Company: LLOBF
Filing Date: 2025-02-25
Form Type: 424B2
Source: 0000950103-25-002401
Chunk: 29

Company: Lloyds Banking Group plc
Filing Date: 2025-02-25
Form: 424B2
Chunk 29
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 capital adequacy standards and guidelines set by the Relevant Regulator and changes in accounting rules.
Any indication that the Group’s CET1 Ratio is moving towards the level which would cause the occurrence of a Trigger Event may have
an adverse effect on the market price and liquidity of the Additional Tier 1 Securities. Therefore, investors may not be able to sell
their Additional Tier 1 Securities easily or at prices that will provide them with a yield comparable to other types of subordinated securities,
including LBG’s other subordinated debt securities. In addition, the risk of Automatic Conversion could drive down the price of
the Ordinary Shares and have a material adverse effect on the market value of Settlement Shares received upon Automatic Conversion.

Changes to the calculation of CET1 capital and/or
risk weighted assets may negatively affect LBG’s CET1 Ratio, thereby increasing the risk of a Trigger Event which would lead to
the Automatic Conversion, as a result of which your Additional Tier 1 Securities will automatically be converted into Settlement Shares.

LBG is required to calculate its capital
resources for regulatory purposes on the basis of “common equity tier 1 capital” or “CET1 Capital” as
determined in accordance with the Applicable Regulations, including Regulation (EU) No. 575/2013 as amended or supplemented, as it
forms part of domestic law in the United Kingdom by virtue of the EUWA and as amended (“U.K. CRR”). LBG is also
required to calculate its “risk weighted assets”, which represent assets adjusted for their associated risks, on the
basis set out in the Applicable Regulations, including U.K. CRR. Each of these definitions will be calculated in accordance with the
capital adequacy standards and guidelines of the Relevant Regulator applicable to LBG on the relevant date.

The U.K. CRR legislation sets out a minimum pace
of introduction of such enhanced capital requirements (the “Transitional Provisions”). The Transitional Provisions
were designed to implement certain U.K. CRR requirements in stages over a prescribed period commencing in 2014; however, each of the EU
Member States and the United Kingdom had the discretion to accelerate that minimum pace of transition in certain respects. In the United
Kingdom, the PRA accelerated the introduction of certain of the enhanced capital requirements under U.K. CRR, thus requiring the Group
to meet certain capital targets, without having regard to any Transitional Provisions in that respect. LBG has applied those Transitional
Provisions since January