Company: LLOBF
Filing Date: 2025-02-20
Form Type: 6-K
Source: 0001654954-25-001688
Chunk: 50

Company: Lloyds Banking Group plc
Filing Date: 2025-02-20
Form: 6-K
Chunk 50
---
3,481 |
| At 31 December 2023 |          |     |              |     |     |              |                                 |     |       |      |     |       |
| UK mortgages        |      991 |     |              |   - |     |              |                              61 |     |       |   63 |     | 1,115 |
| Credit cards        |      703 |     |              |   - |     |              |                              92 |     |       |   15 |     |   810 |
| Other Retail        |      866 |     |              |   - |     |              |                              33 |     |       |   46 |     |   945 |
| Commercial Banking  |    1,124 |     |              | 340 |     |              |                               - |     |       | -282 |     | 1,182 |
| Other               |       32 |     |              |   - |     |              |                               - |     |       |    - |     |    32 |
| Total               |    3,716 |     |              | 340 |     |              |                             186 |     |       | -158 |     | 4,084 |

**Application of judgement in adjustments to modelled ECL**

Impairment models fall within the Group's model risk framework with model monitoring, periodic validation and back testing performed on model components, such as probability of default. Limitations in the models or data inputs may be identified through these assessments and review of model outputs, which may require appropriate judgemental adjustments to the ECL. These adjustments are determined by considering the particular attributes of exposures which have not been adequately captured by the impairment models and range from changes to model inputs and parameters, at account level (in-model adjustments), through to more qualitative post-model adjustments.

During 2022 and 2023 the intensifying inflationary pressures, alongside rising interest rates created further risks not deemed to be fully captured by ECL models which meant judgemental adjustments were required. Throughout 2024 these risks subsided with inflation back at around 2 per cent, base rates reducing and credit performance proving resilient. As a result, the judgements held in respect of inflationary and interest rate risks have been removed (2023: £186 million). Other judgements continue to be applied for broader data and model limitations, both increasing and decreasing ECL where deemed necessary.

NOTES TO THE CON