Lloyds Banking Group plc London, United Kingdom

Transcription

1 JULY 8, 2015 BANKING COMPANY PROFILE Lloyds Banking Group plc London, United Kingdom Table of Contents: COMPANY OVERVIEW 1 FINANCIAL HIGHLIGHTS (AS REPORTED) 2 BUSINESS ACTIVITIES 3 DISTRIBUTION CAPACITY AND MARKET SHARE 5 OWNERSHIP AND STRUCTURE 5 COMPANY MANAGEMENT 6 COMPANY HISTORY 7 PEER GROUP 8 SUBSIDIARIES RATED BY MOODY S 8 RELATED WEBSITES AND INFORMATION SOURCES 9 MOODY S RELATED RESEARCH 9 Analyst Contacts: LONDON Carlos Suarez Duarte Vice President - Senior Analyst carlos.suarezduarte@moodys.com Maija Sankauskaite Associate Analyst maija.sankauskaite@moodys.com Company Overview Lloyds Banking Group Plc (LBG) is a UK-based financial services group. Its products and services include retail, commercial and corporate banking, general and life insurance, pensions and investments. The group maintains several brand names, including Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows. As of 31 March 2015, the group reported a consolidated asset base of billion. As of 31 December 2014, LBG operated in six countries. In the UK, it distributed its services through a network of more than 2,200 branches. The group was established in 2009 through the merger of Lloyds TSB Plc (established in 1995 following the merger of TSB Group Plc and Lloyds Bank Plc) and HBOS Plc (established in 2001 by the merger of Halifax Plc and Bank of Scotland Plc). Since 1986, its shares have been listed (prior to 2009 as TSB Group Plc stock) on the London Stock Exchange (Ticker: LLOY). As of 23 April 2015, the group s largest shareholder was the UK government, which held 20.95% of its total share capital (through The Solicitor for the Affairs of Her Majesty s Treasury). Source: Company Reports (annual report Dec 2014, form 20-F Dec 2014 and Q1 results Mar 2015), Company data, London Stock Exchange PARIS Nicholas Hill Managing Director - Banking nick.hill@moodys.com This report, exclusively provided to you by Moody s, presents a convenient summary of as reported, publicly available information. The information is not adjusted for Moody s analytic purposes. For Moody s Ratings, Opinion and Analytics on this company, please [Click here]. To access the latest Moody s Credit Opinion on this company, please [Click here].

2 Financial Highlights (as Reported) Note: The financials presented below are those reported by the entity and are not adjusted for Moody s analytic purposes. For Moody s generated ratios on Lloyds Banking Group Plc, please see <Lloyds Banking Group Plc page on moodys.com>. EXHIBIT 1 Latest Full-Year Results 1 Lloyds Banking Group Plc % Change % Change (in Billion) 31-Dec Dec Dec-12 14/13 13/12 Total Assets (9.72) Total Shareholders Equity (7.62) Shareholders Equity excluding Minority Interest (6.94) Total Capital Resources N/M Common Equity Tier 1 Ratio/Core Tier 1 Ratio (%) bps N/M Net Income 1.5 (0.8) (1.4) N/M N/M Net Income Attributable to Equity Holders 1.4 (0.8) (1.5) N/M N/M Notes: 1) Based on consolidated figures 2) Total Capital Resources and Common Equity Tier 1 Ratio for Dec 2014 and Dec 2013 are stated in accordance with the Prudential Regulation Authority transitional Basel III framework, while Core Tier 1 Ratio for Dec 2012 are in stated accordance with the Basel II framework. Source: Company Reports (annual report Dec 2014 and Dec 2013) EXHIBIT 2 Latest First-Quarter Results 1 Lloyds Banking Group Plc % Change (in Billion) 31-Mar Mar-14 15/14 Total Assets Total Shareholders Equity Shareholders Equity excluding Minority Interest N/A Total Capital Resources Common Equity Tier 1 Ratio (%) bps Net Income (18.76) Net Income Attributable to Equity Holders (20.47) Notes: 1) Based on consolidated figures 2) Shareholders Equity excluding Minority Interest for 31 Mar 2014 has been calculated by deducting Non-controlling interests from Total Shareholders Equity. Shareholders' Equity excluding Minority Interest for 31 Mar 2015 is not available. 3) Total Capital Resources and Common Equity Tier 1 Ratio for both quarters are stated in accordance with the Prudential Regulation Authority transitional Basel III framework. Source: Company Reports (Q1 results Mar 2015 and Mar 2014, Q1 presentation Mar 2014) This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on for the most updated credit rating action information and rating history. 2 JULY 8, 2015 COMPANY PROFILE: LLOYDS BANKING GROUP PLC

