Lloyds Banking Group Barclays 24th Annual Global Financial Services Conference

Thank you for inviting me.

Yeah. Thank you, Aman, and as I said, thank you for inviting me here, and thank you to everybody for taking the time to join us today. I guess, first of all, in terms of what have we tried to do over 2022 to 2026, Aman. Essentially three things. One is restore growth within the business, two is improve the efficiency of the business, and three is de-risk the business. I think we achieved some success in respect of each of those three. If I think about our market share in target areas, we increased it by around 3% on average. If I think about the efficiency point, we got to greater than GBP 2 billion in gross cost savings. If I think about de-risking, we took the pension deficit down from GBP 7 billion to zero.

We did about GBP 28 billion of RWA optimization, a fair chunk of that in the context of the legacy mortgage book. Some decent successes in that respect, Aman. What it does is it gives us a very firm foundation for delivering 2026 ambitions, which as you know, are terribly important to us. At the same time, the foundation for Accelerate 2030. Accelerate 2030 really builds upon that. Maybe the first port of call is to say you will have seen our participation decisions. They are very consistent with where we left off, number one, and they are very consistent with the core strengths of the group, number two. The strategy beyond that, I will maybe just spend a moment in terms of dissecting. First of all, it is about enhancing customer experience. Second of all, it is about improving group connectivity.

Third of all, it is about improving group productivity, i.e. efficiency.

Fourth of all, it is about driving all of that through the implementation and introduction of new technologies right the way across the business. That is the strategy. We put it forward, it rests upon three pillars. Grow the core. Grow the core is pretty much what the name suggests. That is to say, taking advantage of our market leadership positions and developing those further, whether that is through technology, whether it is through rewards, whether it is through ecosystems, whether it is through proposition enhancement. All of the above, really, but it is about growing just at the core. The second we describe as innovate deeper and diversify. Again, the objective is really in the name, and it is about innovative offerings across the group. Sometimes those will be standalone. Wealth is an example. Sometimes those will rely upon cross-group behaviors. Bancassurance is one example of that.

Innovative banking within BCB linking up retail. BCB and Wealth is another example of that. In most cases, they will hinge upon and benefit from the introduction of new technology. Just like growing the core will benefit from the introduction of the rewards program. The third pillar is simplification. Simplify to outperform is the way that we've named it, and there are three components to that. One is about an AI-enabled data set operating on a set of modernized platforms. Absolutely key. The second is that will then allow us to access efficiencies in terms of the operations of the bank, in terms of the servicing of the bank, and so forth. Related to that, thirdly, about capital optimization and about continued capital efficiency. So those are the three pillars, if you like, that the strategy rests upon. Where does that take us?

It takes us to the financial outcomes that we have articulated. So mid-single digits income growth, and within that high single digits ROI growth. Sub 45% cost income ratio. Circa 20% RoTE by the time we get to 2030, as you highlighted, Aman. In addition to that, greater than 225 basis points capital generation, again by the 2030 period. So that's really the financial outcome of what I've just outlined as the strategy in Accelerate 2030. We're looking forward to it.

Sure. I mean, I wouldn't claim necessarily privileged insight into that point, but let me address it in my comments. The first part of your question, Aman, is about how do we see the operating environment right now.

Yeah. In two words really, the operating environment as we see it is pretty constructive.

It's not a bad operating environment. We put forward, as you know, some relatively modest, I guess you might describe them as prudent forecasts for the macro over the course of 2026 and 2027, and indeed beyond. We're looking at GDP growth of shade over 1%. We're looking at HPI growth probably about the same for each of the two years that I've just described. We're looking at unemployment peaking at around 5.5% sometime probably Quarter 1, Quarter 2 next year. Overall, some relatively modest expectations for how the economy's going to play out I would say so far, Aman, the actual performance has probably exceeded our expectations.