Company: LLOBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001654954-25-008460
Chunk: 36

Company: Lloyds Banking Group plc
Filing Date: 2025-07-24
Form: 6-K
Chunk 36
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 operational risk. Further information regarding the Group's principal risks is available on pages 144 to 198 in the Group's 2024 annual report and accounts.

### CAPITAL RISK

#### Overview

#### CET1 target capital ratio
The Board's view of the ongoing level of CET1 capital required by the Group to grow the business, meet current and future regulatory requirements and cover economic and business uncertainties is c.13.0%, which includes a management buffer of around 1%. This takes into account, amongst other considerations:

**● The minimum Pillar 1 CET1 capital requirement of 4.5% of risk-weighted assets

● The Group's Pillar 2A CET1 capital requirement, set by the PRA, which is the equivalent of around 1.5% of risk-weighted assets

● The Group's countercyclical capital buffer (CCyB) requirement, which is around 1.8% of risk-weighted assets

● The capital conservation buffer (CCB) requirement of 2.5% of risk-weighted assets

● The Ring-Fenced Bank (RFB) sub-group's other systemically important institution (O-SII) buffer of 2.0% of risk-weighted assets, which equates to 1.7% of risk-weighted assets at Group level

● The Group's PRA Buffer, set after taking account of the results of any PRA stress tests and other information, as well as outputs from the Group's own internal stress tests. The PRA requires this buffer to remain confidential

● The likely performance of the Group in various potential stress scenarios and ensuring capital remains resilient in these

● The economic outlook for the UK and business outlook for the Group

● The desire to maintain a progressive and sustainable ordinary dividend policy in the context of year-to-year earnings movements

Minimum requirement for own funds and eligible liabilities (MREL)**

The Group is not classified as a global systemically important bank (G-SIB) but is subject to the Bank of England's MREL statement of policy (MREL SoP) and must therefore maintain a minimum level of MREL resources. Applying the MREL SoP to current minimum capital requirements at 30 June 2025, the Group's MREL, excluding regulatory capital and leverage buffers, is the higher of 2 times Pillar 1 plus 2 times Pillar 2A, equivalent to 21.3% of risk-weighted assets, or 6.5%