The Group’s main business activities are retail and commercial banking, general insurance and long-term savings, provided through the largest branch network and digital bank in the UK, with well recognised brands including Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows.
Statutory profit after tax reduced significantly; largely due to increased impairments given the deterioration in the economic outlook 0.57p Ordinary dividend per share, given the Group’s strong capital position dividends have resumed at the maximum allowed
Over the following pages and throughout this report we highlight what Helping Britain Recover means and how we are supporting people, businesses and communities to emerge stronger than before.
To compete effectively against new competitors we will need to continue to modernise our technology architecture, transform how we work and enhance our use of data across the business. As an efficient, scale operator with strong multi-brand, multichannel capabilities and a fantastic customer franchise we have significant advantages, but sustainable success will only be possible through further embracing technology and enhancing our customer propositions.
The Board and senior management have a vital role to play in shaping and embedding a healthy corporate culture. With this in mind, creating structures which put customers at the heart of decision-making has been a major focus for the Board’s attention over the last few years. During the pandemic, there has been increased focus on ensuring customers are supported appropriately and the Board is determined that this will continue. More information on the Board oversight of our culture journey can be found on page 92.
Loans and advances were broadly in line with prior year at £440.2 billion. Growth in the open mortgage book of £7.2 billion, including £10.2 billion in the second half of the year, and £11.1 billion (£12.4 billion approved at 12 February 2021) of Government-backed lending more than offset lower unsecured Retail balances and other Corporate and Institutional lending, as well as the continued reduction in the closed mortgage book.
In 2020 we increased the number of customers with access to our unique Single Customer View capability by c.1.5 million to c.6.5 million. We also expanded the scope of Single Customer View to include Halifax Share Dealing so that customers with this functionality are now able to view their pensions and investment portfolios alongside their banking products. We have seen cumulative growth in open book assets under administration of £46 billion, or 69 per cent, over the GSR3 period to £113 billion, only narrowly missing the £50 billion growth target despite challenging market conditions.
Developed a clear strategic focus António set out a clear focus on becoming a simple, low risk, customer focused UK bank with significantly reduced risk-weighted assets, lower reliance on short-term funding, strong asset quality and capital levels, and a new executive team.
Built the largest digital bank in the UK while maintaining the largest branch network Simplified, UK-focused business model with presence in 6 countries, down from 30 countries in 2011 Committed to Helping Britain Prosper and deepening our support for communities across the UK
Percentage of senior roles held by Black, Asian and Minority Ethnic colleagues in 2020 7.7 per cent1
Personalising our customer experience We are improving the experience of our customers through the combination of new technological capabilities and our extensive data insights. Using real time customer triggers and predicted needs, based on machine learning, we are now able to deliver enhanced navigation within our digital apps as well as more timely, relevant and co-ordinated communications across email, SMS and within apps that are specifically tailored our customers’ individual needs
In order to meet our overall 2030 and 2050 goals, we will continue to: Identify new ways to support our customers and clients with the management of opportunities and risks associated with climate change, and the transition to a low carbon economy.
Pensions and investments Be a leading UK pension provider that offers our customers and colleagues sustainable investment choices, and challenges the companies we invest in to behave more sustainably and responsibly
Green bonds Be a leading UK bank in the green/ sustainable bonds market
To further accelerate progress, we have engaged with third-party consultants to support the development of our climate risk management framework and high priority sector analysis, thereby extending our modelling and assessment capabilities for quantifying climate risk.
We will achieve net zero carbon operations by 2030. We plan to reduce our direct emissions (known as Scope 1 and 2 emissions) by at least 75 per cent (compared to 2018/9 levels) We will reduce our total energy consumption by 50 per cent by 2030 (compared to 2018/9). Whilst we already procure zero carbon electricity, it remains crucial that we reduce the amount of power we consume to support the UK in meeting an increasing demand for renewable energy We will maintain travel carbon emissions below 50 per cent of pre COVID-19 (2018/9) levels, embedding for the long-term the reduced levels of commuting and business travel seen during the pandemic and supporting colleagues to switch to low carbon transport.
Our 2020 review of our sector statements has tightened our lending appetite for exposure to the coal sector even further. The Group will not: Engage new Commercial Banking customers where any revenue is derived from operating thermal or metallurgical coal mines, Directly finance new or existing UK coalfired power stations by the end of 2022, Support new project finance or direct investment in coal power operations of diversified utility companies elsewhere in the world, unless the finance is used to decommission the coal power generation or convert to renewable power generation, or Provide general purpose banking or lending to any new customers where any revenue is derived from operating coal-fired power stations in the UK.
All data as at 31/12/2020. Group Executive Committee (GEC) assists the Group Chief Exec. in strategic, cross-business or Group wide matters and inputs to Board. GEC and Direct Reports includes the Group Chief Exec., GEC and colleagues who report to a member or attendee of GEC, excluding administrative or executive support roles (personal assistant, executive assistant). Reporting: A colleague is an individual who is paid via the Group's payroll and employed on a permanent or fixed term contract (employed for a limited period). Includes parental leavers, and internationals (UK includes Guernsey, IOM, Jersey and Gibraltar). Excludes leavers, Group Non-Executive Directors, contractors, temps, and agency staff Diversity: Calculation is based on headcount, not FTE (full-time employee value). Data source is HR system (Workday) containing all permanent colleague details. Gender: includes international, those on parental/maternity leave, absent without leave (AWOL) and long-term sick. Excludes contractors, Group Non-Executive Directors, temps and agency staff. All other diversity information is UK Payroll only. All diversity information is based on voluntary self-declaration, apart from gender, so is not 100 per cent representative; our systems do not record diversity data of colleagues who have not declared this information. Ethnic background: comprising of mixed/multiple, Asia, Black, Middle Eastern, North African and other (non-white) ethnicities. Colleague grades: from A through to J, Senior Executive (SE), Executive (EX) and Executive Director (ED) A being the lowest. Senior Managers: Grades F, G, H, J, SE, EX and ED (F being the lowest). NR: Data not reported during period. * 2020 Indicator is subject to Limited ISAE 3000 (revised) assurance by Deloitte LLP for the 2020 Annual Responsible Business
Since 2018, we have now helped over 265,000 businesses start up and re-affirmed our commitment to the UK’s manufacturing sector providing £3.7 billion of dedicated investment, whilst continuing to build on our financial commitments with our broader support for a range of issues that impact business skills and productivity every day.
