Other share plans Lloyds Banking Group Executive Share Ownership Plan The plan, introduced in 2006, is aimed at delivering shareholder value by linking the receipt of shares to an improvement in the performance of the Group over a three year period. Awards are made within limits set by the rules of the plan, with the limits determining the maximum number of shares that can be awarded equating to three times annual salary. In exceptional circumstances this may increase to four times annual salary.
The weighted average fair value of awards granted in the year was £0.48 (2017: £0.57).
The fair value calculations at 31 December 2018 for grants made in the year, using Black‑Scholes models and Monte Carlo simulation, are based on the following assumptions: Save-As-You-Earn
Exercised/lapsed (includes entitlements of former key management personnel) (37) (20) (46)
Repayments (includes loans of former key management personnel) (1) (3) (4)
Withdrawn (includes deposits of former key management personnel) (33) (33) (42)
At 31 December 2018, transactions, arrangements and agreements entered into by the Group’s banking subsidiaries with directors and connected persons included amounts outstanding in respect of loans and credit card transactions of £0.5 million with 3 directors and 3 connected persons (2017: £0.01 million with three directors and two connected persons; 2016: £0.4 million with five directors and two connected persons).
Subsidiaries Details of the Group’s subsidiaries and related undertakings are provided on pages 289 to 295. In accordance with IFRS 10 Consolidated financial statements, transactions and balances with subsidiaries have been eliminated on consolidation.
Mortgage arrears handling activities – FCA investigation On 26 May 2016, the Group was informed that an enforcement team at the FCA had commenced an investigation in connection with the Group’s mortgage arrears handling activities. This investigation is ongoing and the Group continues to cooperate with the FCA. It is not currently possible to make a reliable assessment of any liability that may result from the investigation including any financial penalty or public censure.
HBOS Reading – FCA investigation On 7 April 2017 the FCA announced that it had resumed its investigation into the events surrounding the discovery of misconduct within the Reading‑based Impaired Assets team of HBOS. The investigation is ongoing and the Group continues to cooperate with the FCA. It is not currently possible to make a reliable assessment of any liability that may result from the investigation including any financial penalty or public censure.
Capital commitments Excluding commitments in respect of investment property (note 26), capital expenditure contracted but not provided for at 31 December 2018 amounted to £378 million (2017: £444 million). Of this amount, £369 million (2017: £440 million) related to assets to be leased to customers under operating leases. The Group’s management is confident that future net revenues and funding will be sufficient to cover these commitments.
(A) Asset-backed conduits In addition to the structured entities discussed in note 30, which are used for securitisation and covered bond programmes, the Group sponsors an active asset‑backed conduit, Cancara, which invests in client receivables and debt securities. The total consolidated exposure of Cancara at 31 December 2018 was £5,122 million (2017: £6,049 million), comprising £5,012 million of loans and advances (2017: £5,939 million) and £110 million of debt securities (2017: £110 million).
(B) Consolidated collective investment vehicles and limited partnerships The assets of the Insurance business held in consolidated collective investment vehicles, such as Open‑Ended Investment Companies and limited partnerships, are not directly available for use by the Group. However, the Group’s investment in the majority of these collective investment vehicles is readily realisable. As at 31 December 2018, the total carrying value of these consolidated collective investment vehicle assets and liabilities held by the Group was £62,648 million (2017: £68,124 million).
The Group sponsors a range of diverse investment funds and limited partnerships where it acts as the fund manager or equivalent decision maker and markets the funds under one of the Group’s brands.
The Group earns fees from managing the investments of these funds. The investment management fees that the Group earned from these entities, including those in which the Group held no ownership interest at 31 December 2018, are reported in note 6.
Derivative financial instruments 1,563 22,032 – – – – – 23,595
Items in course of transmission to banks – – – – – 636 – 636
Derivative financial instruments 1,108 20,265 – – – – – 21,373
Notes in circulation – – – – – 1,104 – 1,104
Unallocated surplus within insurance businesses – – – – – – 382 382
Financial assets at fair value through profit or loss – 42,236 120,642 – – – 162,878
Financial liabilities at fair value through profit or loss – 43,062 7,815 – – – 50,877
Debt securities in issue – – – – 72,450 – 72,450
The Group manages valuation adjustments for its derivative exposures on a net basis; the Group determines their fair values on the basis of their net exposures. In all other cases, fair values of financial assets and liabilities measured at fair value are determined on the basis of their gross exposures.
