Company: LLOBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001654954-25-008460
Chunk: 41

Company: Lloyds Banking Group plc
Filing Date: 2025-07-24
Form: 6-K
Chunk 41
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|                                      |     3,383 |     |     3,461 |
| Loans and advances to banks          |         1 |     |         1 |
| Debt securities                      |         4 |     |         4 |
| Other assets                         |        14 |     |        15 |
| Total expected credit loss allowance |     3,402 |     |     3,481 |
| Acquisition fair value adjustment    |       143 |     |       170 |
| Total expected credit loss allowance 
 (underlying basis)A                  |     3,545 |     |     3,651 |
| of which: Customer related balances  
 (underlying basis)A                  |     3,526 |     |     3,631 |
| of which: Drawn (underlying          
 basis)A                              |     3,304 |     |     3,361 |

**Total expected credit loss allowance sensitivity to economic assumptions - statutory and underlying A basis**

The measurement of ECL reflects an unbiased probability-weighted range of possible future economic outcomes. The Group achieves this by generating four economic scenarios to reflect the range of outcomes; the central scenario reflects the Group's base case assumptions used for medium-term planning purposes, an upside and a downside scenario are also selected together with a severe downside scenario. If the base case moves adversely, it generates a new, more adverse downside and severe downside which are then incorporated into the ECL. Consistent with prior years, the base case, upside and downside scenarios carry a 30% weighting; the severe downside is weighted at 10%.

The following table shows the Group's ECL for the probability-weighted, upside, base case, downside and severe downside scenarios, with the severe downside scenario incorporating adjustments made to CPI inflation and UK Bank Rate paths. The stage allocation for an asset is based on the overall scenario probability-weighted probability of default and hence the staging of assets is constant across all the scenarios. In each economic scenario the ECL for individual assessments is held constant reflecting the basis on which they are evaluated. Judgemental adjustments applied through changes to model inputs or parameters, or more qualitative post model adjustments, are apportioned across the scenarios in proportion to modelled ECL where this better reflects the sensitivity of these adjustments to each scenario. The probability-weighted view shows the extent to which a higher ECL allowance has been recognised to take account of multiple economic scenarios relative to the base case; the uplift on a statutory basis