Delivering on our purpose-driven strategy

Reflecting on 2025, it has been another year of significant progress for the Group, delivering for customers, colleagues, communities and shareholders. We have continued to invest and transform the business, delivering strong progress against our strategic objectives and further enhancing the customer proposition and our platform for growth. 

At the heart of our transformation is digital innovation, bringing together transformative technologies and skilled people to meet customer needs effectively. We are a digital and AI leader with distinct competitive advantages and have taken action to enhance our infrastructure and capabilities to create a platform for innovation and business growth.

This is enabling us to deliver leading and innovative customer propositions and experiences across the Group and we are now extending this to new and emerging technologies such as digital assets. These steps will open up new opportunities for our customers and maintain our commercial leadership.

At the same time, we are delivering on our purpose of Helping Britain Prosper and creating a more sustainable and inclusive future for people and businesses across the UK whilst accessing new commercial growth opportunities.

Embedding a positive, values based performance culture remains important. The Board places great emphasis on shaping and fostering this culture and, throughout 2025, engaged with colleagues better to understand their experiences. These insights informed Board discussions and decision making, ensuring that we continue to build the culture of the organisation.

The UK economy proved resilient to a volatile and uncertain global economic and political environment in 2025, with growth similar to its recent long-term trend rate.

Regulatory developments have been constructive from a prudential perspective where we now have more clarity on capital requirements.

We have taken an additional provision of £800 million for Motor Finance as a result of our assessment of the impact of the FCA's proposed redress scheme and we await further clarity on the final rules. We welcome the FCA's broader strategic focus on growth and simplifying regulation. 

Generating value for shareholders

I was pleased to see our market value strengthen considerably during the course of 2025, with the share price up more than 79%. I believe this improvement reflects the Group’s strategic progress, consistent financial performance and the growing confidence in our ability to deliver higher, more sustainable returns. 

Following the financial progress made during the year, the Board has recommended a final ordinary dividend of 2.43 pence per share, bringing the total proposed ordinary dividend for 2025 to 3.65 pence per share, an increase of 15% compared with the prior year. In addition, on 30 January 2026 the Group announced the launch of a share buyback programme to repurchase up to £1.75 billion of ordinary shares.
 

3.65p

total ordinary dividend per share, up 15%
 

£3.9bn

returned to shareholders for 2025 
 

Directors

We regularly review the Board’s composition and diversity to ensure we maintain the right balance of skills, experience and perspectives at the highest level. In June 2025, Chris Vogelzang was appointed as a non-executive director and joined the Responsible Business Committee. Scott Wheway stepped down from the Board in October 2025. 

Remuneration

As we advance our strategy, attracting and retaining talent across the business remains essential. The Board’s Remuneration Committee carefully determines all awards, ensuring that they align with market conditions, regulatory developments, Group performance and shareholder expectations.

The Group intends to implement a new remuneration policy in 2026, designed to incentivise the leadership team to deliver continued strategic and financial progress and guide the Group into its next strategic cycle. The policy places greater emphasis on sustainable high performance and shareholder value creation. 

Summary

I’m proud of what Lloyds Banking Group continues to deliver for customers, colleagues and shareholders and of how we’re doing it. Through long-term investment in our business and communities, we’re driving sustainable growth and building resilience. I’d specifically like to thank our colleagues for their continued dedication and focus on meeting the evolving needs of our customers.

Sir Robin Budenberg
Chair

About Robin Budenberg

Robin was Chair of The Crown Estate for 9 years until July 2025. He spent 25 years advising UK companies and the UK Government while working for S.G. Warburg/UBS Investment Bank and was formerly Chief Executive and Chairman of UK Financial Investments (UKFI), managing the Government’s investments in UK banks following the 2008 financial crisis. He qualified as a chartered accountant.

2025 was a key year for the Group, entering the second phase of our strategy, investing for the benefit of our customers and wider stakeholders and guided by our purpose of Helping Britain Prosper.

As we enter 2026, our transformation is accelerating, supported by strong business momentum as well as enhanced digital capabilities and innovative propositions that are driving growth and efficiency across the franchise.

The Group demonstrated sustained strength in financial performance in 2025, with franchise, balance sheet and income growth. Strong business performance drove capital generation across the year of 147 basis points allowing total shareholder distributions of £3.9 billion, even after an additional £800 million charge for motor finance in the third quarter.

