Company: LLOBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001654954-25-008460
Chunk: 12

Company: Lloyds Banking Group plc
Filing Date: 2025-07-24
Form: 6-K
Chunk 12
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      6 |     |        8,724 |     |      2 |
| Banking net interest marginA             |        3.04% |     |        2.94% |     |   10bp |     |        2.96% |     |    8bp |
| Average interest-earning banking assetsA |     £457.8bn |     |     £449.2bn |     |      2 |     |     £453.1bn |     |      1 |

1 Net of losses on disposal of operating lease assets of £3 million (half-year to 30 June 2024: profit of £37 million, half-year to 31 December 2024: profit of £22 million).

Net income of £8,914 million was up 6% compared to the first half of 2024, driven by higher underlying net interest income and higher underlying other income, partly offset by an increased charge for operating lease depreciation. Net income in the second quarter of 2025 was up 3% compared to the first quarter, including higher underlying net interest income, higher underlying other income and stable operating lease depreciation.

Within net income, underlying net interest income of £6,655 million was up 5% versus the prior year (half-year to 30 June 2024: £6,338 million). This was supported by a banking net interest margin of 3.04% (half-year to 30 June 2024: 2.94%). The net interest margin benefitted from a growing structural hedge contribution as balances have been reinvested in a higher rate environment, partially offset by continued asset margin compression and deposit churn headwinds largely as expected. Average interest-earning banking assets in the first half of 2025 of £457.8 billion were higher than the first half of 2024 (half-year to 30 June 2024: £449.2 billion), with growth primarily driven by UK mortgages, credit cards, UK Retail unsecured loans and the European retail business. In Commercial Banking, growth in Institutional balances were offset by continued repayments of government-backed lending within Business and Commercial Banking and lower lending to banks. Underlying net interest income in the first half of 2025 included a non-banking net interest expense of £236 million (half-year to 30 June 2024: £229 million), increasing slightly as a result of growth in the Group's non-banking businesses.

Underlying