Company: LLOBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001654954-25-008460
Chunk: 48

Company: Lloyds Banking Group plc
Filing Date: 2025-07-24
Form: 6-K
Chunk 48
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 advances to customers reduced to 5.4% (31 December 2024: 5.8%) with underlying credit performance and Stage 2 ECL coverage stable at 6.4% (31 December 2024: 6.1%)

● Stage 3 loans and advances increased to £2,034 million (31 December 2024: £1,839 million) and as a proportion of total loans and advances to customers to 2.3% (31 December 2024: 2.1%). Stage 3 ECL coverage remained broadly stable at 23.1% (31 December 2024: 22.6%)

CREDIT RISK (continued)

Commercial Banking UK Real Estate analysis

● Commercial Banking UK Real Estate committed drawn lending stood at £9.3 billion at May 2025 (net of £2.7 billion exposures subject to protection through Significant Risk Transfer (SRT) securitisations). This compares to £9.3 billion at 31 December 2024 (net of £3.1 billion subject to SRT securitisations). In addition there are undrawn lending facilities of £3.7 billion (31 December 2024: £2.8 billion) to predominantly investment grade rated corporate customers

● The Group classifies Real Estate as exposure which is directly supported by cash flows from property activities (as opposed to trading activities, such as hotels, care homes and housebuilders). Drawn lending of £6.8 billion to social housing providers are also excluded (31 December 2024: £7.2 billion)

● Despite some headwinds, including the impact of elevated interest rates, the portfolio continues to remain well-positioned and proactively managed with conservative LTVs, good levels of interest cover and appropriate risk mitigants in place

● Overall performance of the portfolio has remained resilient. The Group has continued to see strong asset quality within this sector, with a decrease in cases in its more closely monitored Watchlist category and limited flow into Business Support

● Lending continues to be heavily weighted towards investment real estate (c.94%) rather than development. Of these investment exposures c.93% have an LTV of less than 70%, with an average LTV of 45%. The average interest cover ratio was 3.1 times, with 75% having interest cover of above 2 times

● The portfolio is well diversified with no fully speculative commercial development lending (defined as property not pre-sold or pre