


first-time buyers to purchase homes so far this year.

Q3 financial breakdown

The first nine months of the year has seen a solid financial performance, with continued business momentum and improved macroeconomic assumptions. Net income is £11.6 billion up 8% year on year; with the third quarter up 5% on the previous quarter.

We remain committed to efficiency with a cost:income ratio for the year to date of 52.6%, as we continue to improve our position.

Statutory profit before tax was £5.9 billion for the nine months, significantly up year on year, and we have also delivered continued balance sheet growth and seen significant capital build. The CET1 ratio now stands at 17.2%, up from 16.2% at the end of 2020.

Continued mortgage growth was the main driver of the balance sheet momentum. In total, mortgage lending was up £2.7 billion in the quarter with total mortgage lending £15.3 billion higher than at the end of 2020. To support our ambition to become the preferred financial partner for our customers, we have delivered net open mortgage book growth of more than £15 billion in the first nine months.

We are also starting to see growth in credit card balances, which are up £0.2 billion in the quarter as spending on travel starts to recover. We expect this modest growth to continue in coming quarters. Meanwhile we continue to see strong deposit inflows to our trusted brands. Retail deposit balances are up £4 billion with total deposits now more than £28 billion higher so far in 2021, and an increase of £67 billion since the end of 2019.

Our strategy through Q3

Our strategy in 2021 of Helping Britain Recover remains unchanged. Our solid financial performance, strong progress against our strategic priorities and continued business momentum position us well moving forward.

Our strategy has proved to be incredibly resilient, and this has been vital to supporting our customers and communities during these challenging times.

The Group has strong foundations, with significant balance sheet and capital strength. This puts us in a good position to take advantage of the exciting and significant opportunities to grow through disciplined investment; further developing our services to customers and deepening customer relationships across all our businesses.

The pandemic has driven a significant shift in how many of our customers choose to bank and transact, and we continue to examine how we can support them through further development of our digital technologies. However, our commitment to efficiency remains unchanged, and I believe there are significant opportunities to invest in improving our processes through enhanced technology.

At our full year results in February, the Group’s new Chief Executive Charlie Nunn will give a update on strategy, and while our strategy may evolve we can be certain that our purpose of Helping Britain Prosper will still be at the heart of everything we do.

William Chalmers
About the author William Chalmers

William joined the Board in August 2019, when he was appointed Chief Financial Officer.

William has worked in financial services for over 25 years, and previously held a number of senior roles at Morgan Stanley, including Co-Head of the Global Financial Institutions Group and Head of EMEA Financial Institutions Group. Before joining Morgan Stanley, William worked for JP Morgan, again in the Financial Institutions Group.

William's background Close

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