3 Business Activities LBG provides banking and other financial products and services in the UK and overseas. The bank operates through four business segments: Retail, Commercial Banking, Consumer Finance and Insurance. In addition, the group comprises a 40% stake in TSB which is in the process of being divested through the agreed sale to Banco Sabadell SA, the conclusion of which will allow the group to meet its EC state aid commitments. It also reports a Run Off and Central Items segment, which includes various noncore assets, the results of capital gains from the divestment of businesses sold during 2013 and 2014, and income and expenditure not included in other segments. In the financial year ended December 2014 (2014), the largest contributor to the group s total income was the Retail segment. Retail: Accounting for 46.3% 1 of the group s total income in 2014, this segment provides banking and other financial products and services to individuals, high-net-worth clients and small businesses. These include current and savings accounts, personal loans and mortgages, insurance, bank and credit cards, and long-term savings and investments. Its services are provided under the Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows brands. As of 31 December 2014, this segment reported total consolidated assets of billion. Commercial Banking: Accounting for 24.8% of the group s total income in 2014, this segment provides companies with banking and other financial products and services. These include deposit accounts, loans, transaction processing, and advisory services on capital markets (private placements, bonds and syndicated loans), financial markets (foreign exchange, interest rate management, money and credit) and private equity markets. It provides its services through various brands, including Lloyds Bank, Agricultural Mortgage Corporation, Lloyds Development Capital, Bank of Scotland and Scottish Widows. As of 31 December 2014, this segment reported total consolidated assets of billion. Consumer Finance: Accounting for 14.8% of the group s total income in 2014, this segment comprises the group s consumer and corporate credit card businesses provided under the Lloyds Bank, Bank of Scotland and Halifax brands. It also provides asset finance solutions, including motor financing (under the Black Horse brand), auto leasing and fleet management (under the Lex Autolease brand). The group s asset finance operations also manage European deposits and Dutch retail mortgage businesses. As of 31 December 2014, this segment reported total consolidated assets of 25.6 billion. Insurance: Accounting for 8.9% of the group s total income in 2014, this segment provides UK and European clients with general, house and life insurance, corporate pensions, and long-term savings and investment products. Its services are provided through the Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows brands. As of 31 December 2014, this segment reported total consolidated assets of billion. TSB: Accounting for 5.2% of the group s total income in 2014, this segment includes the operations of the separate banking business TSB Banking Group Plc, which was established to comply with commitments made to the European Commission in connection with the group s aid package, to divest various retail businesses including the TSB brand by December This segment provides a wide range of banking products to retail and small business customers in England, Wales and Scotland. In June 2014, the group sold 38.5% of its stake in TSB Banking Group Plc through an initial public offering. In September 2014, it divested an additional 11.5% stake. On 20 March 2015, the group agreed to sell its remaining 50% shareholding in TSB Banking Group Plc to Banco Sabadell SA for a maximum price of 850 million. As part 1 Throughout this section, such percentages are calculated excluding the Other segment 3 JULY 8, 2015 COMPANY PROFILE: LLOYDS BANKING GROUP PLC

4 of this agreement, it divested a 9.99% stake on 24 March As of 31 December 2014, this segment reported total consolidated assets of 27.0 billion. Source: Company Reports (annual report Dec 2014 and Q1 results Mar 2015), Moody s research, Company data EXHIBIT 3 Business Segment (% of Total Income, consolidated, for 2014) Insurance 8.9% TSB 5.2% Consumer Finance 14.8% Retail 46.3% Commercial Banking 24.8% Note: Excluding Other segment Source: Company Report (annual report Dec 2014, Pg: 203) EXHIBIT 4 Underlying Profit/(Loss) per Business Segment (consolidated, in Million) ,500 3,000 3,015 3,228 2,500 2,000 1,890 2,206 1,500 1, Retail Commercial Banking Consumer Finance Insurance TSB Notes: 1) Comparable figures are not available for 2012, due to changes in segment reporting in ) Excluding Other segment Source: Company Report (annual report Dec 2014, Pg: 203 and 204) 965 1,010 1, JULY 8, 2015 COMPANY PROFILE: LLOYDS BANKING GROUP PLC

