Company: LLOBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001654954-25-008460
Chunk: 20

Company: Lloyds Banking Group plc
Filing Date: 2025-07-24
Form: 6-K
Chunk 20
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 forma capital generation during the first half of the year was 86 basis points (59 basis points in the second quarter). This reflected strong banking build and the £150 million interim dividend received from the Insurance business in July 2025, partially offset by net risk-weighted asset increases. The Group has accrued a foreseeable ordinary dividend of 50 basis points, inclusive of the announced interim ordinary dividend of 1.22 pence per share. The Group continues to expect capital generation in 2025 to be c.175 basis points. Excluding the Insurance dividend received in July 2025, the Group's CET1 capital ratio at 30 June 2025 was 13.8%.

Risk-weighted assets increased by £6.8 billion to £231.4 billion at 30 June 2025 (31 December 2024: £224.6 billion). This reflects the impact of strong lending growth, but also includes a temporary c.£1.2 billion increase related to hedging activity that is expected to reverse in the third quarter. The growth in risk-weighted assets was partly offset by continued optimisation activity. While no Retail secured CRD IV increases were recognised during the first half of the year, the Group continues to expect an uplift to be recognised against performing exposures in respect of CRD IV secured assets, subject to finalisation with the PRA.

The Group's regulatory CET1 capital requirement remains at around 12%. This includes the Pillar 2A CET1 capital requirement of about 1.5% of risk-weighted assets. The Board's view of the ongoing level of total CET1 capital required to grow the business, meet current and future regulatory requirements and cover economic and business uncertainties remains c.13.0%. This includes a management buffer of c.1%. In order to manage risks and distributions in an orderly way, the Board intends to progress in stages towards paying down to the CET1 capital target of c.13.0% by the end of 2026.

SUMMARY OF GROUP RESULTS (continued)

#### Dividend and share buyback
The Group has a progressive and sustainable ordinary dividend policy whilst maintaining the flexibility to return further surplus capital through share buybacks or special dividends. The Board has recommended an interim ordinary dividend of 1.22 pence per share (equivalent to £731 million). This represents an increase of 15% compared to the first half of 2024, in line with the Board's commitment to a progressive and sustainable policy.

In February this year