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 243
Note 49: Financial instruments continued Valuation control framework The key elements of the control framework for the valuation of financial instruments include model validation, product implementation review and independent price verification. These functions are carried out by appropriately skilled risk and finance teams, independent of the business area responsible for the products.
Level 2 Level 2 valuations are those where quoted market prices are not available, for example where the instrument is traded in a market that is not considered to be active or valuation techniques are used to determine fair value and where these techniques use inputs that are based significantly on observable market data. Examples of such financial instruments include most over‑the‑counter derivatives, financial institution issued securities, certificates of deposit and certain asset‑backed securities.
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 245
Debt securities: Bank and building society certificates of deposit – 167 – 167
Transfers out of the level 3 portfolio (463) (284) (747) (242) (39) (281)
Liabilities held at fair value through profit or loss 3 7,812 – 7,815
Total financial liabilities carried at fair value, excluding derivatives 1,109 49,768 – 50,877
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 247
At 31 December 2018, the own credit adjustment arising from the fair valuation of £7,085 million (2017: £7,812 million) of the Group’s debt securities in issue designated at fair value through profit or loss resulted in a gain of £533 million (2017: loss of £55 million), before tax, recognised in other comprehensive income.
Certain unobservable inputs are used to calculate CVA, FVA, and own credit adjustments, but are not considered significant in determining the classification of the derivative and debt portfolios. Consequently, those inputs do not form part of the Level 3 sensitivities presented.
Transfers out of the level 3 portfolio – – (216) –
The CVA is sensitive to: – the current size of the mark‑to‑market position on the uncollateralised asset; – expectations of future market volatility of the underlying asset; and – expectations of counterparty creditworthiness.
The combination of a one notch deterioration in the credit rating of derivative counterparties and a ten per cent increase in LGD increases the CVA by £89 million. Current market value is used to estimate the projected exposure for products not supported by the model, which are principally complex interest rate options that are traded in very low volumes. For these, the CVA is calculated on an add‑on basis (although no such adjustment was required at 31 December 2018).
Gross interest rates, inferred spreads (bps) 97bps/208bps 10,565 380 (371) – – –
Unlisted equities, debt securities and property partnerships in the life funds
Underlying asset/net asset value (incl. property prices) , broker quotes or discounted cash flows3 n/a
Financial assets at fair value through other comprehensive income/available-for-sale financial assets
Financial assets at amortised cost: Loans and advances to customers: Stage 1 441,006 440,542 – 40,483 400,059
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 251
Repos included in above amounts: Deposits from banks 23,175 23,175 – 23,175 –
As set out in note 30, included within financial assets measured at amortised cost are loans transferred under the Group’s securitisation and covered bond programmes. As the Group retains all of a majority of the risks and rewards associated with these loans, including credit, interest rate, prepayment and liquidity risk, they remain on the Group’s balance sheet. Assets transferred into the Group’s securitisation and covered bond programmes are not available to be used by the Group whilst the assets are within the programmes. However, the Group retains the right to remove loans from the covered bond programmes where they are in excess of the programme’s requirements. In addition, where the Group has retained some of the notes issued by securitisation and covered bond programmes, the Group has the ability to sell or pledge these retained notes.
Financial assets at fair value through profit or loss 6,815 961 9,946 3,257
Financial assets at amortised cost: Loans and advances to customers1 41,674 5,479 35,475 3,660 1 The carrying value of associated liabilities excludes securitisation notes held by the Group of £31,701 million (31 December 2017: £21,536 million) .
Financial assets at fair value through profit or loss: Loans and advances to banks: Loans and advances to customers: Financial assets at fair value through other comprehensive income 24,815 – 24,815 – (5,361) 19,454
Deposits from banks: Customer deposits: Financial liabilities at fair value through profit or loss: 1 After impairment allowance.
2 The amounts set off in the balance sheet as shown above represent derivatives and repurchase agreements with central clearing houses which meet the criteria for offsetting under IAS 32.
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 255
(B) Currency risk The corporate and retail businesses incur foreign exchange risk in the course of providing services to their customers. All non‑structural foreign exchange exposures in the non‑trading book are transferred to the trading area where they are monitored and controlled. These risks reside in the authorised trading centres who are allocated exposure limits. The limits are monitored daily by the local centres and reported to the market and liquidity risk function in London. Associated VaR and the closing, average, maximum and minimum are disclosed on page 159. The Group also manages foreign currency risk via cash flow hedge accounting, utilising currency swaps.