Given our continued strategic execution and sustained strength in financial performance, we remain confident in meeting our 2026 commitments (including our upgraded target for return on tangible equity) and the Group’s outlook beyond 2026. We look forward to setting out the next phase of the Group’s strategy, beyond the current plan, in July.

Sustained strength in financial performance

Statutory profit before tax was £6.7 billion, up 12% year-on-year, with higher underlying profit of £6.8 billion, driven by 7% growth in net income, partially offset by higher operating costs and a higher underlying impairment charge. Net income of £18.3 billion benefitted from a higher banking net interest margin of 3.06% and continued broad-based growth in underlying other income of 9%.

Operating costs of £9.8 billion increased by 3%, reflecting strategic investment (including an increased severance charge), business growth costs and inflationary pressures, partially offset by increasing cost savings from investment and business-as-usual cost discipline.

The impairment charge remained low at £795 million, with strong and stable credit performance across our portfolios. Overall, this resulted in a return on tangible equity of 12.9%, or 14.8% excluding the motor finance charge.

The Group’s franchise and balance sheet grew during 2025. Underlying loans and advances to customers of £481.1 billion were up £22.0 billion (5%), reflecting growth across all Retail areas including UK mortgages and the European business, alongside growth in Corporate and Institutional Banking.

Customer deposits of £496.5 billion increased by £13.8 billion (3%) across the year. This included growth in Retail of £5.5 billion, driven by strength in current accounts and savings, and Commercial Banking of £8.5 billion, including growth in targeted sectors.

The Group delivered strong capital generation of 147 basis points in 2025 (178 basis points excluding the motor finance charge), and has a pro forma CET1 ratio of 13.2%. Given the capital generation and strength of the CET1 position, the Board has recommended an increased final ordinary dividend of 2.43 pence per share, resulting in a total dividend for the year of 3.65 pence per share, up 15% on the prior year.

In addition, the Group has announced its intention to implement an ordinary share buyback of up to £1.75 billion, as we continue to distribute excess capital to shareholders. Together this represents distributions of £3.9 billion in respect of 2025. Going forward, reflecting increasing confidence in our capital generation, the Group will now review excess capital distributions in addition to the ordinary dividend every half year.

Guiding purpose of Helping Britain Prosper

The fundamentals of the UK economy are constructive. Our purpose allows us to play a key role in promoting UK prosperity, aligning our strategy to support UK economic growth sectors.

As part of this, we recently committed to providing a further £35 billion of new finance to companies investing and operating in the UK in 2026. Alongside, we remain focused on improving access to quality and affordable housing, lending £17 billion to first time buyers, as well as supporting £3.2 billion of new finance to the social housing sector in 2025.

We continue to financially empower our customers. For example, our Ready-Made Pensions product is a simple, long-term financial planning solution benefitting customers including those who do not participate in auto-enrolment. Of the over 7,000 accounts opened since launch, c.40% are self-employed customers.

Supporting the net zero transition remains a significant strategic and commercial opportunity. The Group has cumulatively delivered over £70 billion of sustainable financing since 2022, including over £21 billion in 2025.

Second phase of purpose-driven strategy, continued strong momentum, on track for 2026

In 2025, we entered the second phase of our five year strategic plan, continuing to scale the core business, driving growth in high value areas, deepening customer relationships and strengthening cross-Group collaboration. Strong strategic momentum means we now expect to generate c.£2 billion of additional revenues from strategic initiatives by the end of 2026, exceeding our initial £1.5 billion target.

In 2025 we continued to grow our Retail franchise through innovative new propositions and enhanced capabilities. We maintained our focus on high-value segments, building our Mass Affluent current account offering with the launch of our Lloyds Premier product.

As the UK’s largest digital bank, we continued to accelerate the shift to mobile-first. We now have c.21.5 million customers using our app, an increase of c.45% since 2021. Alongside, we recently announced the acquisition of Curve (subject to regulatory approval) which will reinforce our leading digital experiences, including enhanced digital wallet capabilities.

