Company: LLOBF
Filing Date: 2025-10-23
Form Type: 6-K
Source: 0001654954-25-012079
Chunk: 4

Company: Lloyds Banking Group plc
Filing Date: 2025-10-23
Form: 6-K
Chunk 4
---
4, driven by higher underlying net interest income and higher underlying other income, partially offset by an increased charge for operating lease depreciation. Net income in the third quarter of £4,643 million was up 3% compared to the second quarter, including higher underlying net interest income and higher underlying other income, partially offset by a modest increase in operating lease depreciation.

Within net income, underlying net interest income of £10,106 million was up 6% versus the prior year (nine months to 30 September 2024: £9,569 million). This was supported by a banking net interest margin of 3.04% (nine months to 30 September 2024: 2.94%). The net interest margin benefitted from a growing structural hedge contribution as balances were reinvested in a higher rate environment, partially offset by mortgage refinancing driving margin compression and deposit churn headwinds. Average interest-earning banking assets in the first nine months of 2025 of £460.4 billion reflect strong growth relative to the first nine months of 2024 (nine months to 30 September 2024: £449.9 billion), primarily driven by UK mortgages, credit cards, UK Retail unsecured loans and the European retail business. In Commercial Banking, average interest-earning banking assets reduced, driven by continued repayments of government-backed lending within Business and Commercial Banking and lower lending to banks. Underlying net interest income in the first nine months of 2025 included a non-banking net interest expense of £372 million (nine months to 30 September 2024: £347 million), increasing as a result of refinancing activities at higher rates and growth in the Group’s non-banking businesses.

Underlying net interest income of £3,451 million in the third quarter of 2025 was 3% higher than the second quarter (three months to 30 June 2025: £3,361 million). A growing structural hedge contribution more than offset the impact of continued headwinds from asset margin compression and deposit churn. This resulted in an increase in the banking net interest margin to 3.06% (three months to 30 June 2025: 3.04%). Average interest-earning banking assets were higher in the third quarter at £465.5 billion (three months to 30 June 2025: £460.0 billion), driven by UK mortgages, unsecured lending and the European retail business. The Group now expects underlying net interest income for 2025 to