The Group ceased all hedging of the currency translation risk of the net investment in foreign operations on 1 January 2018. At 31 December 2017 the Group used foreign currency borrowings with an aggregate principal of £41 million to hedge currency translation risk. In 2017, an ineffectiveness loss of £11 million before tax and £8 million after tax was recognised in the income statement arising from net investment hedges.
(A) Maximum credit exposure The maximum credit risk exposure of the Group in the event of other parties failing to perform their obligations is detailed below. No account is taken of any collateral held and the maximum exposure to loss, which includes amounts held to cover unit‑linked and With Profits funds liabilities, is considered to be the balance sheet carrying amount or, for non‑derivative off‑balance sheet transactions and financial guarantees, their contractual nominal amounts.
Financial assets at fair value through other comprehensive income/available‑for‑sale financial assets3 24,794 – 24,794 40,901 – 40,901
Off‑balance sheet items: Other items serving as direct credit substitutes 632 – 632 740 – 740
Personal: Total loans and advances to customers before allowance for impairment losses 488,008 464,239 474,699
Below standard, but not credit‑impaired – 899 907 54 – 1,860
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 259
Below standard, but not credit‑impaired – 861 823 469 – 2,153
Below standard, but not credit‑impaired – – 5 – – 5
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 261
2 Other comprises sub‑investment grade (31 December 2018: £6 million; 1 January 2018: £nil) and not rated (31 December 2018: £36 million; 1 January 2018: £23 million) .
Debt securities: Bank and building society certificates of deposit 118 – 118 167 – 167
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 263
Trading assets: Asset‑backed securities: Corporate and other debt securities 228 19 247 469 54 523
Total held as trading assets 7,493 19 7,512 10,481 159 10,640
Total held at fair value through profit or loss 38,212 1,956 40,168 42,895 2,303 45,198 1 Credit ratings equal to or better than ‘BBB’.
Credit risk in respect of trading and other financial assets at fair value through profit or loss held within the Group’s unit‑linked funds is borne by the policyholders and credit risk in respect of with‑profits funds is largely borne by the policyholders. Consequently, the Group has no significant exposure to credit risk for such assets which back those contract liabilities.
Stage 1 and Stage 2 non‑mortgage retail lending amounted to £52,450 million (2017: unimpaired non‑mortgage lending amounted to £49,482 million). Lending decisions are predominantly based on an obligor’s ability to repay from normal business operations rather than reliance on the disposal of any security provided. Collateral values are rigorously assessed at the time of loan origination and are thereafter monitored in accordance with business unit credit policy.
Stage 3 secured commercial lending and associated collateral relates to lending to property companies and to customers in the financial, business and other services; transport, distribution and hotels; and construction industries.
Financial assets at fair value through profit or loss (excluding equity shares) Included in financial assets at fair value through profit or loss are reverse repurchase agreements treated as collateralised loans with a carrying value of £28,356 million (2017: £31,590 million). Collateral is held with a fair value of £36,101 million (2017: £39,099 million), all of which the Group is able to repledge. At 31 December 2018, £31,013 million had been repledged (2017: £31,281 million).
Collateral repossessed During the year, £245 million of collateral was repossessed (2017: £297 million), consisting primarily of residential property.
Customer deposits Included in customer deposits are balances arising from repurchase transactions of £1,818 million (2017: £2,638 million); the fair value of the collateral provided under these agreements at 31 December 2018 was £1,710 million (2017: £2,640 million).
Financial assets at fair value through other comprehensive income (2017: available‑for‑sale financial assets) 1,917 2,608
Liquidity risk Liquidity risk is defined as the risk that the Group has insufficient financial resources to meet its commitments as they fall due, or can only secure them at excessive cost. Liquidity risk is managed through a series of measures, tests and reports that are primarily based on contractual maturity. The Group carries out monthly stress testing of its liquidity position against a range of scenarios, including those prescribed by the PRA. The Group’s liquidity risk appetite is also calibrated against a number of stressed liquidity metrics.
