Company: LLOBF
Filing Date: 2025-02-25
Form Type: 424B2
Source: 0000950103-25-002401
Chunk: 36

Company: Lloyds Banking Group plc
Filing Date: 2025-02-25
Form: 424B2
Chunk 36
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. Recoverable
amounts depend on discounted future cash flows, which can be affected by restructurings, such as the U.K. ring-fencing regime, or unforeseen
events. Any of these factors could limit our ability to maintain sufficient Distributable Items.

Interest payments on the Additional Tier 1 Securities
shall not be made, in whole or in part, to the extent maximum distributable amounts restrictions apply.

LBG shall not pay any interest otherwise scheduled
to be paid on the Interest Payment Date if and to the extent that the payment of such interest would cause, when aggregated with other
distributions of the kind referred to in Rule 4.3(2) of chapter 4 of the “CRR Firms – Capital Buffers” part of the
PRA Rulebook (or any succeeding provision(s) amending or replacing such rule) (“Chapter 4”) and which are required
under the Applicable Regulations to be taken into account for this purpose, the Maximum Distributable Amount, (as defined below) if any,
then applicable to us, to be exceeded.

<div align='center'>S-33</div>

The PRA capital buffer rules applicable to LBG
require that firms that fail to meet the “combined buffer” are made subject to restricted discretionary payments (such as
payments relating to common equity tier 1, variable remuneration or discretionary pension benefits and payments on additional tier 1 instruments)
(the “MDA Restrictions”). These types of restrictions have applied in the U.K. since January 1, 2016. In the event
of a breach of the “combined buffer”, the MDA Restrictions will be scaled according to the extent of the breach of the “combined
buffer” and calculated as a percentage of the profits of the firm earned in each of the past four calendar quarters, net of discretionary
payments. Such calculation will result in a “maximum distributable amount” in each relevant period. As an example, the scaling
is such that in the bottom quartile of the “combined buffer”, no “discretionary payments” will be permitted to
be paid. As a consequence, in the event of breach of the combined buffer (as applicable at Group level) LBG's discretionary payments will
be restricted and LBG may elect, or may be required, to exercise its discretion to cancel (in whole or in part) interest payments in respect
of the Additional Tier 1 Securities.

Separately, certain regulatory requirements may
restrict LBG