Company: LLOBF
Filing Date: 2025-02-25
Form Type: 424B2
Source: 0000950103-25-002401
Chunk: 40

Company: Lloyds Banking Group plc
Filing Date: 2025-02-25
Form: 424B2
Chunk 40
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 an additional capital requirement of 1.7 per cent therefore applies at LBG level (though note that this does not form part of
the Group’s combined buffer requirement). This reflects that certain of the Group’s risk-weighted assets are held outside
the ring-fenced bank sub-group, where an O-SII buffer of 2.0 per cent is applied.

The PRA introduced a firm-specific Pillar 2B buffer
(the “PRA buffer”), which is set at a level that the PRA believes will ensure that a bank can continue to meet minimum
Pillar 1 and Pillar 2A requirements during a stressed period and may also be used to address any significant weaknesses in a firm’s
risk management and governance, and to reflect at Group level the application of the O-SII buffer to subsidiaries of the Group. The PRA
assesses the PRA buffer applicable to an institution annually (or more often if a firm’s circumstances change). Where the PRA considers
there is an overlap between the combined buffer and the PRA buffer, the PRA buffer will be set as the excess capital required over and
above the combined buffer. To the extent the PRA buffer is applicable, it must be met with 100% common equity Tier 1 capital, which will
be in addition to the common equity Tier 1 capital used to meet the Pillar 1 and Pillar 2A capital requirements and combined buffer requirements.
Further, failure to meet requirements of regulatory stress tests, or the failure by regulators to approve the stress test results and
capital plans of the Group, could result in the Group or certain of its members being required to enhance their capital position, including,
for example, an additional PRA buffer or through sectoral capital requirements set by the FPC.

The PRA has also introduced requirements in relation
to minimum leverage ratios pursuant to which we are required to meet (i) a minimum leverage ratio requirement set at 3.25% calculated
by dividing a firm’s Tier 1 capital by its total exposure measure (as defined in U.K. CRR) (the “PRA Leverage Ratio”),
(ii) an additional leverage ratio buffer that is calibrated at 35% of the O-SII buffer (“ALRB”) (applicable to the
Group from August 1, 2019) and (iii) a countercyclical leverage ratio buffer that is calibrated at 35% of the CCyB (“CCyLB”).