Cash and balances at central banks 58,519 2 – – – – – – 58,521
Derivative financial instruments and financial liabilities at fair value through profit or loss 19,215 16,932 4,933 3,419 948 1,961 4,298 25,295 77,001
Note 52: Financial risk management continued The table below analyses financial instrument liabilities of the Group, excluding those arising from insurance and participating investment contracts, on an undiscounted future cash flow basis according to contractual maturity, into relevant maturity groupings based on the remaining period at the balance sheet date; balances with no fixed maturity are included in the over 5 years category.
Financial liabilities at fair value through profit or loss 21,286 14,424 6,499 4,251 13,044 59,504
Derivative financial liabilities: Gross settled derivatives – net flows 822 1,002 1,037 (79) (1,460) 1,322
The principal amount for undated subordinated liabilities with no redemption option is included within the over five years column; interest of approximately £27 million (2017: £24 million) per annum which is payable in respect of those instruments for as long as they remain in issue is not included beyond five years.
Note 53: Consolidated cash flow statement (A) Change in operating assets 2018 £m 2017 £m £m
Change in financial assets held at amortised cost (27,038) (24,747) 710
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 269
Included within cash and cash equivalents at 31 December 2018 is £40 million (31 December 2017: £2,322 million; 1 January 2018 £48 million; 31 December 2016: £14,475 million) held within the Group’s long‑term insurance and investments businesses, which is not immediately available for use in the business.
(E) Acquisition of group undertakings and businesses 2018 £m 2017 £m 2016 £m
Net cash outflow arising from acquisition of subsidiaries and businesses 26 1,893 –
(F) Disposal and closure of group undertakings and businesses 2018 £m 2017 £m 2016 £m
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 271
Note 54: Adoption of IFRS 9 and IFRS 15 The following table summarises the adjustments arising on the adoption of IFRS 9 and IFRS 15 (see below) to the Group’s balance sheet as at 1 January 2018.
Cash and balances at central banks 58,521 − − − 58,521
Financial assets at fair value through other comprehensive income 42,917 − − 42,917
IFRS 9 Financial Instruments Impairment The Group adopted IFRS 9 from 1 January 2018. In accordance with the transition requirements of IFRS 9, comparative information for 2017 has not been restated and transitional adjustments have been accounted for through retained earnings as at 1 January 2018, the date of initial application; and as a result shareholders’ equity reduced by £1,180 million, driven by the effects of additional impairment provisions following the implementation of the expected credit loss methodology and measurement adjustments following the reclassification of certain financial assets to be measured at fair value rather than amortised cost. It is not practicable to quantify the impact of adoption of IFRS 9 on the results for the current year.
The net impact of IFRS 9 on transition was an increase in impairment allowances of £1,276 million which is analysed as follows: IAS 39 Latent risk £m 12‑month expected loss £m
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 273
Financial liabilities at fair value through profit or loss 50,877 48 – 48 10 50,935
Loans and advances accounted for at amortised cost reduced by £13,167 million largely driven by: – lending assets transferred from the banking business to the insurance business in recent years totalling £6,882 million which had been accounted for at amortised cost in the Group’s accounts under IAS 39. Upon implementation of IFRS 9, these assets were been designated at FVTPL, in common with other assets within the insurance business, as they are backing insurance and investment contract liabilities which either have cash flows that are contractually based upon the performance of the assets or are contracts whose measurement takes account of current market conditions and where significant measurement inconsistencies would otherwise arise. Loans and advances to banks of £2,274 million were transferred to FVTPL for similar reasons. – assets held by the Commercial business totalling £3,116 million were reclassified to FVTPL having not met the requirements of the SPPI test. These assets are principally holdings of notes issued by securitisation vehicles. Whilst the credit quality of these notes is generally good, there is a contractual linkage to the underlying asset pools which are exposed to residual value risk. – A further £847 million of Commercial lending assets were reclassified following changes in the business model.
IFRS 15 Revenue from Contracts with Customers The Group has adopted IFRS 15 from 1 January 2018 and in nearly all cases the Group’s existing accounting policy was consistent with the requirements of IFRS 15; however, certain income streams within the Group’s car leasing business are now deferred, resulting in an additional £14 million being recognised as deferred income at 1 January 2018 with a corresponding debit of £11 million, net of tax, to shareholders’ equity. As permitted by the transition options under IFRS 15, comparative figures for the prior year have not been restated. The impact of adoption of IFRS 15 on the current period is not material.