The Group delivered a new dedicated phone line which provides guidance and remote training to customers less able to see us in branch, to help them stay connected with everyday digital activities, including online banking. Customers were contacted and able to access free and practical support to help them stay connected online. With guidance from We Are Digital’s agents, users learn skills to help with everyday tasks such as online shopping, booking a doctor’s appointment using the NHS website, connecting virtually with family and friends, as well as internet banking. The service provides not just remote help via a telephone, but has also allowed for customers and charities in need to be able to be provided with a basic tablet device. We provided over 1,000 devices and data, and helped 12,500 callers to the helpline.
Highlights 482 concerns were raised through our Speak Up line of which 178 were formally investigated with 41 per cent of those investigations substantiated. We became members of the United for Wildlife Financial Taskforce. We co-sponsored the National Economic Crime Centre (NECC) initiative to tackle criminals seeking to exploit COVID-19. Supplier expenditure was £5.1 billion with over 95 per cent of our third-party supplier spend incorporated in the UK. £4 billion of taxes paid over to the UK Government.
Human rights and modern slavery The Group believes in the importance of doing business in ways that value and respect the human rights of our colleagues, customers, business partners and communities affected by our business. We are guided by the International Bill of Human Rights as well as the International Labour Organisation’s (ILO) Core Labour Standards and its Tripartite Declaration of Principles.
We evolved our method of customer communication by contacting our customers via SMS to reduce the time they would need to wait for an update, and to minimise our colleagues’ need to visit an office. We will review on an ongoing basis how we can continue to help our customers.
There are core Group wide policies within the Group’s risk management framework relating to fraud, anti-money laundering, counter terrorist financing, sanctions and prohibitions, and anti-bribery. A combined fraud and financial crime mandatory training course reflecting key policy requirements is undertaken by all colleagues annually.
Any supplier related grievances or concerns can be raised using our confidential SpeakUp whistleblowing service. Further information related to key Board decisions on supplier management are located on page 51.
Uncertainty for the longer-term outlook for interest rates has also increased. If high indebtedness drags on growth it may keep interest rates very low for a long time. However, it could also spur a change in policymakers’ frameworks for managing economies, towards higher inflation targets and higher nominal interest rates, although this is unlikely for the UK over the coming year at least in our view. An early return to austerity or significant fiscal tightening represents a risk to the outlook.
Looking specifically at our non-physical channels, we remain committed to investing in our digital offering. We continue to respond to functionality developments from neo-bank and big-tech peers that our customers expect to be replicated, and have a strong pipeline of developments for 2021, with faster time-to-market thanks to ongoing investment in technology. Our market leading, simple, low risk business model, and integrated financial services offering position us strongly to compete with a variety of other players in the market. It is therefore crucial that we further strengthen our competitive advantages and develop new ones by diversifying our business, expand our value-adding offering to our customers and capture new growth opportunities.
Through this approach, which is focused on near term execution and underpinned by our longer term strategic vision, we are aiming to capture the co-ordinated growth opportunities available to us in our two core business areas by creating the UK's preferred financial partner for personal customers and the best bank for business.
In 2021, we will: Provide £10 billion of lending to help people to buy their first home in 2021, and lead a national conversation on how more households can access the housing market Provide £1.5 billion of new funding support, including £500 million in ESGlinked funding, in support of the social housing sector Support the creation of national sustainability standards for house-building finance and assess the energy retrofit requirements of over 200,000 homes in the social housing sector
SMEs continue to value human interaction for their more complex needs. Through our strong network of relationship managers and leading branch network for smaller business clients we have a significant competitive advantage in responding to these needs, and will continue to upskill our colleagues to provide an enhanced service, while also delivering a more seamless experience across channels.
Through the further development of our capabilities in this area we are targeting a significant increase in personal customers' needs we can meet using advanced analytics, including for example, a 20 per cent increase in Home Insurance needs met.
In 2021, we will increase the use of machine learning to drive faster and more accurate pricing and risk decisions, while also expanding its usage to cover at least 50 per cent of customer transactions. We expect this approach to achieve at least a 10 per cent increase in fraud detection rates and therefore play an important role in our ongoing efforts to protect our customers and the Group from this growing threat.
Technology transformation The Board has taken steps to make sure the Group continues to build on its response to customer demand for technology. Digital transformation has therefore remained a key focus, including supporting the development of the Group’s Cloud strategy, and the ongoing roll-out of technological developments for customers, discussed further on page 51.
The Executive, including the Group Chief Executive and Chief Financial Officer, provide the Board with details of material stakeholder interaction and feedback, through regular business updates. Stakeholder interests are also identified by the Executive in the wider proposals put to the Board.
During the year the Board gained further understanding of colleague views through a number of surveys completed by colleagues across the Group. These included the annual colleague survey, ad hoc ‘Pulse’ surveys, and participation by colleagues in the survey of the Banking Standards Board.
Regular and open engagement with colleagues was crucial, with the Group Chief Executive undertaking a series of related video broadcasts, keeping colleagues informed of developments.
Supplier experience Recognising the role of suppliers in the Group’s day-to-day operations, and its future ambitions, the Board was keen that supplier experience be continually reviewed in order that it may be improved wherever it was possible to do so.
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UK’s leading digital bank with digitally active customers up 6 per cent to 17.4 million and mobile users up 16 per cent to 12.5 million. Over 4 billion internet banking logins in 2020, with average monthly logins up 12 per cent
Supported customers through the pandemic with c.1.3 million payment holidays, c.880,000 calls answered on dedicated lines for NHS workers and over 70s, along with over 750,000 wellbeing calls made by branch colleagues
As part of Lloyds Bank’s Clean Growth Financing Initiative (CGFI), the Group provided £198 million to the project in a total debt package of £1.4 billion.
Transforming ways of working Upgraded the Business Banking Online Lending Tool to accommodate the Government’s coronavirus lending schemes, enabling faster decision making and freeing up Relationship Manager time to help clients
Commenced £2 billion investment in BlackRock's Climate Transition fund expected to deliver c.50 per cent carbon reduction compared to benchmark; helping customers save for retirement, whilst investing in sustainable businesses
Our mission is to protect our customers, colleagues, the Group, investors and society, while enabling sustainable growth. This is achieved through informed risk decisionmaking and robust risk management, supported by a consistent risk-focused culture.
The risk management section from pages 143 to 204 provides an in-depth picture of how risk is managed within the Group, including the approach to stress testing, risk governance, Committee structure, risk appetite and detailed analysis of the principal risk categories, the framework by which risks are identified, managed, mitigated and monitored.
