Company: LLOBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001654954-25-008460
Chunk: 15

Company: Lloyds Banking Group plc
Filing Date: 2025-07-24
Form: 6-K
Chunk 15
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Total costs, including remediation, of £4,911 million were 2% higher than the prior year. Operating costs of £4,874 million were up 4% reflecting inflationary pressures, strategic investment including planned higher severance front-loaded into the first quarter of 2025 and business growth costs, partly offset by cost savings and continued cost discipline. Operating costs are still expected to be c.£9.7 billion in 2025, including the impact of increased severance and National Insurance contribution changes (c.£0.1 billion) in year.

A remediation charge of £37 million was recognised by the Group in the first half of 2025 (half-year to 30 June 2024: £95 million), across a small number of rectification programmes. There have been no further charges to the provision relating to motor finance commission arrangements. The Supreme Court heard the appeal of the Wrench, Johnson and Hopcraft decision in early April. The FCA has indicated that the Supreme Court decision will inform its next steps for both the discretionary commission arrangements (DCA) review and non-DCA complaints and that it will provide an update within six weeks of the Supreme Court decision. In establishing the provision of £1.15 billion, the Group has considered a number of scenarios to address uncertainties around a number of key assumptions. These include a range of potential Supreme Court outcomes, regulatory responses including steps that the FCA may take, and outcomes in relation to redress.

SUMMARY OF GROUP RESULTS (continued)

Income statement - underlying basis A (continued)

The Group's cost:income ratio including remediation for the first half of 2025 was 55.1% (half-year to 30 June 2024: 57.1%), with net income up 6%, partly offset by 2% higher total costs.

Underlying impairment A

|                                    | Half-year to 
       30 Jun 
         2025 
           £m |     | Half-year to 
       30 Jun 
         2024 
           £m |     | Change 
      % |     | Half-year to 
       31 Dec 
         2024 
           £m |     | Change 
      % |
| Charges (credits) pre-updated MES1 |              |     |              |     |        |     |              |     |        |
| Retail                             |          426 |