In Insurance, Pensions and Investments (IP&I), we are reinforcing our competitive position in areas of strategic focus. We now have over 750,000 customers using our core app for workplace pension customers, helping to drive regular workplace pension contributions up 5% year-on-year. With the intention of capitalising on our position as the UK’s only scale integrated financial services provider, we continue to embed IP&I products across banking journeys.

The protection take-up rate for mortgage customers is now at 20% in 2025, up from 15% in 2024. Alongside, the recent full acquisition of Schroders Personal Wealth accelerates delivery of our Wealth strategy and will deepen relationships in a high value segment.

In Commercial Banking, we are building a digitally-led relationship bank and driving income diversification through capital efficient growth. In Business and Commercial Banking, we have strengthened deposit and lending growth capabilities through enhanced digital propositions. This includes our new Gen AI powered application which simplifies the Commercial Real Estate lending journey by expediting the tenancy schedule process.

In Corporate and Institutional Banking, we are delivering on our ambition to become a broader scale solution provider, meeting more of our customer needs. For example, in 2025 we launched a market-leading FX solution, supporting a c.21% increase in foreign exchange volumes year-on-year.

Finally, within Equity Investments, alongside strong LDC performance in 2025, our Lloyds Living business continues to be a significant growth driver, with a portfolio of close to 8,000 homes, up from c.5,500 this time last year.

As we deliver growth we are focused on improving operating leverage through cost and capital efficiency. Since 2021 we have delivered £1.9 billion of gross cost savings through both business-asusual management as well as more transformational initiatives enabled by strategic investment. Alongside, we have driven £24 billion of risk-weighted asset optimisation, primarily through enhanced capabilities, data improvements and risk reduction transactions.

Leveraging our enablers to drive long-term competitive strength

As highlighted in our recent Digital and AI seminar, our investment in technology, data and people underpins our ambitions to grow the business with innovation and improved operating leverage.

Advances in our infrastructure and capabilities allow us to deliver on our strategic priorities, such as enabling a seven minute mobile current account opening process, in line with the sector best, driving c.85% of our current account openings in 2025.

Digital investments have also supported simplification of our technology estate and helped improve productivity, with an increase of c.45% in active customers served per distribution FTE since 2021. Finally, we are extending our leadership across new and emerging technologies, including Gen AI and digital assets, and are well-placed to succeed in a period of potentially transformational change for the industry.

Our c.50 major live Gen AI use cases delivered c.£50 million of value in 2025, as we built the foundations of our capabilities. We are now targeting over £100 million of incremental P&L benefit from Gen AI in 2026, as we start to scale the foundations.

Together, these developments drive improved operating leverage, helping towards our target cost:income ratio of less than 50% in 2026. As we enter the final year of our current strategy, we remain confident in our 2026 ambitions to generate higher, more sustainable returns for our shareholders. Beyond 2026, we are committed to continuing income growth, improving operating leverage and stronger, sustainable returns.

2026 guidance

Based on our sustained strength in financial performance and our current macroeconomic assumptions, for 2026 the Group expects:

• Underlying net interest income of c.£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 now of greater than 16%
• Capital generation of greater than 200 basis points (excludes capital distributions)
• To pay down to a CET1 ratio of c.13.0%

Charlie Nunn
Group Chief Executive
 

Watch a short video of Charlie reflecting on our achievements in 2025:

Watch video

About Charlie Nunn

Charlie has over 25 years’ experience in the financial services sector. Prior to joining the Group in August 2021, Charlie held a range of leadership positions at HSBC, including Global Chief Executive, Wealth and Personal Banking, and Group Head of Wealth Management and Digital, as well as Global Chief Operating Officer of Retail Banking and Wealth Management.

Charlie began his career at Accenture, where he worked for 13 years in the US, France, Switzerland and the UK before being made a Partner. He then moved to McKinsey & Co. as a Senior Partner, leading on projects for five years.

Follow Charlie on LinkedIn

Overview

The UK economy proved resilient to global challenges in 2025. Although elevated inflation and pay growth resulted in slower interest rate cuts than in the US and Eurozone, real-wages grew and households’ spending growth rose. Lower inflation in 2026 is expected to allow further interest rate cuts to support the economy while the government continues to address its deficit. Low private sector indebtedness and high household savings provide resilience and capacity for improving growth.

