SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
12 July 2023
LLOYDS BANKING GROUP plc
(Translation
of registrant's name into English)
5th Floor
25 Gresham Street
London
EC2V 7HN
United Kingdom
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover Form 20-F or Form 40-F.
Form
20-F..X.. Form 40-F
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes
No ..X..
If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule
12g3-2(b):
82- ________
Index
to Exhibits
Item
No.
1 Regulatory News Service Announcement, dated 12 July
2023
re: BOE
STRESS TEST PASSED
12 July 2023
LLOYDS BANKING GROUP COMFORTABLY PASSES BANK OF ENGLAND STRESS
TEST
Lloyds Banking Group (the Group), together with seven other
financial institutions in the UK, has been subject to the 2022
annual concurrent scenario stress test (ACS), conducted by the Bank
of England (BoE). The 2022 ACS also assessed the ring-fenced
subgroups of the participating banks on a standalone basis for the
first time.
The Group is pleased to note that it has comfortably passed the
stress test and given this strong performance, the Group is not
required to take any capital actions. The BoE calculated the
Group's transitional CET1 ratio after the application of management
actions as 11.6 per cent and its leverage ratio as 4.5 per cent.
Despite the severity of the stress test scenario, and without the
conversion of the Group's AT1 securities into equity, the Group
significantly exceeded the capital and leverage hurdle rates of 6.6
per cent and 3.5 per cent respectively.
The ring-fenced bank (RFB) also passed the stress test, with the
BoE calculating the RFB's transitional CET1 ratio after the
application of management actions as 12.1 per cent, against the
hurdle rate of 7.2 per cent.
The 2022 ACS scenario was designed to test the resilience of the UK
banking system to deep, simultaneous recessions in the UK and
global economies, with large falls in asset prices and higher
global interest rates. The BoE stated at the outset of the exercise
that the focus of this hypothetical scenario was to ensure that
banks were able to absorb rather than amplify shocks, and continue
to lend to UK households and businesses. The scenario was more
severe than the last global financial crisis and combined rapidly
rising interest rates and unemployment, in conjunction with
significant falls in property prices and GDP. In particular, base
rates rose to 6 per cent in the first year before gradually
reducing to 3.5 per cent in subsequent years; inflation increased
to 17 per cent and took five years to recover to the Bank of
England's 2 per cent target; GDP fell by 5 per cent in the first
year, unemployment peaked at 8.5 per cent in the second year, and
UK house and commercial property prices fell 31 per cent and 45 per
cent respectively over the first three years. In addition to these
economic factors, and in line with previous years, the stress
scenario also reflected other risks such as conduct, alongside a
traded risk scenario.
This year's stress test was again run under the IFRS 9 accounting
standard and required the immediate recognition of expected credit
losses on a perfect foresight basis, rather than reflecting losses
as they were incurred. The BoE assessed the stressed projections on
an IFRS 9 transitional basis, in line with the phased
implementation approach of the standard. Results are also shown on
an IFRS 9 "fully-loaded" non-transitional basis. The Group as a
whole, as well as the RFB separately, comfortably exceeded both the
transitional and non-transitional hurdle rates in this stress
test.
This result reflects the Group's prudent balance sheet management
and strong capital position, having reported a CET1 ratio of 14.1
per cent and a UK leverage ratio of 5.6 per cent, post dividend
accrual, at 31 March 2022. The Group also continues to be strongly
capital generative with capital build over Q1 2023 of 52 basis
points, including the accelerated full-year £800 million
payment of fixed pension contributions for 2023.
Further details
Details of the BoE's approach to the stress test and the detailed
results in relation to all participating financial institutions are
available from the BoE website.
- END -
For further information:
Investor Relations
Douglas
Radcliffe
+44 (0) 20 7356 1571
Group Investor Relations Director
douglas.radcliffe@lloydsbanking.com
Corporate Affairs
Matt
Smith
+44 (0) 20 7356 3522
Head of Media Relations
matt.smith@lloydsbanking.com
FORWARD LOOKING STATEMENTS
This document contains certain forward-looking statements within
the meaning of Section 21E of the US Securities Exchange Act of
1934, as amended, and section 27A of the US Securities Act of 1933,
as amended, with respect to the business, strategy, plans and/or
results of Lloyds Banking Group plc together with its subsidiaries
(the Group) and its current goals and expectations. Statements that
are not historical or current facts, including statements about the
Group's or its directors' and/or management's beliefs and
expectations, are forward looking statements. Words such as,
without limitation, 'believes', 'achieves', 'anticipates',
'estimates', 'expects', 'targets', 'should', 'intends', 'aims',
'projects', 'plans', 'potential', 'will', 'would', 'could',
'considered', 'likely', 'may', 'seek', 'estimate', 'probability',
'goal', 'objective', 'deliver', 'endeavour', 'prospects',
'optimistic' and similar expressions or variations on these
expressions are intended to identify forward looking statements.
