Company: LLOBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001654954-25-008460
Chunk: 34

Company: Lloyds Banking Group plc
Filing Date: 2025-07-24
Form: 6-K
Chunk 34
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 in credit risk over the period since origination. Underlying ECL allowances have been calculated accordingly. The Group uses the underlying basis to monitor the creditworthiness of the lending portfolio and related ECL allowances. The statutory basis also includes an accounting adjustment within UK Motor Finance required under IFRS 9 to recognise a continuing involvement asset following the partial derecognition of a component of the Group's finance lease book via a securitisation in the third quarter of 2024.

The Group's alternative performance measures may not be comparable with similarly titled measures used by other organisations and should not be viewed in isolation, but instead should be regarded as supplementary information alongside the statutory results. The exclusion of certain adjustments from underlying profit may result in it being materially higher or lower than statutory profit before tax, for example in the event of a large restructuring, underlying profit would be higher than statutory profit before tax.

ALTERNATIVE PERFORMANCE MEASURES (continued)

The Group calculates a number of metrics that are used throughout the banking and insurance industries on an underlying basis. These metrics are not necessarily comparable to similarly titled measures presented by other companies and are not any more authoritative than measures presented in the financial statements, however management believes that they are useful in assessing the performance of the Group and in drawing comparisons between years. A description of these measures and their calculation, is given below. Alternative performance measures are used internally in the Group's Monthly Management Report.

| Asset quality ratio                                    |     | The underlying impairment charge or credit for the period in        
 respect of loans and advances to customers, both drawn and undrawn, 
 annualised and expressed as a percentage of average gross loans and 
 advances to customers for the period. This measure is useful in     
 assessing the credit quality of the loan book.                      |
| Banking net interest margin                            |     | Banking net interest income on customer and product balances in the 
 banking businesses annualised as a percentage of average gross      
 interest-earning banking assets for the period. This measure is     
 useful in assessing the banking profitability.                      |
| Cost:income ratio                                      |     | Total costs as a percentage of net income calculated on an          
 underlying basis. This measure is useful in assessing the           
 profitability of the Group's operations before the effects of the   
 underlying impairment credit or charge.                             |
| Gross written premiums                                 |     | Gross written premiums is a measure of the volume of General        
 Insurance business written during the period. This measure is       
 useful for assessing the growth of the General Insurance            
 business.                                                           |
| Life