Market context

• The UK economy is estimated to have grown by 1.4% in 2025, proving resilient to rising taxes, uncertainty from the shift in the global trade environment as the US introduced significant import tariffs, and to continued conflict in Ukraine and the Middle East.
• The economy has not settled back to pre-pandemic norms, however. Inflation remained elevated above its 2% target, increasing from 2.5% in 2024 to 3.4% in 2025, partly a result of government policy impacts – a large rise in water bills, VAT on private school fees, Vehicle Excise Duty changes, a 6.7% rise in the National Living Wage and an increase in employer National Insurance. Consequently, households’ high inflation expectations kept pay growth strong through much of the year.
• As a result, the Bank of England reduced interest rates only slowly. Bank Rate was cut by 100 basis points through 2025 to end the year at 3.75%, 150 basis points lower than its 2023 to 2024 peak – a smaller reduction than the 175 basis points in the US and 200 basis points in the Eurozone. The unemployment rate rose by 0.7 percentage points in the year to November, to 5.1%.
• With this backdrop, UK households raised their spending growth, but cautiously, saving a high proportion of disposable income. House prices rose by less than 1%, reflecting affordability of mortgage payments being still more of a constraint than pre-pandemic.
• Nevertheless, growth in 2025 in the markets we operate in returned to rates similar to, or better than, pre-pandemic. Both households’ and corporates’ leverage had fallen to low levels, creating space for a pick-up in borrowing. Mortgages and household deposits benefitted from the high level of housing transactions early in the year in advance of the stamp-duty increase in April. The drag on SMEs’ borrowing balances from pay-down of government-guaranteed COVID-scheme lending is now abating.

Our response

• In a world of heightened economic uncertainty, our purpose of Helping Britain Prosper is ever more important. Our strategy and business model position us well in both constructive and more challenging economic environments.
• Our strategy is focused on faster growing, high potential sectors such as housing, pensions, investments, and infrastructure. We are already driving growth in these areas, leveraging our competitive advantage as the UK’s only integrated financial services provider. As a result, we expect the Group to continue to grow faster than the wider economy over the coming years. 
• Our transformation allied to our strong customer franchise captures opportunity by effectively meeting evolving customer needs and demands, diversifying income streams, and also with efficiency. Our large scale and strong balance sheet, with a prudent approach to risk, provides both access to growth opportunities and resilience at times of challenging economic conditions.

2026 outlook

• We forecast GDP growth of 1.2% in 2026, a little below 2025’s estimated 1.4%. Although the government will continue to shrink its budget deficit via rising taxes, the resulting drag on the economy is expected to be offset by lower rates and reduced policy uncertainty, allowing the economy to grow closer to its ‘potential’ or ‘trend’ rate through the year.
• Some uncertainties are expected to reduce now that the scale and impact of US tariffs has become clearer, notwithstanding likely readjustment in response to legal challenges.
• More importantly, interest rates are switching from being a drag on the economy to a marginal support, as many customers refinancing mortgages will begin to obtain lower rates than their existing deals. Mortgage rates fell in late 2025 as markets priced earlier Bank Rate cuts, in response to Budget measures subtracting c.50 basis points from mid-2026 inflation forecasts.
• The reduced near-term inflation outlook should lessen concern of a self-perpetuating cycle between elevated inflation and elevated pay growth that some members of the Bank of England’s Monetary Policy Committee had cited as a key reason for reticence to cut rates more swiftly through 2025. We expect CPI inflation to decline to 2.6% in 2026 from 3.4% in 2025, and assume two further Bank Rate cuts to 3.25% by the third quarter of 2026.
• Growth closer to the economy’s ‘potential’ or ‘trend’ rate through 2026 should mean that unemployment drifts up only a little further from its level of 5.1% at November 2025.
• However, we expect the lagged impact of rising unemployment to mean that pay growth falls by more than the reduction in inflation during 2026.
• Households are therefore likely to maintain a cautious approach towards spending. Alongside, we expect house prices to rise by only 2%, close to the average of the past three years, lacking the benefit from elevated housing transactions early in 2025.
• Growth in the markets we operate in is expected to slow slightly in comparison to 2025, for these reasons.