5 Distribution Capacity and Market Share As of 31 December 2014, the group operated in six countries through a network of more than 2,200 branches and key brands, including Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows. LBG also supplies its products and services through alternative distribution channels, including ATMs and mobile, telephone and internet banking. As of 31 December 2014, the group held market shares of 21% in terms of retail deposits, 25% in terms of current account volumes, 21% in mortgages, 19% in terms of small and medium-size enterprise main bank relationship, and 15% in terms of unsecured loans. Source: Company Reports (annual report Dec 2014, annual presentation December 2014) Ownership and Structure Since 1986, LBG s shares have been listed (prior to 2009 as TSB Group Plc stock) on the London Stock Exchange, which is regulated by the Financial Conduct Authority (Ticker: LLOY). The group s American Depositary Shares are listed on the New York Stock Exchange. As of 31 December 2014, LBG reported 71,373,735,357 ordinary shares (nominal value: 10 pence), 412,215,065 preferred shares (nominal value: 25 pence), 1,420,175 preferred shares (nominal value: 25 cents) and 80,921,051 limited voting shares (nominal value: 10 pence). In 2009, the group was recapitalised. Following two share placements and open offers in January 2009 and June 2009, and a rights issue in December 2009, the UK government through The Solicitor for the Affairs of Her Majesty s Treasury acquired 43.4% of LBG s issued ordinary share capital. The government sold 4.3 billion shares on 20 September 2013 and 5.6 billion shares on 31 March 2014, which reduced its stake to approximately 24.9% as of 31 December On 17 December 2014, the UK government announced a six-month trading plan with Morgan Stanley & Co. International plc (Morgan Stanley), under which Morgan Stanley was given full discretion to conduct a measured and orderly sale of the group s shares on behalf of the UK government. The plan has been extended and will terminate in December The UK government has instructed Morgan Stanley to sell no more than 15% of the total trading volume in the group s shares over the duration of the plan. By 23 April 2015, the UK government had reduced its shareholding to 20.95%. 5 JULY 8, 2015 COMPANY PROFILE: LLOYDS BANKING GROUP PLC

6 Subsidiaries As of 31 December 2014, LBG s principal subsidiaries were as follows: EXHIBIT 5 Lloyds Banking Group Plc Subsidiary Country of Incorporation Nature of Business % Group Interest Lloyds Bank Plc England Banking and financial services 100 Scottish Widows Plc 1 Scotland Life assurance 100 HBOS Plc 1 Scotland Holding company 100 Bank of Scotland Plc 1 Scotland Banking and financial services 100 TSB Bank Plc 1, 2 Scotland Banking and financial services 50 St. Andrew s Insurance Plc 1 England General insurance 100 Clerical Medical Investment Group Limited 1 England Life assurance 100 Clerical Medical Managed Funds Limited 1 England Life assurance 100 Notes: 1) Indirectly owned 2) Following subsequent divestments, LBG s stake in TSB Bank Plc was reduced to 40%, as of 31 Mar Source: Company Reports (annual report Dec 2014, form 20-F Dec 2014, Q1 results Mar 2015) Company Management Company Management Current Title António Horta-Osório LBG: Group Chief Executive and Executive Director; Group Executive Fundação Champalimaud and Sociedade Francisco Manuel dos Santos: Non-Executive Director; London Business School: Governor; Wallace Collection: Chairman George Culmer LBG: Chief Financial Officer and Executive Director Group Executive Juan Colombás LBG: Chief Risk Officer and Executive Director; N/A International Financial Risk Institute: Member of Executive As of 7 May 2015 Board of Directors Affiliation Lord Blackwell LBG: Chairman; Nomination and Governance Interserve Plc: Chairman (C), Risk, Remuneration Anita Frew LBG: Deputy Chairman and Independent Non-Executive Director; Croda International Plc: Non-Executive Director and Chairman Designate; IMI Plc: Senior Independent Director António Horta-Osório LBG: Executive Director and Group Chief Executive; Fundação Champalimaud and Sociedade Francisco Manuel dos Santos: Non-Executive Director; London Business School: Governor; Wallace Collection: Chairman Nomination and Governance, Audit, Risk, Remuneration Group Executive 6 JULY 8, 2015 COMPANY PROFILE: LLOYDS BANKING GROUP PLC