Principal risks 1 Includes a 0.5 per cent benefit following the implementation of the revised capital treatment of intangible software assets which the PRA is proposing to reverse.
In addition to the principal risks, the Group takes a proactive approach to horizon scanning and assessing the potential impact of an existing or future trend which could have a material impact on the Group, where the probability, timescale and/or materiality may be difficult to accurately assess.
The Group’s strategy aims to support a more sustainable future, while diversifying our income streams. The Group is working hard to ensure that our purpose, commitment to Helping Britain Prosper and delivery are harmonious with the expectations of our colleagues, customers and other key stakeholders, all the while adapting to changing societal expectations and customer and colleague preferences.
– Greater costs and operational risks due to duplication or complexity of infrastructure and processes and the need to retain legacy skills
Significant transformation achieved under the third phase of the Group’s strategy (GSR3) In 2018 we launched our ambitious strategy to transform the Group for success in a digital world and over the last three years we have invested £2.8 billion across our four strategic pillars, enabling us to: Develop a leading customer experience; including the largest digital bank in the UK with 17.4 million digitally active customers and 12.5 million mobile app users with record NPS, alongside the largest UK branch network
Impairment The impairment charge for the year was £4,247 million, an increase of £2,956 million compared to 2019. This was primarily driven by the charge in the first half reflecting potential future losses in light of the Group’s revised economic outlook for the UK as a consequence of the coronavirus pandemic. The charge of £128 million taken in the fourth quarter was below typical pre-crisis levels and reflected the relative economic stability in the quarter.
Charges of £403 million were taken in the year on restructuring cases whose recovery strategies were affected more immediately by the coronavirus pandemic. Aside from these cases, observed credit performance has remained stable, in part as a result of the continued effectiveness of Government support schemes and payment holidays extended by the Group. Additional funding has been made available by those schemes to businesses impacted by lockdown restrictions which has prevented a more material increase in business failures and unemployment.
2 Additional charges made during 2020 on cases subject to restructuring at the end of 2019, where the coronavirus pandemic is considered to have had a direct effect upon the recovery strategy.
Matured payment holidays – missed payment 5% 5% 11% 11% 7% 7% 7% 8% 7% 5%
Following the announcement of the latest national coronavirus-related lockdown, since 1 January 2021, the Group has granted c.28,000 new payment holidays on £0.8 billion of Retail balances.
Tax The Group recognised a tax credit of £161 million in the period, which was impacted by an uplift in the value of deferred tax assets of c.£350 million recognised in the first half of 2020. This credit reflected the UK corporation tax rate being held at 19 per cent, as substantively enacted on 17 March 2020. The Group continues to expect a medium-term effective tax rate around 25 per cent.
Of which money-market funding <1 year maturity 3 £22bn £25bn (14)
3 Excludes balances relating to margins of £5.3 billion (31 December 2019: £4.2 billion).
Given the Group’s strong capital position at the year end and the regulator’s clarification that banks may resume capital distributions, the Board has recommended a final ordinary dividend of 0.57 pence per share, the maximum allowed under the PRA’s guidelines.
Return on tangible equity – new basis 5.9% 6.0% (6.1%) 3.7% 9.8% (4.0%) 9.3% 11.4%
Adjusted statutory profit after tax (£m) – new basis 865 2,459
Skills, experience, and contribution: Extensive experience in responsible business Considerable customer engagement experience Strong digital technology experience Significant marketing and brand background Amanda was a member of Aviva's Group Executive for 7 years as Chief Marketing and Communications Officer and was seconded to help launch the United Nation’s Sustainable Development Goals. She is also a former Director of British Airways AirMiles, BT, Hewlett Packard Inc and British Gas.
External appointments: Chief Executive of Business in the Community, The Prince's Responsible Business Network.
Carla Antunes da Silva Group Strategy, Corporate Development and Investor Relations Director
Antonio Lorenzo Chief Executive, Scottish Widows and Group Director, Insurance and Wealth
Responsible Business Committee following Sara's retirement from the Board. 9 Catherine Woods joined the Board and the Board Risk and Remuneration Committees on 1 March 2020 and the Audit Committee on 10 September 2020. 10 Unable to attend due to illness. 11 Unable to attend ad hoc meeting scheduled on a Sunday evening at short notice.
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The management of all Committees is on the same basis as the Board. Each of the Committees’ structures facilitates open discussion and debate, and ensures adequate time for members of the Committees to consider all proposals.
Discussed progress against Group Strategic Review 3 objectives Strategic priorities Stakeholder groups
Approved the attestation of ring-fencing compliance application to PRA to renew modifications to ring-fencing governance rules Stakeholder groups
8 April – the Board held an informal update call to discuss the Group’s response to the crisis, including business continuity planning and operational impact and to provide a briefing on customer support and business support schemes as well as on economic and financial projections.
23 September – the Board Risk Committee discussed an update on the impact of the pandemic, in particular from customers in financial difficulty and risk appetite perspectives.
The main focus in improvements to Board effectiveness in 2020 have been in the technology area, including improving Non-Executive Director access to Group IT systems with more powerful and modern devices and tools, balancing convenience and ease of access with the need to ensure compliance with Group security policies and procedures. Enhancements to Board and Committee meeting technology, tools and procedures were accelerated as a result of the pandemic, with considerable success and without impact on the twin focus on streamlining meeting agendas, papers and presentations to allow deeper strategic discussion by the Board. Details of specific actions taken and enhancements made during 2020 are set out below: Theme Feedback from the 2019 evaluation Actions taken in 2020
Further streamline meeting agendas, papers and presentations to enable more expansive discussion.
Internal control Board responsibility The Board is responsible for the Group’s risk management and internal control systems, which are designed to facilitate effective and efficient operations and to ensure the quality and integrity of internal and external reporting and compliance with applicable laws and regulations, and for the determination of the nature and extent of the principal risks the Group is willing to take in order to achieve its strategy. The Directors and senior management are committed to maintaining a robust control framework as the foundation for the delivery of effective risk management. The Directors acknowledge their responsibilities in relation to the Group’s risk management and internal control systems and for reviewing their effectiveness.
J. The process for Board appointments is led by the Nomination and Governance Committee, which makes recommendations to the Board. Open advertising and/or an external search consultancy is used for the appointment of the Chair and Non-Executive Directors. More details about the appointment process for the Chair and Group Chief Executive and succession planning can be found on pages 98, 99 and 100. More information about the work of the Nomination and Governance Committee can be found on pages 98 to 100.