Accounting policies applied for comparative periods In accordance with the transition requirements of IFRS 9 and IFRS 15, comparative information has not been restated. The comparative information was prepared in accordance with IAS 39 and IAS 18. With the exception of certain income streams within the Group’s car leasing business, the Group accounting policy under IAS 18 was substantially aligned with the requirements of IFRS 15 and is not reproduced here; the principal policies applied by the Group under IAS 39 are set out below: Impairment At each balance sheet date the Group assesses whether, as a result of one or more events occurring after initial recognition of a financial asset accounted for at amortised cost and prior to the balance sheet date, there is objective evidence that a financial asset or group of financial assets has become impaired. Where such an event, including the identification of fraud, has had an impact on the estimated future cash flows of the financial asset or group of financial assets, an impairment allowance is recognised. The amount of impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate.
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 275
Parent company statement of changes in equity for the year ended 31 December 276 Lloyds Banking Group Annual Report and Accounts 2018
Movement in treasury shares – – – (301) (301) – (301)
Distributions on other equity instruments, net of tax2 – – – (336) (336) – (336)
Other employee award schemes – – – 332 332 – 332
Adjustment on adoption of IFRS 9 (note 1) – – – (2) (2) – (2)
Distributions on other equity instruments, net of tax2 – – – (351) (351) – (351)
Movement in treasury shares – – – (74) (74) – (74)
2 Distributions on other equity instruments are shown net of tax of £82 million (2017: £79 million; 2016: £82 million) credited to retained profits.
Net cash provided by (used in) operating activities 6,689 8,221 (7,550)
Net cash (used in) provided by investing activities (5,911) (5,058) 9,481
Cash and cash equivalents at beginning of year 272 42 24
Notes to the parent company financial statements for the year ended 31 December 278 Lloyds Banking Group Annual Report and Accounts 2018
Note 2: Amounts due from subsidiaries These comprise short‑term lending to subsidiaries, repayable on demand. As required by IFRS 9, the Company has established an allowance for impairment losses for amounts due from its subsidiaries (31 December 2018: £5 million; 1 January 2018: £2 million) based on the probability of its subsidiaries defaulting on the amounts payable in the next 12 months. The carrying value of the amounts owed by subsidiaries is a reasonable approximation to fair value.
Movements in the capital redemption reserve were as follows: 2018 £m 2017 £m 2016 £m
2 Details of the Company's share buyback programme are provided in note 41 to the consolidated financial statements.
Note 6: Debt securities in issue These comprise notes issued by the Company in a number of currencies, although predominantly Euros and US dollars, with maturity dates ranging up to 2038.
Note 7: Subordinated liabilities These liabilities will, in the event of the winding‑up of the issuer, be subordinated to the claims of depositors and all other creditors of the issuer. Any repayments of subordinated liabilities require the consent of the Prudential Regulation Authority.
Ordinary share capital Other capital instruments Total 2018 £m 2017 £m 2018 £m 2017 £m 2018 £m 2017 £m
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 281
Held for trading at fair value through profit or loss £m
The derivative assets designated as hedging instruments represent level 2 portfolios.
Being able to refer customers to the Lloyds Banking Group Cancer Support Team gives us confidence that they will receive the best possible support from a team trained by Macmillan. Louise, Financial Guide
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 285
Profit after tax for the year 4,400 3,547 2,514 956 1,499
Net asset value per ordinary share 61.0p 60.5p 60.2p 57.9p 60.7p
Number of ordinary shares in issue (millions) 4 71,164 71,973 71,374 71,374 71,374
3 Dividends per ordinary share in 2016 include a recommended special dividend of 0.5 pence (2015: 0.5 pence).
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 287
The information, statements and opinions contained in this Annual Report do not constitute a public offer under any applicable law or an offer to sell any securities or financial instruments or any advice or recommendation with respect to such securities or financial instruments.
Business as usual costs Operating costs, less investment expensed and depreciation.