These statements concern or may affect future matters, including
but not limited to: projections or expectations of the Group's
future financial position, including profit attributable to
shareholders, provisions, economic profit, dividends, capital
structure, portfolios, net interest margin, capital ratios,
liquidity, riskweighted assets (RWAs), expenditures or any other
financial items or ratios; litigation, regulatory and governmental
investigations; the Group's future financial performance; the level
and extent of future impairments and write-downs; the Group's ESG
targets and/or commitments; statements of plans, objectives or
goals of the Group or its management and other statements that are
not historical fact; expectations about the impact of COVID-19; and
statements of assumptions underlying such statements. By their
nature, forward looking statements involve risk and uncertainty
because they relate to events and depend upon circumstances that
will or may occur in the future. Factors that could cause actual
business, strategy, plans and/or results (including but not limited
to the payment of dividends) to differ materially from forward
looking statements include, but are not limited to: general
economic and business conditions in the UK and internationally;
political instability including as a result of any UK general
election and any further possible referendum on Scottish
independence; acts of hostility or terrorism and responses to those
acts, or other such events; geopolitical unpredictability; the war
between Russia and Ukraine; the tensions between China and Taiwan;
market related risks, trends and developments; exposure to
counterparty risk; instability in the global financial markets,
including within the Eurozone, and as a result of the exit by the
UK from the European Union (EU) and the effects of the EU-UK Trade
and Cooperation Agreement; the ability to access sufficient sources
of capital, liquidity and funding when required; changes to the
Group's credit ratings; fluctuations in interest rates, inflation,
exchange rates, stock markets and currencies; volatility in credit
markets; volatility in the price of the Group's securities;
tightening of monetary policy in jurisdictions in which the Group
operates; natural pandemic (including but not limited to the
COVID-19 pandemic) and other disasters; risks concerning borrower
and counterparty credit quality; risks affecting insurance business
and defined benefit pension schemes; risks related to the
uncertainty surrounding the integrity and continued existence of
reference rates; changes in laws, regulations, practices and
accounting standards or taxation; changes to regulatory capital or
liquidity requirements and similar contingencies; the policies and
actions of governmental or regulatory authorities or courts
together with any resulting impact on the future structure of the
Group; risks associated with the Group's compliance with a wide
range of laws and regulations; assessment related to resolution
planning requirements; risks related to regulatory actions which
may be taken in the event of a bank or Group failure; exposure to
legal, regulatory or competition proceedings, investigations or
complaints; failure to comply with anti-money laundering, counter
terrorist financing, anti-bribery and sanctions regulations;
failure to prevent or detect any illegal or improper activities;
operational risks; conduct risk; technological changes and risks to
the security of IT and operational infrastructure, systems, data
and information resulting from increased threat of cyber and other
attacks; technological failure; inadequate or failed internal or
external processes or systems; risks relating to ESG matters, such
as climate change (and achieving climate change ambitions),
including the Group's ability along with the government and other
stakeholders to measure, manage and mitigate the impacts of climate
change effectively, and human rights issues; the impact of
competitive conditions; failure to attract, retain and develop high
calibre talent; the ability to achieve strategic objectives; the
ability to derive cost savings and other benefits including, but
without limitation, as a result of any acquisitions, disposals and
other strategic transactions; inability to capture accurately the
expected value from acquisitions; assumptions and estimates that
form the basis of the Group's financial statements; and potential
changes in dividend policy. A number of these influences and
factors are beyond the Group's control. Please refer to the latest
Annual Report on Form 20-F filed by Lloyds Banking Group plc with
the US Securities and Exchange Commission (the SEC), which is
available on the SEC's website at www.sec.gov, for a discussion of
certain factors and risks. Lloyds Banking Group plc may also make
or disclose written and/or oral forwardlooking statements in other
written materials and in oral statements made by the directors,
officers or employees of Lloyds Banking Group plc to third parties,
including financial analysts. Except as required by any applicable
law or regulation, the forward-looking statements contained in this
document are made as of today's date, and the Group expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward looking statements contained in
this document whether as a result of new information, future events
or otherwise. The information, statements and opinions contained in
this document do not constitute a public offer under any applicable
law or an offer to sell any securities or financial instruments or
any advice or recommendation with respect to such securities or
financial instruments.
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
LLOYDS
BANKING GROUP plc
(Registrant)
By: Douglas
Radcliffe
Name: Douglas
Radcliffe
Title: Group
Investor Relations Director
Date: 12
July 2023
Lloyds Banking (PK) (USOTC:LLDTF)
Historical Stock Chart
From Sep 2024 to Oct 2024
Lloyds Banking (PK) (USOTC:LLDTF)
Historical Stock Chart
From Oct 2023 to Oct 2024