Committee purpose and responsibilities The purpose of the Committee is to monitor and review the Group’s financial and narrative reporting arrangements, the effectiveness of the internal controls (including over financial reporting) and the risk management framework, whistleblowing arrangements and each of the internal and external audit processes, including the statutory audit of the consolidated financial statements and the independence of the statutory external auditor.
Q. What have been the other significant challenges the Committee has faced this year? The Committee has spent a significant amount of time considering the key judgements in respect of financial reporting matters, including economic assumptions. Our oversight of the control environment and the Group’s internal and external auditors has had the added challenge of remote working, where the response has been both agile and adaptive. The Committee has continued to oversee the transition from our existing external auditor to our new external auditors, Deloitte, with focus on the 2021 audit plan in support of a smooth transition.
Speak Up (the Group’s whistleblowing service) The Committee received and considered reports from management on the Group’s whistleblowing arrangements.
The Committee reviewed the reports to ensure there are arrangements in place which colleagues can use in confidence to report concerns about inappropriate and unacceptable practices, and that there is proportionate and independent investigation of such matters or appropriate follow up.
Q. How has the Board Risk Committee (the ‘Committee’) responded to the additional challenges faced during 2020 arising from the pandemic? A. As identified in the following pages, the Committee has considered the impacts of the pandemic on the existing risk profile, and reviewed actions taken by management to mitigate. The most significant areas have included the financial impacts for our customers, the wellbeing and resilience of our colleagues, and ensuring their ability to continue to safely help and support our customers.
Q. What are the key areas of focus for the Committee in 2021? A. The Committee will continue to consider the following important areas: Broader impacts of the pandemic on the Group’s risk profile.
Conclusion: Root cause analysis and read-across activity continues to improve and embed across the Group. This will remain a key focus for the Committee in 2021, along with rectifications impacted by the pandemic.
The Directors have specifically assessed the prospects of the Company and the Group over the current plan period. The Board considers that a three year period continues to present a reasonable degree of confidence over expected events and macroeconomic assumptions, while still providing an appropriate longer-term outlook. Information relevant to the assessment can be found in the following sections of the annual report and accounts: The Group’s principal activities, business and operating models and strategic direction are described in the strategic report on pages 1 to 59
Scope 1, 2 and 3 emissions Greenhouse gas emissions The Group has reported greenhouse gas emissions and environmental performance since 2009, and since 2013 this has been reported in line with the requirements of the Companies Act 2006 and its applicable regulations. Our total emissions, in tonnes of CO2 equivalent, are reported in the table below. Deloitte LLP has provided limited level ISAE 3000 (Revised) assurance over selected non-financial indicators as noted by . Their full, independent assurance statement is available online at www.lloydsbankinggroup.com/who-we-are/responsible-business/ downloads.html
Independent auditor and audit information Each person who is a Director at the date of approval of this report confirms that, so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware and each Director has taken all the steps that he or she ought to have taken as a Director to make himself or herself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.
Statement of directors’ responsibilities The Directors are responsible for preparing the annual report, including the Directors’ remuneration report, and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the Group and parent Company financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. Additionally, the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules require the Directors to prepare the group financial statements in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
The Directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company and the Group’s position, performance, business model and strategy. The Directors have also separately reviewed and approved the strategic report.
The Remuneration Committee carefully considered the impact of a lower share price on award sizes in assessing the ‘pre-grant test’ as outlined and explained in more detail on page 118. The decision has been taken that adjusting awards upfront for a potential increase in the share price over time would not be appropriate, but instead took the decision that the level of LTSP awards should be reduced by 40 per cent to reflect the Group’s performance in 2020, the current share price and the wider experience of shareholders.
Together with my Committee members, I look forward to hearing your views on the remuneration arrangements outlined in the report and hope we will receive your support at the upcoming AGM.
Fixed Share Award To ensure that total fixed remuneration is commensurate with role and to provide a competitive reward package for Executive Directors with an appropriate balance of fixed and variable remuneration, in line with regulatory requirements.
The following table provides an indication of scorecard performance outcomes and resulting LTSP awards. The Remuneration Committee will use this as a guide although will make any discretionary adjustment to the final grant size based on factors that are considered important outside of the scorecard.
Defined benefits pension arrangements (audited) António Horta-Osório has a conditional unfunded pension commitment. This was a partial buy-out of a pension forfeited on joining from Santander Group. It is an Employer-Financed Retirement Benefits Scheme (EFRBS). The EFRBS provides benefits on a defined benefit basis at a normal retirement age of 65. The benefit in the EFRBS accrued during the six years following commencement of employment, therefore ceasing to accrue as of 31 December 2016.
There are no Group performance share awards payable in respect of 2020 performance
97.5% Green and 1.3% Red 5 Change Execution Risk metric performance has remained stable and strong throughout 2020 with over 97.5% metrics reported as ‘Green’ compared to target of 87.5%.
Strong balance sheet management with CET1 ratio of 16.2% significantly ahead of regulatory requirements
Payments within the reporting year to past Directors (audited) There were no payments made to past directors in 2020.
Single total figure of remuneration for Chairman and Non-Executive Directors (audited) Fees (£000) Benefits (£000)3 Total (£000)
Robin Budenberg CBE4 500,410 – – – – 500,410 n/a7 n/a
6 Anita Frew retired 21 May 2020 and Simon Henry retired 30 September 2020. Shares held at date of resignation. 7 The changes in beneficial interests for António Horta-Osório (1,047) shares) relate to ’partnership’ and ’matching’ shares acquired under the Lloyds Banking Group Share Incentive Plan between 31 December 2020 and 23 February 2021. There have been no other changes up to 23 February 2021. Non-Executive Directors are not eligible to participate in these schemes, therefore, changes non-applicable.
Long Term Share Plan It is an important feature of the LTSP that performance is assessed and appropriately recognised upfront in the award size as there are no performance conditions that apply after the award is granted (only underpins – see below). This is not however a mechanical outturn, as with GPS, and the Remuneration Committee may exercise its judgement.
Pay for comparable roles in comparable publicly listed financial services groups of a similar size.
Maximum Potential The Committee will make no increase which it believes is inconsistent with the two parameters above. Increases will normally be in line with the increase awarded to the overall employee population. However, a greater salary increase may be appropriate in certain circumstances, such as a new appointment made on a salary below a market competitive level, where phased increases are planned, or where there has been an increase in the responsibilities of an individual. Where increases are awarded in excess of the wider employee population, the Committee will provide an explanation in the relevant annual report on remuneration.
