Company: LLOBF
Filing Date: 2025-02-25
Form Type: 424B2
Source: 0000950103-25-002401
Chunk: 27

Company: Lloyds Banking Group plc
Filing Date: 2025-02-25
Form: 424B2
Chunk 27
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 Weighted Assets, and LBG’s CET1 Ratio.

Further, the Basel Committee has continued its
post-crisis work on risk weighted assets. In December 2017, the Basel Committee revised the Basel III capital framework to, among other
things: (i) strengthen risk sensitivity and comparability in credit risk by adopting minimum “input” floors for certain metrics;
(ii) introduce a standardized approach to credit valuation adjustment risk; (iii) introduce a standardized approach to operational risk;
and (iv) introduce an “output floor” which is set at 72.5% of total RWAs calculated using the standardized approach. The date
of implementation for most of these proposed reforms was set at January 1, 2022. However, the Basel Committee has chosen to bring the
output floor requirements into force over the course of an added five-year phased implementation period post January 1, 2022, ending on
January 1, 2027. In March 2020, the oversight body of the Basel Committee on Banking Supervision, the Group of Central Bank Governors
and Heads of Supervision (the “GHOS”) announced that it has endorsed a set of measures to provide additional operational
capacity for banks and supervisors to respond to the immediate financial stability priorities resulting from the impact of the COVID-19
pandemic on the global banking system, including the deferral by one year to January 1, 2023 of the implementation date of most of the
proposed reforms listed above and the deferral by one year to January 1, 2028 of the implementation period for the accompanying transitional
arrangements for the output floor.

In November 2021, the U.K. financial regulators
announced that they would look to implement parts of the Basel III standards that remain to be implemented in the U.K. (the so-called
“Basel 3.1 standards”) post March 2023. On November 30, 2022, the PRA published Consultation Paper CP16/22 setting out its
proposed rules for the implementation of the Basel 3.1 standards. The U.K. HM Treasury also published a simultaneous consultation with
the necessary secondary legislation to facilitate the implementation of the PRA's Basel 3.1 rules. This was followed by a Policy Statement,
PS17/23, published on December 12, 2023, which only partly addressed the subject matter of CP16/22. A second Policy Statement, PS