Overview

Most customers continue to prefer digital engagement channels which offer convenient and personalised financial solutions with frictionless journeys, to proactively manage their finances. AI is accelerating this shift by enabling customers to rapidly evaluate the market and seek advice on the best products to meet their needs. Alongside, financial health across most households and businesses is strengthening, supported by improving confidence and falling rates.

Market context

• Reducing rates have increased consumer confidence and improved the outlook for mortgage holders, as the majority of the market is currently financed on higher rates.
• With one in three customers now using AI weekly to manage their finances (UK Consumer Digital Index 2025, based on survey of 5,000 customers, results may not be representative of all customers), expectations for seamless and personalised digital journeys continue to grow.
• Customers are seeking to access financial solutions at their point of need, supported by growth in embedded finance.
• Corporates and SMEs are confident about future prospects for their businesses, despite wider economic uncertainty.

Our response

• Redesigned app with improved onboarding and servicing journeys, empowering customers to achieve financial goals.
• Integration of AI into servicing journeys, such as underwriting for SME CRE lending, driving better and faster decisioning. 
• Branch co-servicing enabling Halifax, Bank of Scotland or Lloyds customers to use any of our branches to manage their accounts.
• Enhancements across our product suite, including launch of Lloyds Premier, meeting more needs for Mass Affluent customers.
• Improved mobile PCA onboarding journey. Launch of mobile Business Banking loans journey.

2026 outlook

• Launch of AI financial assistant bringing personalised, round-the-clock financial guidance to mobile app customers.
• Integration of digital wallet capabilities following our proposed acquisition of the fintech Curve to provide greater payment flexibility and access to advanced digital wallet features.
• Scale digital journeys across Business Banking with extended digital onboarding and origination and greater personalisation capacity.

Overview

Competition remains intense with high street banks and building societies maintaining their focus on share growth, and building scale by consolidating smaller players. Alongside, neobanks and fintechs continue to gain momentum by leveraging their strong digital experiences and broadening their customer offering across Retail and Commercial segments. 

Market context

• Ongoing new business margin pressure across deposit and mortgage markets, driven by intense competition. 
• Continued disruption to the single-provider banking model, with digital onboarding and engagement channels making it easier for customers to manage relationships across multiple providers.
• New, smaller entrants reshaping financial services through tightly targeted propositions supported by strong digital experiences. 
• Opportunity for providers with breadth of offering and personalised journeys to deepen their customer relationships.

Our response

• Market-leading direct and intermediary journeys reaching customers in their preferred channel.
• Relevant and differentiated cross-Group propositions meeting a wider set of financial needs. 
• Tailored solutions designed to simplify complex financial decisions, offer expert guidance, and provide exclusive rewards.
• Empowered customers financially with up-to-date credit report insights enabling over 500,000 customers to improve their credit score each quarter.
• Focus on high value areas, including our Home ecosystem which is increasing engagement and helping retain customer balances.
• Successful pilot of embedded finance offering through BlackHorse Flexpay with growth in merchant sign-ups in 2025.

2026 outlook

• Enhance access to relevant and tailored propositions across customer life stages, leveraging our proposition breadth.
• Integrate Schroders Personal Wealth, to be rebranded as Lloyds Wealth, combining expert face to face advice with powerful digital tools to deepen our relationships in high value segments.
• Leverage technology and data to deliver more compelling, personalised digital propositions to support customer goals.

Overview

Rapidly evolving technology landscape, accelerated by developments in artificial intelligence and digital transformation. These shifts are enabling new engagement models, innovative propositions and greater cost efficiency. Gen AI is enhancing customer interactions through more personalised engagement, with digital asset innovation creating opportunities for greater customer control and faster, more efficient transactions. 

Market context

• Digital banking with AI-powered functionality continues to lower cost to serve, whilst increasing innovation and speed to market, driving accelerated customer adoption and greater competition.
• Incumbents are moving to modern and efficient platforms, which unlock richer personalisation and proposition development capabilities, enabling accelerated revenue growth through more targeted and differentiated offerings.
• Sophistication of cyber threats requires banks to continually enhance security measures to protect customers.