7 Board of Directors Affiliation George Culmer LBG: Executive Director and Chief Financial Officer Group Executive Juan Colombás LBG: Executive Director and Chief Risk Officer; N/A International Financial Risk Institute: Member of Executive Alan Dickinson LBG: Independent Non-Executive Director; Willis Limited: Non-Executive Director; Urban & Civic Plc: Senior Independent Director Risk (C), Audit Carolyn Fairbairn Simon Henry LBG: Independent Non-Executive Director; Capita Plc, The Vitec Group, Competition and Markets Authority and UK Statistics Authority: Non-Executive Director; Marie Curie: Trustee LBG: Independent Non-Executive Director; Royal Dutch Shell Plc: Chief Financial Officer and Executive Director; 100 Group of UK FTSE CFOs: Member of Main ; European Round Table CFO Taskforce: Chairman Audit, Remuneration Audit, Risk Dyfrig John LBG: Independent Non-Executive Director Remuneration, Risk Nicholas Luff Nick Prettejohn Anthony Watson Sara Weller As of 7 May 2015 Source: Company data LBG: Independent Non-Executive Director; Reed Elsevier: Chief Financial Officer and Executive Director LBG: Independent Non-Executive Director; Scottish Widows Group, Britten-Pears Foundation and Royal Northern College of Music: Chairman; BBC Trust: Member LBG: Senior Independent Non-Executive Director; Hammerson and Witan Investment Trust: Senior Independent Director; Norges Bank: Member of Investment Management Corporate Governance Advisory Board LBG: Independent Non-Executive Director; United Utilities Group: Non-Executive Director; Cambridge University: Governing Council Member Audit (C), Nomination and Governance, Risk Audit, Risk Remuneration (C), Nomination and Governance, Audit, Risk Remuneration, Risk Company History LBG was founded in 2009 following the merger of Lloyds TSB and HBOS Plc. Lloyds TSB Plc was created in December 1995 as a result of the merger of Lloyds Bank Plc (established in 1765) and TSB Group Plc (1810). In 2000, Lloyds TSB Plc acquired Scottish Widows Plc (1815), a life insurance and investment company. HBOS Plc was created in September 2001 following the merger of Halifax Plc (1852) and Bank of Scotland (1695). In December 2009, LBG raised 9 billion by exchanging debt and 13.5 billion by a rights issue, as part of European Commission state aid. As a condition for receiving such support, the group announced various restructuring measures, which were approved by LBG and the commission in December These measures included: 7 JULY 8, 2015 COMPANY PROFILE: LLOYDS BANKING GROUP PLC

8 1) the disposal of a retail banking business with at least 600 branches, a 4.6% share of UK personal current accounts and approximately 19% of group mortgage assets within four years of state aid being approved. The business includes the TSB brand; the branches, savings accounts and branch-based mortgages of Cheltenham & Gloucester; the branches and branch-based customers of Lloyds TSB Scotland Plc and a related banking licence; additional Lloyds TSB branches in England and Wales, together with branch-based customers; and Intelligent Finance 2) an asset reduction programme to achieve a 181 billion decrease in a specified pool of end-2008 assets by 31 December 2014 (completed in 2012) 3) behavioural commitments, including not to make certain acquisitions for a period of approximately three to four years, and not to make discretionary payments of coupons or to exercise voluntary call options on hybrid securities from 31 January January 2012, which also prevented the group from paying dividends on its ordinary shares during the same period In September 2013, the group rebranded its retail banking business (to be sold) as TSB. Subsequently, this company was operated separately within the group through TSB Banking Group Plc (a holding company), to comply with undertakings given to the European Commission. Furthermore, Lloyds Bank Plc was separated from Lloyds TSB Plc. In June 2014, the group sold 38.5% of its stake in TSB Banking Group Plc through an initial public offering. In September 2014, it divested an additional 11.5% of the shares. On 20 March 2015, the group agreed to sell its remaining 50% stake in TSB Banking Group Plc to Banco Sabadell SA for a maximum price of 850 million. As part of this agreement, it sold a 9.99% stake on 24 March Source: Company Reports (annual report Dec 2014, Dec 2008 and Dec 2007, Q1 results Mar 2015), Company data, Moody s research Peer Group» Santander UK plc» Nationwide Building Society» Barclays Bank plc» Royal Bank of Scotland Group plc» HSBC Bank plc Subsidiaries Rated by Moody s» Lloyds Bank plc» HBOS plc» Bank of Scotland plc» Scottish Widows plc 8 JULY 8, 2015 COMPANY PROFILE: LLOYDS BANKING GROUP PLC