Performance measures Measures and targets are set annually by the Committee in line with the Group’s strategic business plan and further details are set out in the annual report on remuneration for the relevant year. Measures consist of both financial and non-financial measures and the weighting of these measures will be determined annually by the Committee.
The risk overview (pages 56 to 59) provides a summary of risk management within the Group and the key focus areas for 2020, including the significant impact that COVID-19 has had on all principal risks faced by the Group. The risk overview also highlights the importance of the connectivity of principal, emerging and strategic risks and how they are embedded in to the Group's strategic risk management framework.
Risk appetite Risk appetite is defined within the Group as ‘the amount and type of risk that the Group is prepared to seek, accept or tolerate’ in delivering its strategy.
The primary role of Group Internal Audit (third line) is to help the Board and executive management protect the assets, reputation and sustainability of the Group. Group Internal Audit is led by the Group Chief Internal Auditor. Group Internal Audit provides independent assurance to the Audit Committee and the Board through performing reviews and engaging with committees and executive management, providing opinion, challenge and informal advice on risk and the state of the control environment. Group Internal Audit is a single independent internal audit function, reporting to the Audit Committee of the Group and the Audit Committees of the key subsidiaries.
The Chief Risk Officer regularly informs the Board Risk Committee of the aggregate risk profile and has direct access to the Chair and members of Board Risk Committee.
– Incorporating operational resilience into future design thinking and facilitation of office and remote experiments are designed to support increased collaboration and support new ways of working
– Structured approach to embed a cloud control framework to support the Group’s public cloud ambitions
Supporting the Group People & Property Director in exercising their responsibilities in relation to the Group’s people and colleague policies, overseeing the development of and monitoring adherence to the remuneration policy, oversees compliance with Senior Manager and Certification Regime (SM&CR) and other regulatory requirements, monitors colleague engagement surveys, progress of the Group towards its culture targets and oversees the implementation of action plans.
Other stress testing activity The Group’s stress testing programme also involves undertaking assessments of liquidity scenarios, market risk sensitivities and scenarios, and business specific scenarios (see the principal risk categories on pages 153 to 204 for further information on risk-specific stress testing). If required, ad hoc stress testing exercises are also undertaken to assess emerging risks, as well as in response to regulatory requests. This wide ranging programme provides a comprehensive view of the potential impacts arising from the risks to which the Group is exposed and reflects the nature, scale and complexity of the Group. The Group will undertake the Bank of England’s Climate Biennial Exploratory Stress test in 2021 and will leverage the experience gained through that exercise to further embed climate risk into stress testing activities.
The Group Financial Risk Committee (GFRC), chaired by the Chief Risk Officer and attended by the Chief Financial Officer and other senior Risk and Finance colleagues, is the committee that has primary responsibility for overseeing the development and execution of the Group’s and Ring-Fenced Bank’s stress tests. Lloyds Bank Corporate Markets (LBCM) Risk Committee performs a similar function within the scope of LBCM.
Climate risk manifests through, and has potential to impact, the Group’s existing principal financial and non-financial risks. Climate risk is included as both a principal and emerging risk this year given it is such a new and fast moving area. The Group has undertaken an analysis of how the its principal risks are impacted by climate change. For further information see page 26 in the 2020 Lloyds Banking Group ESG Report.
Cash and balances at central banks 73,257 — 73,257 — Interest rate
Structural hedge: the structural hedging programme managing interest rate risk in the banking book relies on assumptions made around customer behaviour. A number of metrics are in place to monitor the risks within the portfolio.
Insurance portfolios Exposures The main elements of market risk to which the Group is exposed through the Insurance business are equity, credit default spread, interest rate and inflation.
The table below demonstrates the impact of the Group’s UK Recession scenario on the Insurance business’ portfolio (with no diversification benefit). The amounts include movements in assets, liabilities and the value of inforce business in respect of insurance contracts and participating investment contracts.
Stage 3 loans and advances increased by £335 million to £9,089 million (31 December 2019: £8,754 million), although as a percentage of total lending remained stable at 1.8 per cent. Stage 3 coverage increased by 5.6 percentage points to 28.1 per cent (31 December 2019: 22.5 per cent) largely driven by additional provisions predominantly raised against preexisting restructuring cases in Commercial Banking’s BSU and to a lesser extent in Retail, due to the change in the Group’s economic forecast of collateral values for UK Mortgages and UK Motor Finance
Total ECL allowances (drawn and undrawn) as a percentage of loans and advances to customers 0.4 4.5 28.1 1.4 1 Retail balances exclude the impact of the HBOS and MBNA acquisition related adjustments.
ECL sensitivity to economic assumptions The measurement of ECL reflects an unbiased probability-weighted range of possible future economic outcomes. The Group achieves this by generating four economic scenarios to reflect the range of outcomes; the central scenario reflects the Group’s base case assumptions used for medium-term planning purposes, an upside and a downside scenario are also selected together with a severe downside scenario. The base case, upside and downside scenarios carry a 30 per cent weighting; the severe downside is weighted at 10 per cent.
The impairment charge was £141 million for 2020 compared to £54 million for 2019, primarily due to the weaker outlook within our economic forecasts
Stage 3 loans and advances remained broadly flat at £3,524 million (31 December 2019: £3,447 million) although given the overall Commercial portfolio reduction, as a proportion of total loans and advances to customers, increased to 4.0 per cent (31 December 2019: 3.6 per cent). SME flows to Stage 3 remain suppressed and non-SME flows were offset by repayments and write-offs. Stage 3 ECL coverage increased to 36.7 per cent (31 December 2019: 27.4 per cent) predominantly driven by the additional provisions raised against the existing restructuring cases in the BSU
Stage 2 loans and advances have increased by £8,339 million to £14,316 million at 31 December 2020, largely driven by the IFRS 9 forward look PD staging trigger, rather than actual PD deterioration, with 98 per cent of Stage 2 balances being current and up to date. As a result, Stage 2 loans as a proportion of total loans and advances to customers increased to 16.2 per cent (31 December 2019: 6.2 per cent). Stage 2 ECL coverage was higher at 5.2 per cent (31 December 2019: 4.2 per cent) with the increase in coverage a direct result of the forward look multiple economic scenarios
Recognising this is a cyclical sector, appropriate caps are in place to control origination and exposure. Focus remains on the UK market and business propositions have been written in line with a prudent, through the cycle risk appetite with conservative LTVs, strong quality of income and proven management teams
The Group provides colleague training on environmental risk management as part of the standard suite of Commercial Banking credit risk courses. To support this training, a range of online resources are available to colleagues, including environmental risk theory, procedural guidance, and information on environmental legislation and sector-specific environmental impacts.
