Company: LLOBF
Filing Date: 2025-10-23
Form Type: 6-K
Source: 0001654954-25-012079
Chunk: 5

Company: Lloyds Banking Group plc
Filing Date: 2025-10-23
Form: 6-K
Chunk 5
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 be c.£13.6 billion.

The Group manages the risk to earnings and capital from movements in interest rates by hedging the net liabilities which are stable or less sensitive to movements in rates. As at 30 September 2025, the notional balance of the sterling structural hedge was £244 billion (31 December 2024: £242 billion) with a stable weighted average duration of approximately three-and-a-half years (31 December 2024: approximately three-and-a-half years). The Group generated £4.0 billion of total income from sterling structural hedge balances in the first nine months of 2025, an increase of £1.0 billion over the prior year (nine months to 30 September 2024: £3.0 billion). The Group continues to expect sterling structural hedge earnings in 2025 to be £1.2 billion higher than in 2024.

Underlying other income of £4,526 million in the first nine months of 2025 grew by 9% compared to the prior year (nine months to 30 September 2024: £4,164 million), driven by strengthening customer activity and the benefit of investments in strategic initiatives. This included an increase of 13% in Retail, primarily driven by UK Motor Finance, including fleet growth and higher average vehicle rental values, alongside growth from packaged bank accounts. Insurance, Pensions and Investments underlying other income was up 5% from strengthening income in the workplace pensions business and higher general insurance income net of claims. Growth in Equity Investments and Central Items was driven by the Group’s equity and direct investment businesses, with strong income growth from Lloyds Living and higher income from Lloyds Development Capital. This was partially offset by a 2% reduction in Commercial Banking year-on-year, reflecting higher transaction banking income more than offset by lower loan markets activity, with the prior period benefitting from gains that did not repeat.

REVIEW OF PERFORMANCE (continued)

Income statement A (continued)

Compared to the second quarter of 2025, underlying other income in the third quarter was up 3%, supported in Retail by continued UK Motor Finance growth and growth in current account debit card fees, alongside higher valuations in LBG Investments.

Operating lease depreciation of £1,075 million in the first nine months of 2025 was 8% higher than in the prior year (nine months to 30 September 2024: £994 million), due to fleet growth, the depreciation of higher value vehicles and declines in used electric