9 Related Websites and Information Sources For additional information, please see:» The company s website: The regulator s website: MOODY S has provided links or references to third party World Wide Websites or URLs ("Links or References") solely for your convenience in locating related information and services. The websites reached through these Links or References have not necessarily been reviewed by MOODY S, and are maintained by a third party over which MOODY S exercises no control. Accordingly, MOODY S expressly disclaims any responsibility or liability for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on any third party web site accessed via a Link or Reference. Moreover, a Link or Reference does not imply an endorsement of any third party, any website, or the products or services provided by any third party. Moody s Related Research Credit Opinions:» Lloyds Bank plc» United Kingdom, Government of Analysis:» United Kingdom, Government of, June 2015 (182137) Banking System Outlook:» United Kingdom, August 2014 (173584)» Netherlands, February 2014 (164988) Banking System Profile:» United Kingdom, December 2013 (161975) Country Statistics:» United Kingdom, Government of, May 2015 Special Comments:» Sale of TSB Bank is Credit Positive for Lloyds, March 2015 ( )» Resumption of Dividend Payment and Strong Capital Metrics Highlight Ongoing Positive Trend in Credit Fundamentals, March 2015 ( ) To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of this report and that more recent reports may be available. All research may not be available to all clients. 9 JULY 8, 2015 COMPANY PROFILE: LLOYDS BANKING GROUP PLC

10 Report Number: Author Maija Sankauskaite Editor Karen Wong Production Specialist Kerstin Thoma 2015 Moody s Corporation, Moody s Investors Service, Inc., Moody s Analytics, Inc. and/or their licensors and affiliates (collectively, MOODY S ). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATING AFFILIATES ( MIS ) ARE MOODY S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY S ( MOODY S PUBLICATIONS ) MAY INCLUDE MOODY S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY S OPINIONS INCLUDED IN MOODY S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY S ANALYTICS, INC. CREDIT RATINGS AND MOODY S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. MOODY S CREDIT RATINGS AND MOODY S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS FOR RETAIL INVESTORS TO CONSIDER MOODY S CREDIT RATINGS OR MOODY S PUBLICATIONS IN MAKING ANY INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided AS IS without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody s Publications. To the extent permitted by law, MOODY S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY S. To the extent permitted by law, MOODY S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY S IN ANY FORM OR MANNER WHATSOEVER. Moody s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody s Corporation ( MCO ), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody s Investors Service, Inc., have, prior to assignment of any rating, agreed to pay to Moody s Investors Service, Inc., for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at under the heading Investor Relations Corporate Governance Director and Shareholder Affiliation Policy. For Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY S affiliate, Moody s Investors Service Pty Limited ABN AFSL and/or Moody s Analytics Australia Pty Ltd ABN AFSL (as applicable). This document is intended to be provided only to wholesale clients within the meaning of section 761G of the Corporations Act By continuing to access this document from within Australia, you represent to MOODY S that you are, or are accessing the document as a representative of, a wholesale client and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to retail clients within the meaning of section 761G of the Corporations Act MOODY S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail clients. It would be dangerous for retail clients to make any investment decision based on MOODY S credit rating. If in doubt you should contact your financial or other professional adviser. For Japan only: Moody's Japan K.K. ( MJKK ) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody s SF Japan K.K. ( MSFJ ) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ( NRSRO ). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively. MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000. MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements. 10 JULY 8, 2015 COMPANY PROFILE: LLOYDS BANKING GROUP PLC