Our response

• Launched the UK’s first in-app financial assistant. 
• Agile Platform operating model, increasing efficiency and speed of change by combining our business and technology teams.
• Increasing our technology hires, including the launch of Lloyds Technology centre to bring talent in-house.
• Continued enhancement of legacy infrastructure with more than 20% reduction in technology applications and c.50% reduction in data centres since 2021.
• Extending our capabilities in new and emerging technologies through investment in Gen AI and digital assets, with 50 live Gen AI use cases in 2025 generating c.£50 million incremental value. 
• UK first digital assets use-case with Aberdeen Investments and Archax, using tokenised units as collateral for FX trades.

2026 outlook

• Actively scaling Gen AI deployment, targeting over £100 million in incremental P&L benefit in 2026 as we build seamless digital journeys and personalised customer interactions.
• Building capability to be at the forefront of agentic AI, bridging the advice gap through in-app agents.
• Position as the UK leader in digital assets, developing GB Tokenised Deposits pilot use cases to build value add in customer journeys.

Overview

Evolving environmental and societal issues, along with new regulations, require companies to clearly understand the related risks and opportunities. This includes recognising the role the Group can play through its products and services in helping customers and their communities respond to these developments.

Market context

• Organisations must have a clear understanding of environmental and sustainability issues and integrate them in their strategies and decision making, understanding their impacts, dependencies, risks and opportunities.
• Organisations need to respond to the evolving regulatory and geopolitical landscape including evolving stakeholder expectations, uncertainty and the acceleration of sustainability-related financial risks and opportunities.

Our response

• Since 2022, the Bank has financed £70.9 billion of sustainable lending, with £21.9 billion of sustainable finance supported in 2025.
• Scottish Widows have achieved discretionary investments of £81.3 billion in climate-aware strategies, with the increase primarily driven by the launch of Scottish Widows Lifetime Investment. 
• Issuance of the first sterling corporate blue bond by a UK corporate for Thames Tideway.
• Delivered £340 million of lending against our £500 million financing commitment with the National Wealth Fund. 
• Empowered over 7,000 customers through our Ready-Made Pensions since launch.
• Over £800 million donated to our four charitable Foundations across the UK since 1985.

2026 outlook

• Integration of sustainability approach into the next stage of our Group strategy, identifying risks and opportunities. 
• Continue to evolve our sustainable finance framework and related financing activities and propositions, remaining aligned to our sustainability pillars, whilst shaping finance as a force for good. 
• Enhance our disclosures through the use of data, to support meeting evolving regulatory expectations.

Overview

The regulatory landscape continues to evolve rapidly to support growth of the UK economy and innovation. The Government’s Leeds Reforms, announced in July 2025, contained a number of proposals seeking to position the UK as the number one destination for financial services companies by 2035. The proposals announced by the Government and regulators span a range of areas directly relevant to the Group. 

Market context

• The Economic Secretary is reviewing the ring-fencing regime to support growth and stability, while the Financial Policy Committee has reviewed bank capital requirements.
• The FCA will introduce a new regulated activity, ‘targeted support’ in spring 2026. It will complement existing advice by letting firms offer tailored suggestions to customer groups, aiming to broaden access and help consumers manage their finances.
• The Government, FCA and Financial Ombudsman Service consulted on reforms to modernise the UK’s redress system. In 2025, the FOS introduced a case fee for professional representatives and announced plans to change the interest rate on compensation awards.
• The Government is reforming the Consumer Credit Act to create a simpler, more agile regime that allows firms to deliver innovative new products and services, and good consumer outcomes.
• The Government has published the Strategy for Future Retail Payments Infrastructure, and is progressing plans to abolish the Payment Systems Regulator and consolidate its functions primarily within the FCA.
• The UK is rapidly developing a regulatory regime for digital assets; crypto, stablecoins and tokenised assets, set for implementation by late 2026.
• The FCA launched a consultation process on a scheme for motor finance compensation.

Our response

• We will continue to engage constructively with the authorities on the wide range of regulatory reforms currently being progressed to ensure that tangible changes are delivered which will promote better outcomes for consumers and the wider economy.
• We’re monitoring developments and contributing to consultations to support innovation while ensuring market integrity and stability. 
• We responded to the FCA’s consultation on a proposed motor finance compensation scheme emphasising that a strong and stable motor finance market is critical to ensuring that customers have access to competitive finance to support their needs.

