Lloyds Banking Group(LYG) - 2024 Q4 - Annual Report

Financial Performance - £0.8 billion additional revenues generated from strategic initiatives in 2024, surpassing the initial target of approximately £0.7 billion[40] - 12.3% Return on Tangible Equity (RoTE) achieved in 2024, with a target of over 15% RoTE by 2026[8] - Statutory profit after tax for 2024 was £4.5 billion, with underlying profit at £6.3 billion, reflecting a net income of £17.1 billion and a return on tangible equity of 12.3%[61][72] - Underlying net interest income of approximately £13.5 billion and operating costs of around £9.7 billion[89] - The Group's net revenue growth from 2021 to 2024 was approximately £2 billion, with £0.8 billion additional revenues from strategic initiatives[156] Shareholder Returns - £1.7 billion share buyback announced alongside a 15% increase in total ordinary dividend to 3.17 pence, totaling £3.6 billion in distributions for 2024[38] - A final ordinary dividend of 2.11 pence per share was recommended, resulting in a total dividend for the year of 3.17 pence, up 15% from the prior year[59] - Total ordinary dividend per share for 2024 increased by 15% to 3.17p, with £3.6 billion returned to shareholders[117] Customer Engagement - 28 million customers served, with around 23 million digitally active users, exceeding the 2024 ambition[25] - The mobile app has over 20 million users and 6 billion annual logins, with a 50% increase since 2021, enhancing customer engagement[76] - Digital user base reached 22.7 million, reflecting a growth in digitally active users[123] - The number of digitally active customers grew to 22.7 million, an increase from 18.3 million in 2021[170] Operational Efficiency - 17.5% reduction in legacy technology applications and over 30% reduction in data centers, enhancing operational efficiency[28] - Cost:income ratio targeted to be less than 50% by 2026[8] - The Group plans to achieve a cost:income ratio of less than 50% by 2026 through technology modernization and operational efficiencies[82] - The company achieved a 50% digitization rate for key servicing interactions in the small business deposit market, targeting to maintain this share by 2026[183] Capital Management - 148 basis points capital generation achieved in 2024, with a goal of over 200 basis points by 2026[8] - The Group's capital generation was 148 basis points, with a pro forma CET1 ratio of 13.5% after £3.6 billion of shareholder distributions[63][72] - Capital generation of greater than 200 basis points, with a CET1 ratio target of approximately 13.0%[89] - The Group announced a share buyback program of up to £1.7 billion, aiming to maintain a CET1 ratio of 13.5% by the end of 2024[59][63] Sustainable Financing - More than £20 billion provided for sustainable financing since 2022, surpassing the target of £18 billion[43] - The Group's sustainability goals include £11.4 billion of EPC A and B mortgage lending and £10.7 billion of sustainable financing in 2024[67][68] - The Group achieved £11.4 billion in EPC A and B mortgage lending by 2024, exceeding the £10 billion target[165] - £10 billion of sustainable finance provided for Commercial Banking customers in 2024[110] - The Group aims for over £21 billion in new sustainable financing targets by 2027 for EPC A and B rated mortgage lending and electric vehicle financing[147] - The Group has supported £47.3 billion of sustainable lending since 2022, with £17.5 billion in 2024 alone[147] - £9.4 billion was provided for financing battery electric and plug-in hybrid vehicles since 2021[170] Workforce and Diversity - 4,000 new hires into technology and data roles to drive growth and efficiency[32] - 40.4% of senior roles held by women and 12.6% held by Black, Asian, or Minority Ethnic colleagues in 2024[110] - The Mass Affluent customer base grew to over 3 million, with a 15% increase in banking balances since 2021[173] Market Position - Mortgage market share for total gross lending stood at 19.9%[125] - The market share in all issuer sterling debt capital markets increased from 6% to 10% since 2021[187] - The company improved its sterling interest-rate swap ranking from 7th in 2021 to 2nd in 2024[187] Cost Management - £1.2 billion of gross cost savings were achieved, alongside addressing a £7 billion pension deficit[157] - The company has achieved £1.2 billion in gross cost savings since 2021, with a 30% reduction in office footprint by 2024[194] Future Outlook - The Group aims to deliver over £1.5 billion in additional strategic initiative income by 2026, with a focus on high-value areas and digital solutions[77][83] - House prices expected to rise by around 2% in 2025, with consumer credit balances up 4.9%[120] - The company plans to implement Basel 3.1 regulations by January 2027, with an expected moderately positive initial impact[147] - The company announced a £500 million funding arrangement to support the retrofit of social housing in the UK[188] - The company has provided over £2 billion in lending to the social housing sector in 2024[189]