Financial assets at amortised cost: Loans and advances to banks — 1 1 — 2,087 4,483 4,175 10,745 10,746
Trading and other financial assets at fair value through profit or loss 51 4,834 4,885 — 2,469 — 152,835 155,304 160,189
4 Other comprises: items in the course of collection from banks; investment properties; goodwill; value in-force business; other intangible assets; tangible fixed assets; current tax recoverable; deferred tax assets; retirement benefit assets; investments in joint ventures and associates; assets arising from contracts held with reinsurers and other assets.
In addition to the risk-based capital framework outlined above, the Group is also subject to minimum capital requirements under the UK Leverage Ratio
Mitigation The Group has a capital management framework that includes the setting of capital risk appetite and capital planning and stress testing activities. Close monitoring of capital and leverage ratios is undertaken to ensure the Group meets regulatory requirements and risk appetite levels and deploys its capital resources efficiently.
In December 2020, the PRA announced that dividend payments could recommence, provided that this was subject to a prudent framework for the setting of such distributions. The framework established by the PRA in respect of any distributions for 2020 requires banks to take into account the ongoing economic uncertainties and the need for banks to continue to support the re-build of the UK economy through lending, particularly in the event of a more severe and prolonged downturn. As a result the PRA established a cap on distributions for year end 2020, based on the higher of i) 20 basis points of total risk-weighted assets at 31 December 2020, or ii) 25 per cent of cumulative profits for 2019 and 2020 after deducting prior shareholder distributions covering the two year period.
Movements in capital resources The key difference between the transitional capital calculation as at 31 December 2020 and the fully loaded equivalent is primarily related to capital securities that previously qualified as tier 1 or tier 2 capital, but that do not fully qualify under the regulation, and which can be included in additional tier 1 (AT1) or tier 2 capital (as applicable) up to specified limits which reduce by 10 per cent per annum until 2022. In addition, following revisions to eligibility criteria for capital instruments under CRR II, certain tier 1 capital instruments of the Group that will transition to tier 2 capital by 2022 will cease to qualify as regulatory capital in June 2025. The key movements on a transitional basis are set out in the table below.
Tier 2 capital resources have reduced by £922 million over the year, largely reflecting instrument calls, regulatory amortisation and other movements, partially offset by the net outcome of subordinated liability exchange exercises undertaken during the year.
Mitigation The Group takes a range of mitigating actions with respect to change/ execution risk. These include the following: The Board establishes a Group-wide risk appetite and metric for change/ execution risk
In addition to its efforts internally the Group also contributes to fraud and financial crime prevention by supporting and championing industry level activity, including: – Being a signatory to the industry code for Authorised Push Payment (APP) fraud, which has greatly increased consumer protection and the reimbursement of funds to victims
Measurement The Group assesses and monitors strategic risk implications as part of business planning and in its day to day activities, ensuring they respond appropriately to internal and external factors including changes to regulatory, macroeconomic and competitive environments. An assessment is made of the key strategic risks that are considered to impact the Group, leveraging internal and external information and the key mitigants or actions that could be taken in response.
We have audited the financial statements, included within the Annual Report and Accounts (the “Annual Report”), which comprise: consolidated and parent company balance sheets as at 31 December 2020; the consolidated income statement and the consolidated statement of comprehensive income for the year then ended; the consolidated and parent company cash flow statements for the year then ended; the consolidated and parent company statements of changes in equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.
The allowance for ECL relating to loans and advances in the Retail division is determined on a collective basis, with the use of impairment models. These models use a number of key assumptions including probability of default, loss given default (including propensity for possession and forced sale discounts for mortgages) and valuation of recoveries. Management also apply judgemental adjustments where they believe the model calculated assumptions and allowances are not appropriate, either due to emerging trends or model limitations. An example of this are adjustments to the impairment model for anticipated increases in account defaults across the portfolio. There has been an increase in adjustments to the modelled ECL in the current year which reflects the fact that the historical data used in the development of the models does not capture conditions of the COVID-19 pandemic experienced during 2020. Our work therefore focused on the appropriateness of modelling methodologies adopted and significant judgements made in determining adjustments to the modelled ECL as well as the measurement of those adjustments.
In particular, persistency (the retention of policies over time), longevity (the expectation of how long an annuity policyholder will live and how that might change over time), maintenance expenses (future expenses incurred to maintain insurance contracts to maturity), credit default and illiquidity premium (which are adjustments made to the discount rate used in the valuation of the insurance contract liabilities and value of in-force asset). The ongoing COVID-19 pandemic has introduced additional uncertainty to each of the assumptions outlined above
Based on the evidence obtained, we found the pricing used by management for the valuation of harder to value assets in PIVs to be materially appropriate.
As part of our review, we identified a number of entitlements that had not been recertified timely during the period. Consequently we performed an assessment of each of the areas within our audit approach where we place reliance on automated functionality and data within IT systems. In each case we identified a combination of mitigating IT controls, performed targeted audit procedures and assessed other mitigating factors (including business mitigating controls) in order to respond to the impact on our overall audit approach.
– Evaluation of stress testing performed by management and consideration of whether the stresses applied are appropriate for assessing going concern; – Evaluation of the Groups forecast financial performance, liquidity and capital positions over the going concern period including an evaluation of the impact of COVID-19 on the financial outlook of the Group; – Review of credit rating agency ratings and actions; and – Substantiation of certain financial resources available to the Group, for example at the Bank of England.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s and the parent company’s ability to continue as a going concern.
Consolidated statement of comprehensive income for the year ended 31 December £ million £ million £ million
Movements in cash flow hedging reserve: Effective portion of changes in fair value taken to other comprehensive income 730 1,209 234
Liabilities arising from insurance contracts and participating investment contracts 30 116,060 111,449
O ther inform ation Financial statem ents Lloyds Banking Group Annual Report and Accounts 2020 221
In 2019 the Group adopted IFRS 16 and amendments to IAS 12 and early-adopted the hedge accounting amendments Interest Rate Benchmark Reform issued by the IASB.
