Full Year 2024 Lloyds Banking Group PLC Earnings Call Transcript
Key Points
- Lloyds Banking Group PLC (LYG) reported a robust financial performance for 2024, with statutory profit after tax reaching GBP4.5 billion, or GBP5 billion excluding a Q4 motor provision.
- The company announced a 15% increase in the ordinary dividend and a share buyback of GBP1.7 billion, reflecting strong shareholder distributions.
- Lloyds Banking Group PLC (LYG) achieved GBP0.8 billion of additional revenues from strategic initiatives, surpassing their target of GBP0.7 billion.
- The group delivered GBP1.2 billion of gross cost savings, more than offsetting inflationary pressures.
- Lloyds Banking Group PLC (LYG) maintained a strong capital position with a CET1 ratio of 13.5% after dividend and buyback distributions, meeting their guidance.
- An additional GBP700 million provision was taken in Q4 related to motor finance commissions, impacting return on tangible equity and capital generation.
- Operating costs increased by 3% year-on-year to GBP9.4 billion, in line with guidance but reflecting inflationary pressures.
- The impairment charge for the year was GBP433 million, equating to an asset quality ratio of 10 basis points, with expectations for this to rise to circa 25 basis points in 2025.
- The company faces uncertainties related to the Supreme Court's decision on motor finance commissions, which could impact financial outcomes.
- Despite strong performance, the company anticipates ongoing headwinds from mortgage refinancing and deposit churn, which may affect future income growth.
Good morning, everyone, and thank you for joining our 2024 full year results presentation at our brilliant new London headquarters. We will officially open the building to colleagues over the coming weeks. So we are very pleased to welcome you as our first guests.
Let's hope everything goes all right. As we now reached the end of our first phase of our five year strategic transformation, our presentation will be slightly longer today. I'll start with a brief overview before handing over to William, who will run through the 2024 financials in detail. After this, I'm excited to share more detail on our strategic progress over the first three year phase as well as our plans for the remaining two years as we continue to transform the business at pace.
We'll then have the usual time allocated for your questions. Let me begin on slide 3. I'd like to start by highlighting three key messages. Firstly, our purpose led strategy is continuing to deliver strong outcomes for all stakeholders. We've made
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