Bank of Scotland Leasing Ltd (In liquidation) 13 Bank of Scotland LNG Leasing (No 1) Ltd
Capital Bank Leasing 1 Ltd (In liquidation) 13 Capital Bank Leasing 2 Ltd (In liquidation) 13 Capital Bank Leasing 3 Ltd 2 Capital Bank Leasing 4 Ltd (In liquidation) 13 Capital Bank Leasing 5 Ltd 2 Capital Bank Leasing 6 Ltd (In liquidation) 13 Capital Bank Leasing 7 Ltd (In liquidation) 13 Capital Bank Leasing 8 Ltd (In liquidation) 73 Capital Bank Leasing 9 Ltd (In liquidation) 2 Capital Bank Leasing 10 Ltd (In liquidation) 13 Capital Bank Leasing 11 Ltd (In liquidation) 13 Capital Bank Leasing 12 Ltd 5 Capital Bank Property Investments (3) Ltd 2 Capital Bank Vehicle Management Ltd
Clerical Medical Properties Ltd (In liquidation) 13 Cloak Lane Funding Sarl 56 Cloak Lane Investments Sarl 56 CM Venture Investments Ltd 23 iv CMI Insurance (Luxembourg) S.A. (In liquidation) 24 Conquest Securities Ltd 1 iv vi Corbiere Asset Investments Ltd 1 i ii Create Services Ltd 1 Dalkeith Corporation 25 Delancey Arnold UK Ltd (In liquidation) 26 Delancey Rolls UK Ltd (In liquidation) 26 Dunstan Investments (UK) Ltd 1 Enterprise Car Finance Ltd (In liquidation) 7 i #
Halifax Mortgage Services Ltd 4 Halifax Nominees Ltd 4 Halifax Pension Nominees Ltd 29 Halifax Premises Ltd 1 Halifax Share Dealing Ltd 4 Halifax Vehicle Leasing (1998) Ltd 4 HBOS Capital Funding (Jersey) Ltd (In liquidation) 62 HBOS Covered Bonds LLP 4 * HBOS Directors Ltd (In liquidation) 13 HBOS Final Salary Trust Ltd 5 HBOS Financial Services Ltd 20 HBOS Insurance & Investment Group Ltd 20 HBOS International Financial Services
Home Shopping Personal Finance Ltd 4 Horizon Capital 2000 Ltd 5 Housing Growth Partnership GP LLP 1 * Housing Growth Partnership LP 1 * # Housing Growth Partnership Ltd 1 i ii Housing Growth Partnership Manager Ltd 1 HSDL Nominees Ltd 4 HVF Ltd 2 Hyundai Car Finance Ltd 7 i ii IBOS Finance Ltd 2 ICC Enterprise Partners Ltd (In liquidation) 32 ICC Equity Partners Ltd (In liquidation) 32 ICC Holdings Unlimited Company 16 ICC Software Partners Ltd (In liquidation) 32 Inchcape Financial Services Ltd 2 i ii # Industrial Real Estate (General Partner) Ltd
Lloyds Banking Group Pensions Trustees Ltd 1 Lloyds Capital GP Limited 62 Lloyds Commercial Leasing Ltd (In liquidation) 13 Lloyds Commercial Properties Ltd (In liquidation) 6 Lloyds Commercial Property Investments Ltd
Lloyds Corporate Services (Jersey) Ltd 58 Lloyds Development Capital (Holdings) Ltd 40 Lloyds Engine Capital (No.1) U.S LLC 14 * Lloyds Far East Sarl 56 Lloyds General Leasing Ltd 1 Lloyds Group Holdings (Jersey) Ltd 47 i #
Lloyds Property Investment Company No. 4 Ltd 1 Lloyds Property Investment Company No.5 Ltd 1 Lloyds Secretaries Ltd 1 Lloyds Securities Inc. 14 Lloyds Trust Company (Gibraltar) Ltd