Revenue recognition policies specific to trading income are set out in (E)(3) below, life insurance and general insurance business are detailed below (see (M) below); those relating to leases are set out in (J)(1) below.
Deposits and withdrawals are not accounted for through the income statement but are accounted for directly in the balance sheet as adjustments to the nonparticipating investment contract liability.
Key estimates: Base case and Multiple Economic Scenarios (MES) assumptions, including the rate of unemployment and the rate of change of house prices, required for creation of MES scenarios and forward-looking credit parameters
The Group recognises an allowance for expected credit losses for loans and advances to customers and banks, other financial assets held at amortised cost, financial assets measured at fair value through other comprehensive income and certain loan commitment and financial guarantee contracts. At 31 December 2020 the Group’s expected credit loss allowance was £6,247 million (2019: £3,455 million), of which £5,788 million (2019: £3,278 million) was in respect of drawn balances.
to Loans and overdrafts. The impact of this has been approximately £1.4 billion of additional assets being classified as Stage 2 at 31 December 2020, with a corresponding increase in the ECL of £48 million resulting from the transfer to a lifetime expected loss.
Economic assumptions - five year average The key UK economic assumptions made by the Group averaged over a five-year period are shown below. The five-year period reflects movements within the current reporting year such that 31 December 2020 reflects five years 2020 to 2024. The prior year comparative data has been re-presented to align to the equivalent period, 2019 to 2023. The inclusion of the reporting year within the five-year period reflects the need to predict variables which remain unpublished at the reporting date, and recognises that credit models utilise both level and annual change in calculating ECL. The use of calendar years also maintains a comparability between tables disclosed.
Assessing whether certain of the Group’s purchased brands have an indefinite life Key estimates: The value-in-use calculations require management to estimate future cash flows, appropriate discount rates for those cash flows and long-term sustainable growth rates
Retail offers a broad range of financial service products, including current accounts, savings, mortgages, motor finance and unsecured consumer lending to personal and small business customers.
Segment underlying income, net of insurance claims 10,117 3,649 1,299 223 15,288
Non-income statement segment items: Investments in joint ventures and associates at end of year 4 — — 300 304 1 Restated, see page 240. 2 Net of profits on disposal of operating lease assets of £41 million.
At 31 December 2020, the Group held on its balance sheet £243 million (31 December 2019: £293 million) in respect of services provided to customers and £99 million (31 December 2019: £140 million) in respect of amounts received from customers for services to be provided after the balance sheet date. Current unsatisfied performance obligations amount to £191 million (31 December 2019: £270 million); the Group expects to receive substantially all of this revenue by 2023.
Other non-audit fees: This category includes other assurance services not related to the performance of the audit or review of the financial statements, for example, the review of controls operated by the Group on behalf of a third party. The auditors are not engaged to provide tax services.
Financial assets at fair value through other comprehensive income 5 — — — 5
– Derivatives held in policyholder funds as permitted by the investment strategies of those funds.
Other items charged to the income statement (25) 8 (4) — (21)
The Group's total impairment allowances were as follows: Allowance for expected credit losses
Share of other comprehensive income — — — — — —
The Group's unrecognised share of losses of associates for the year was £nil (2019: £nil; 2018; £4 million). For entities making losses, subsequent profits earned are not recognised until previously unrecognised losses are extinguished. The Group's unrecognised share of losses net of unrecognised profits on a cumulative basis of associates is £2 million (2019: £17 million; 2018 £17 million) and of joint ventures is £5 million (2019: £3 million; 2018: £3 million).
Charge for the year (note 11) — — 70 — 590 660
Note 30: Liabilities arising from insurance contracts and participating investment contracts Insurance contract and participating investment contract liabilities are comprised as follows: Gross Reinsurance1 Net Gross Reinsurance1 Net £m £m £m £m £m £m
Change in provision for unearned premiums charged to income statement (3) (9)
Note 30: Liabilities arising from insurance contracts and participating investment contracts continued
Money market instruments, cash, derivatives and other assets and liabilities 812 (9,276) (8,464) 204 (8,211) (8,007)
For the principal post-retirement healthcare scheme, the latest actuarial valuation of the liability was carried out at 31 December 2020 by qualified independent actuaries. The principal assumptions used were as set out above, except that the rate of increase in healthcare premiums has been assumed at 6.40 per cent (2019: 6.54 per cent).
No deferred tax has been recognised in respect of foreign trade losses where it is not more likely than not that we will be able to utilise them in future periods. Of the asset not recognised, £41 million (2019: £35 million) relates to losses that will expire if not used within 20 years, and £48 million (2019: £45 million) relates to losses with no expiry date.
(3) Share capital and control There are no restrictions on the transfer of shares in the Company other than as set out in the articles of association and: – certain restrictions which may from time to time be imposed by law and regulations (for example, insider trading laws); – where directors and certain employees of the Company require the approval of the Company to deal in the Company’s shares; and
Change in fair value of hedging derivatives 730 1,209 234 £m £m £m
The trustees of the following holdings of Lloyds Banking Group plc shares in relation to employee share schemes retain the right to receive dividends but have chosen to waive their entitlement to the dividends on those shares as indicated: the Lloyds Banking Group Share Incentive Plan (holding at 31 December 2020: 3,990,862 shares, 31 December 2019: 6,508,529 shares, waived rights to all dividends), the HBOS Share Incentive Plan Trust (holding at 31 December 2020: nil, 31 December 2019: 445,625 shares, waived rights to all dividends), the Lloyds Banking Group Employee Share Ownership Trust (holding at 31 December 2020: 20,540,083 shares, 31 December 2019: 11,656,155 shares, waived rights to all dividends).
Executive and SAYE plans: Options granted in the year 13 16 14
Withdrawn (includes deposits of former key management personnel) (38) (41) (33)
Furthermore, the Swiss Competition Commission concluded its investigation against Lloyds Bank plc in June 2019. However, the Group continues to respond to litigation arising out of the investigations into submissions made by panel members to the bodies that set LIBOR and various other interbank offered rates.
Other commitments and guarantees 89,269 85,735 1 year or over original maturity 38,299 34,945
O ther inform ation Financial statem ents Lloyds Banking Group Annual Report and Accounts 2020 297
Assets arising from contracts held with reinsurers — 22,817 — 22,817
Total financial assets carried at fair value, excluding derivatives 125,884 66,898 15,316 208,098
– Less complex interest rate and foreign exchange option products which are valued using volatility surfaces developed from publicly available interest rate cap, interest rate swaption and other option volatilities; option volatility skew information is derived from a market standard consensus pricing service. For more complex option products, the Group calibrates its models using observable at-the-money data; where necessary, the Group adjusts for out-of-the- money positions using a market standard consensus pricing service.