Deepen and innovate in Consumer

2025 progress

• Completed a full redesign of the app experience across Lloyds, Bank of Scotland and Halifax with improved onboarding and servicing.
• Expanded lending through our new Ultra and Advance credit cards and tailored mortgage propositions for limited companies.
• Announced third-party Motor and Health insurance partnerships with Axa and Vitality.

2026 priorities

• Continue to build personalised, seamless experiences across all channels, driving customer value and simplifying interactions.
• Broaden and innovate across our product range to meet evolving customer needs and the competitive challenge. 
• Accelerate our mobile-first approach while reimagining physical spaces to enhance efficiency and deepen engagement.

2026 outcomes
 

3%

further increase in-depth of
relationship (versus 2024)

c.50%

increase in active customers
served per distribution FTE (versus 2021)

Create a new Mass Affluent offering

2025 progress

• Strengthened and grew relationships with Mass Affluent customers through Lloyds Premier, supporting customers who have a c.2 times greater depth of relationship with exclusive benefits, offers and optimised digital experiences.
• Strong uptake across our Direct-to-Consumer investment products with 84,000 accounts opened to-date.

2026 priorities

• Continue to enhance our Mass Affluent proposition, with improved digital experiences, supporting customers to achieve their financial goals. 
• Integration of Schroders Personal Wealth, offering full advice propositions to Mass Affluent customers across Lloyds, Halifax, Bank of Scotland and Scottish Widows.

2026 outcomes
 

>10%

increase in Mass Affluent total relationship balances, including assets under administration

Digitise and diversify our BCB business

2025 progress

• Strong progress towards becoming a digital-first relationship bank, with over 50% of products originated and fulfilled digitally, and over 50% of key servicing interactions digitised, achieving our 2026 target a year early.
• Diversified our business, shifting sector mix and enhancing propositions across Merchant Services, Cards, Trade and FX to meet more client needs.

2026 priorities

• Deliver more personalised and engaging digital solutions through automating lending decisions, expanding our multi-currency capabilities, and introducing tailored nudges to support client goals.
• Provide greater client flexibility with enhanced data ingestion capabilities and connecting the Group to over 70 accounting software packages.

2026 outcomes
 

Maintain

small business deposit market share

>50%

of key servicing interactions digitised

Develop our Corporate and Institutional business (CIB)

2025 progress

• Awarded a landmark cash management and payments contract with the government to serve over 30 central departments and public sector bodies.
• Delivered c.21% year-on-year growth in foreign exchange volumes. 
• Launched a market-leading foreign exchange algorithmic proposition.

2026 priorities

• Position ourselves as a broader CIB partner, providing an integrated Cash-Debt-Risk offering to meet all client needs.
• Disciplined expansion across key client markets in the US and Europe.
• Connect CIB clients to wider Group propositions to unlock greater value.

2026 outcomes
 

c.45%

increase in CIB other operating income (versus 2021)

>5.25%

income / average risk-weighted assets

Strengthen cost and capital efficiency

2025 progress

• Disciplined cost management with a further c.£700 million gross cost savings delivered in 2025, contributing towards a total gross cost saving of £1.9 billion since 2021.
• Investment in digital journeys continued to lower our cost to serve with a c.45% increase in customers served per distribution FTE compared to 2021.
• Strong balance sheet management with risk-weighted assets optimisation of £24 billion since 2021, including over £5 billion in 2025.
• Maintained strong capital generation of 147 basis points in 2025.

2026 priorities

• Continued commitment to enhance productivity and cost saves through strategic investment in simplification and digitisation, driving an improved cost:income ratio of less than 50% in 2026.
• Ongoing focus on growth of capital-lite revenue and other operating income from strategic initiatives. 
• Maintain focus on risk-weighted asset optimisation supported by value-add securitisation opportunities.

2026 outcomes
 

<50%

cost:income ratio

>200bps

capital generation

Maximise the potential of people, technology and data

2025 progress

People

• c.9,000 technology and data hires since 2021, supporting our growth and change delivery.
• Deployed Gen AI colleague tools at scale with over 30,000 Copilot licences distributed. 
• Modernised our property estate, supporting improved ways of working.

Technology and data

• Continued mobile app and digital journey investment, enabling more than 95% of Retail sales via digital channels.
• Greater change efficiency; c.30% gross reduction in run and change tech costs since 2021.
• Developed Gen AI foundations.