St Andrew’s Group Ltd 20 St Andrew’s Insurance plc 20 St Andrew’s Life Assurance plc 20 St. Mary’s Court Investments 1 Standard Property Investment (1987) Ltd 17 i ii Standard Property Investment Ltd 5 # Starfort Ltd (In liquidation) 13 Sussex County Homes Ltd 4 Suzuki Financial Services Ltd 79 i ii # SWB (67 Morrison Street) PLC (In liquidation) 73 SW No.1 Ltd 3 SWAMF (GP) Ltd 20 SWAMF Nominee (1) Ltd 20 SWAMF Nominee (2) Ltd 20 SW Funding plc 3 # Target Corporate Services Ltd (In liquidation) 1 The Agricultural Mortgage Corporation plc 45 The British Linen Company Ltd 5 The Mortgage Business plc 4 Thistle Leasing + * Three Copthall Avenue Ltd 1 Tower Hill Property Investments (7) Ltd 2 # Tower Hill Property Investments (10) Ltd 2 # Tranquility Leasing Ltd 1 TUTP17 Management GMBH 17 Uberior (Moorfield) Limited 5 Uberior Co-Investments Ltd 5 Uberior ENA Ltd 5 Uberior Equity Ltd 5 Uberior Europe Ltd 5 Uberior Fund Investments Ltd 5 Uberior Infrastructure Investments Ltd 5 Uberior Infrastructure Investments (No.2) Ltd 1 Uberior Investments Ltd 5 Uberior Nominees Ltd 5 * Uberior Trading Ltd 5 Uberior Trustees Ltd 5 * Uberior Ventures Australia Pty Ltd 8 Uberior Ventures Ltd 5 UDT Autolease Ltd (In liquidation) 1 UDT Budget Leasing Ltd 1 UDT Ltd (In liquidation) 1 UDT Sales Finance Ltd (In liquidation) 1 United Dominions Leasing Ltd 1 United Dominions Trust Ltd 1 Universe, The CMI Global Network Fund 70 * Upsaala Ltd 16 Vehicle Leasing (4) Ltd (In liquidation) 13 Ward Nominees (Abingdon) Ltd 1 Ward Nominees (Birmingham) Ltd 1 Ward Nominees (Bristol) Ltd 1 Ward Nominees Ltd 1 Warwick Leasing Ltd (In liquidation) 13 Waverley – Fund II Investor LLC 25 Waverley – Fund III Investor LLC 25 Waymark Asset Investments Ltd 1 i ii WCS Ltd (In liquidation) 60 West Craigs Ltd 5 Wood Street Leasing Ltd 1
O ther inform ation Lloyds Banking Group Annual Report and Accounts 2018 291
Edgbaston RMBS 2010-1 plc 44 Edgbaston RMBS Holdings Ltd 44 Elland RMBS 2018 plc 44 Elland RMBS Holdings Limited 44 Fontwell Securities 2016 Ltd 61 Gresham Receivables (No. 1) Ltd 63 Gresham Receivables (No. 3) Ltd 63 Gresham Receivables (No. 10) Ltd 63 Gresham Receivables (No.11) UK Ltd 69 Gresham Receivables (No. 12) Ltd 63 Gresham Receivables (No. 13) UK Ltd 69 Gresham Receivables (No. 14) UK Ltd 69 Gresham Receivables (No. 15) UK Ltd 69 Gresham Receivables (No. 16) UK Ltd 69 Gresham Receivables (No. 19) UK Ltd 69 Gresham Receivables (No. 20) Ltd 63 Gresham Receivables (No. 21) Ltd 63 Gresham Receivables (No. 22) Ltd 63 Gresham Receivables (No. 23) Ltd 63 Gresham Receivables (No. 24) Ltd 63 Gresham Receivables (No. 25) UK Ltd 69 Gresham Receivables (No. 26) UK Ltd 69 Gresham Receivables (No.27) UK Ltd 69 Gresham Receivables (No.28) Ltd 63 Gresham Receivables (No.29) Ltd 63 Gresham Receivables (No. 30) UK Ltd 69 Gresham Receivables (No. 31) UK Ltd 69 Gresham Receivables (No. 32) UK Ltd 69 Gresham Receivables (No. 33) UK Ltd 69 Gresham Receivables (No. 34) UK Ltd 69 Gresham Receivables (No.35) Ltd 63 Gresham Receivables (No.36) UK Ltd 69 Gresham Receivables (No.37) UK Ltd 69 Gresham Receivables (No.38) UK Ltd 69 Gresham Receivables (No.39) UK Ltd 69 Gresham Receivables (No.40) UK Ltd 69 Gresham Receivables (No.41) UK Ltd 69 Gresham Receivables (No. 42) Ltd 63 Gresham Receivables (No.44) UK Ltd 69 Gresham Receivables (No.45) UK Ltd 69 Gresham Receivables (No.46) UK Ltd 69 Gresham Receivables (No.47) UK Limited 69 Guildhall Asset Purchasing Company (No 3) Ltd 63 Guildhall Asset Purchasing Company (No.11) UK Ltd 69 Hart 2014-1 Ltd 36 Leicester Securities 2014 Ltd 71 Lingfield 2014 I Holdings Ltd 44 Lingfield 2014 I plc 44 Lloyds Bank Covered Bonds (Holdings) Ltd 44 Lloyds Bank Covered Bonds (LM) Ltd 44 Molineux RMBS 2016-1 plc 44 Molineux RMBS Holdings Ltd 44