Loans and advances to customers: Stage 2 49,514 50,198 — — 50,198
Repurchase agreements The carrying amount is deemed a reasonable approximation of fair value given the short-term nature of these instruments.
Financial assets at fair value through profit or loss 5,791 2,512 9,186 3,364
Related amounts where set off in the balance sheet not permitted3 Potential net amounts if offset of related amounts permitted
Loans and advances to customers, net2 498,843 (2,762) 496,081 494,988 (2,792) 492,196
Performance bonds, including letters of credit, and other transaction-related contingencies 2,105 — 2,105 2,454 — 2,454
Total held at fair value through profit or loss 44,518 2,183 46,701 38,828 2,097 40,925 1 Credit ratings equal to or better than ‘BBB’.
Cash and balances at central banks 73,256 1 — — — — — — 73,257
Liabilities arising from insurance and investment contracts 1,321 1,763 2,573 2,542 3,159 9,488 27,132 106,534 154,512
Debt securities held as at amortised cost 131 19 — — — 74 3,085 2,235 5,544
Derivative financial liabilities: Gross settled derivatives – net flows 2,300 2,218 1,189 780 (837) 5,650
Total contingents, commitments and guarantees 69,044 3,116 15,704 4,819 7,595 17,912 14,258 3,999 136,447
Impairment of financial assets at fair value through other comprehensive income 5 (1) (14)
Total cash and cash equivalents 75,467 57,811 55,224 1 Mandatory reserve deposits are held with local central banks in accordance with statutory requirements; these deposits are not available to finance the Group's day-to-day operations.
Fair value and exchange adjustments and other non-cash items (512) (166) (715)
Net cash provided by (used in) operating activities 3,704 (8,997) 6,689
O ther inform ation Financial statem ents Lloyds Banking Group Annual Report and Accounts 2020 339
Details of the subsidiaries and related undertakings are given on pages 349 to 354 and are incorporated by reference.
Financial assets at fair value through profit or loss 14,362 14,362 14,362 — 12,516 12,516 12,516 —
The carrying amount of cash and cash equivalents (2020: £7 million; 2019: £29 million) is a reasonable approximation of fair value.
Allan Water Homes (Chryston) Ltd 50% 24B Kenilworth Road, Bridge Of Allan, Stirling, Scotland, FK9 4DU ii Allan Water Homes (Heartlands) Ltd 50% 24B Kenilworth Road, Bridge Of Allan, Stirling, Scotland, FK9 4DU ii Angus International Safety Group Ltd 88.93%
Unit 2, Orchard Place, Nottingham Business Park, Nottingham, NG8 6PX ii & xx Duchy Homes (Bowgreave) Ltd 50% Middleton House, Westland Road, Leeds, West Yorkshire, LS11 5UH ii Duchy Homes (North Cave) Ltd 50% Middleton House, Westland Road, Leeds, West Yorkshire, LS11 5UH ii Duchy Homes (Penistone) Ltd 50% Middleton House, Westland Road, Leeds, West Yorkshire, LS11 5UH ii Duchy Homes (Scawthorpe) Ltd 50% Middleton House, Westland Road, Leeds, West Yorkshire, LS11 5UH ii Duchy Homes (Winterley) Ltd 50% Middleton House, Westland Road, Leeds, West Yorkshire, LS11 5UH ii Duncan and Todd Holdings Ltd 89.25% 6 Queens Road, Aberdeen, AB15 4ZT ii & Ediston Homes Sauchie Ltd 50% 39/1 George Street, Edinburgh, EH2 2HN iii Eley Group Ltd 85.86% Selco Way, Off First Avenue, Minworth Industrial Estate, Minworth, Sutton Coldfield, B76 1BA ii & Ensco 997 Ltd 30.76%
Right Choice Holdings Ltd 89.25% St James House, 27-43 Eastern Road, Romford, Essex, United Kingdom, RM1 3NH ii & Rocket Science Holdings Ltd 99.17% Unit 2, Origin Business Park, Rainsford Road, Park Royal, London NW10 7FW xviii & Rolls Development UK Ltd (in liquidation) 50% 4th Floor , 4 Victoria Square, St Albans, Hertfordhsire, AL1 3TF, United Kingdom iii Sanders Brow (Armathwaite) Ltd 50% 4 Cowper Road, Gilwilly Industrial Estate, Penrith CA11 9BN ii Scenic Topco Ltd 89.25% Unit 1B, Pentwyn Business Centre, Wharfedale Road, Cardiff, Wales, CF23 7HB ii & Seahawk Bidco Ltd 89.25% Unit 2 Springfield Court, Summerfield Road, Bolton, BL3 2NT, United Kingdom xviii & SGI Holdings Ltd 99% Alton House, Alton Business Park, Alton Road, Ross-on-Wye, HR9 5BP ii & SHOO 802AA Ltd 89.25% Burleighfield House, London Road, Loudwater, Bucks. HP10 9RF xviii & Sigmat Group Ltd 89.25%
HBOS INTERNATIONAL INVESTMENT FUNDS ICVC 1 European Fund 93.42% Far Eastern Fund 80.45% International Growth Fund 52.44% Japanese Fund 94.72% North American Fund 95.26%
EC2R 7AF (55) 1-2 Victoria Buildings, Haddington Road, Dublin 4, Ireland (56) 48 Boulevard Grande-Duchesse Charlotte, 1330, Luxembourg (57) Caledonian Exchange, 19A Canning Street, Edinburgh, EH3 8HE (58) 11-12 Esplanade, St. Helier, Jersey, JE2 3QA (59) Karl-Liebknecht-STR. 5, D-10178 Berlin, Germany (60) 11-12 Esplanade, St. Helier, Jesey JE4 8ZU (61) 44 Esplanade, St. Helier, Jersey, JE4 9WG (62) 8 Avenue Hoche, 75008, Paris, France (63) 26 New Street, St. Helier, Jersey, JE2 3RA (64) Calle Pinar 7, 50 Izquierda, 28006, Madrid, Spain (65) Atria One, 144 Morrison Street, Edinburgh, EH3 8EX (66) Fifth Floor, 100 Wood Street, London, EC2V 7EX, United Kingdom