Company: LLOBF
Filing Date: 2025-10-28
Form Type: 424B2
Source: 0000950103-25-013729
Chunk: 43

Company: Lloyds Banking Group plc
Filing Date: 2025-10-28
Form: 424B2
Chunk 43
---
At least 75% of the Tier 1 capital required to meet the PRA Leverage Ratio must consist of common equity Tier 1 capital (with the remainder
to be met with additional Tier 1 capital), while the ALRB and CCyLB must be met entirely with common equity Tier 1 capital. As at the
date of this prospectus supplement, the leverage ratio framework does not give rise to higher capital requirements, including regulatory
buffer requirements for the Group than the risk-based capital framework.

Failure to meet the PRA buffer or to satisfy leverage
ratios or other buffer requirements could result in the imposition of a capital restoration plan. Such capital restoration plan may impose
restrictions on discretionary payments, which may result in a need for management actions including the cancellation (in whole or in part)
of interest payments in respect of the Additional Tier 1 Securities.

Changes to the capital and leverage frameworks
may increase our capital requirements and may increase the risk that we will be subject to restrictions on distributions (resulting in
our being required to cancel (in whole or in part) interest payments in respect of the Additional Tier 1 Securities). For example, on
January 1, 2022, HM Treasury and the PRA made extensive revisions to the U.K. CRR and to the U.K. prudential framework to reflect its
approach to implementing binding standards for the Basel III leverage ratio. Our capital requirements, including Pillar 2A requirements,
by their nature, are calculated by reference to a number of factors, any one or a combination of which may not be easily observable or
capable of calculation by you. Investors may not be able to predict accurately the proximity of the risk of discretionary payments on
the Additional Tier 1 Securities being prohibited from time to time as a result of the operation of the Maximum Distributable Amount restrictions
and other regulatory constraints. See “—The circumstances surrounding or triggering the Automatic Conversion are inherently unpredictable and may be caused by factors outside of LBG’s control. LBG has no obligation to operate its business in such a way as, or take any mitigating actions, to maintain or restore its CET1 Ratio to avoid a Trigger Event and actions LBG takes could result in its CET1 Ratio falling.” In addition, although the PRA has indicated that a breach of the PRA buffer, unlike a breach of
the combined buffer requirement, will not lead to the automatic capital distribution restrictions resulting from the application of the
Maximum Distributable Amount restrictions, if