BNY MELLON MANAGED FUNDS II 10 BNY Mellon MF II – Absolute Insight Fund 74%
HBOS UK INVESTMENT FUNDS ICVC 1 UK Equity Income Fund 62% UK Growth Fund 62% UK FTSE All-Share Index Tracking Fund 58%
Corporate Bond PPF Fund 100% SW Corporate Bond Tracker 100% Scottish Widows GTAA 1 84% Corporate Bond 1 Fund 100% Balanced Growth Fund 27% Adventurous Growth Fund 71%
Global Growth Fund 54% European Growth Fund 90% American Growth Fund 85% Pacific Growth Fund 77% Japan Growth Fund 96%
UBS INVESTMENT FUNDS ICVC 17 UBS Global Optimal Fund 23% UBS UK Opportunities Fund 37%
Principal place of business for collective investment vehicles (1) Trinity Road, Halifax West Yorkshire, HX1 2RG (2) 15 Dalkeith Road Edinburgh EH16 5WL (3) 39/40 Upper Mount Street, Dublin, Ireland (4) 20 Churchill Place, Canary Wharf, London E14 5HJ (5) BNP Paribas InstiCash, 10, Rue Edward Steichen, L-2540 Luxembourg, Grand-Duche de
Luxembourg (19) Jackson House, 18 Saville Row, London, W1S 3PW (20) GEORGE’S COURT, 54-62 TOWNSEND STREET, DUBLIN 2, IRELAND (21) Thesis Unit Trust Management Limited, Exchange Building, St. John’s Street, Chichester,
̂Shares held directly by Lloyds Banking Group plc & The Group holds voting rights of between 20% and 49.9% ~ The Group holds voting rights of 50%
Australia (9) 1 Brookhill Way, Banbury, Oxon, OX16 3EL (10) Sanne Group, 13 Castle Street, St. Helier, Jersey, JE4 5UT (11) 26th Floor, Oxford House, Taikoo Place, Quarry Bay, Hong Kong (12) Barnett Way, Gloucester, GL4 3RL (13) 1 More London Place, London, SE1 2AF (14) 1095 Avenue of the America’s, 34th Floor, New York, NY 10036, United States (15) 2nd Floor, 14 Cromac Place, Gasworks, Belfast, BT7 2JB (16) Rineanna House, Shannon Free Zone, Co. Clare, Ireland (17) 60313 Frankfurth AM Main, Thurn-Und, Taxis-Platz 6, Germany (18) Hoogoorddreef, 151101BA, Amsterdam, Netherlands (19) 6 Rue Jean Monnet, L-2180 Luxembourg (20) 33 Old Broad Street, London, EC2N 1HZ (21) Prins Bernhardplein 200, 1097 JB, Amsterdam, Netherlands (22) Citco REIF Services, 20 Rue de Poste, L-2346, Luxembourg (23) RL360 House, Cooil Road, Douglas, Isle of Man, IM2 2SP (24) Centre Orchimont, 36 Rangwee, L-2412, Luxembourg (25) Corporation Service Company, Suite 400, 2711 Centre Road, Wilmington, DE 19805,
United States (26) 4th Floor, 4 Victoria Square, St Albans, AL1 3TF, United Kingdom (27) 1 Allee Scheffer, Luxembourg, L-2520, Luxembourg (28) SAB Formalities, 23 Rue de Roule, Paris, 75001, France (29) Rockspring, 166 Sloane Street, London, SW1X 9QF (30) 15 Dalkeith Road, Edinburgh, EH16 5BU, United Kingdom (31) 138 Market Street, #27-01/02, Capita Green, 048946, Singapore (32) McStay Luby, Dargan House, 21-23 Fenian Street, Dublin 2, Ireland (33) EY Limited of Suite 3C, Regal House, Queensway, Gibraltar (34) P O Box 186, Royal Chambers, St Julian’s Avenue, St. Peter Port, GY1 4EF, Guernsey (35) De Entrée 254, 1101 EE, Amsterdam, Netherlands