2026 priorities

People

• Support strategic delivery by increasing the number of new hires in key skill areas.
• Continue to scale enterprise Gen AI support tools to enhance productivity of our colleagues. 
• Ongoing commitments to building a more inclusive organisation.

Technology and data

• Continue to accelerate legacy app decommissioning and cloud migration.
• Actively scale Gen AI in use cases to support customers and colleagues, including the deployment of the UK’s first large-scale, multi-feature agentic AI powered financial assistant.

2026 outcomes
 

People

Maintain

strong employee engagement index (versus 2024)

Technology and data

>30%

applications on modern technology
 

35%

gross reduction in run and change technology costs (versus 2021)

The Consumer Digital Index is a comprehensive study of digital and financial lives. As the nation’s largest digital bank, we use our unique data and expertise to deliver powerful insights through this report.

Our 2025 findings reveal a major shift, with more than 28 million adults now using AI tools to manage their money, from everyday budgeting and savings goals to financial education. Further information can be found on page 33 of our sustainability report. 

We’re committed to ensuring everyone has the tools, confidence and access to thrive in a digital-first economy. Through Lloyds Bank Academy, around 428,000 individuals have benefitted from our digital and financial skills programmes in 2025, empowering our customers with knowledge and building a more resilient, inclusive financial future.

Read our latest Consumer Digital Index report:

2025 Consumer Digital Index

As the UK’s largest mortgage lender we support first time buyers to get on the housing ladder, providing £17 billion of funding in 2025 to them.

Our ‘First Time Buyer Boost’ proposition, launched in August 2024, is helping more customers by enhancing the amount they can safely borrow by up to 22%. In 2025 we have made available £5 billion of lending through this proposition, helping 14,000 first time buyers borrow more than 4.5 times their income. 

In addition, our ‘Your Credit Score’ tool helped over 500,000 customers improve their credit score every quarter during 2025. We are equipping our customers with the tools to improve their financial wellbeing while gaining insights to generate sustainable growth.
 

£17bn

funding to first time buyers

Read more on how we’re supporting the UK housing market:

Supporting the UK housing market

We’ve supported over £22 billion of financing for social housing since 2018 – including £3.2 billion this year alone. 

In 2025, the Group announced a £100 million loan agreement to fund the sustainable retrofit of thousands of social homes across the South, West and East of England, with Sovereign Network Group (SNG), one of the UK’s leading housing associations. This lending formed part of our £500 million commitment to finance the retrofit of social housing in the UK. 

Social housing continues to be a source of lending growth for the Group.
 

£100m

loan agreement to fund sustainable retrofit of social homes with SNG

Read more on how we’re supporting the social housing sector:

Championing social housing

The UK has the largest pension market in Europe, worth over £2 trillion, however our latest Scottish Widows retirement report shows that 39% of people will fail to meet basic living standards in retirement, notably those who are self-employed and younger workers.

In 2024 we launched our Ready-Made Pension offering to help customers manage their pension savings and plan for retirement, with this offering now available to those who are not an existing customer through our Scottish Widows website. At the end of 2025 we now have over 7,000 accounts opened, with 27% of our customers aged 35 and under and approximately 41% self-employed. 

We are committed to designing products that directly address our customers’ needs and bridge gaps in the market, ensuring we play a vital role in supporting the prosperity and resilience of communities across the UK while growing our assets under management.

Read more in our latest Women and Retirement Report:

2025 Women and Retirement Report

In 2025 we acted as Mandated Lead Arranger in the provision of a £154 million debt commitment as part of a wider £2.5 billion financing package to support the HyNet CO₂ Transport and Storage Project in the North West of England and North Wales.

Eni’s Liverpool Bay Carbon Capture and Storage project is the backbone of HyNet which will be critical in reducing emissions from essential but hard-to-abate sectors such as energy-from-waste, cement manufacturing, and low-carbon hydrogen production. Once operational, HyNet will play a significant role in the UK government’s net zero strategy.

The project also expects to create over 2,000 jobs during its initial construction phase and thousands more through wider investment across the North West, demonstrating how finance can drive commercial growth and supporting regional development, aligned to our purpose of Helping Britain Prosper.

Read more on how we’re supporting the UK's transition to net zero:

Climate and nature