Lloyds Banking Group plc (LYG): Business Model Canvas [Dec-2025 Updated]

You're analyzing a titan of UK finance, and frankly, the late 2025 picture shows a massive retail bank aggressively pivoting to digital while still anchored by its core franchise. This institution, serving about 28 million UK customers, is balancing a £244 billion structural hedge portfolio with significant tech investment, aiming for roughly £13.5 billion in Net Interest Income for the full year. To see the precise mechanics of how they connect their trusted brands, digital acceleration, and risk management across the entire operation, check out the full Business Model Canvas we've mapped out below.

Lloyds Banking Group plc (LYG) - Canvas Business Model: Key Partnerships

You're looking at how Lloyds Banking Group plc builds value through its external relationships, which is key to staying ahead in UK finance. These aren't just vendor agreements; they are strategic alliances driving innovation and security. Here's the quick math on the most significant ones as of late 2025.

Fintech Investment in Aveni for a Financial Services Large Language Model (FinLLM)

Lloyds Banking Group plc is actively partnering with AI fintech Aveni to develop FinLLM, a large language model specifically for financial services. This collaboration was cemented by Lloyds Banking Group's investment in Aveni's Series A funding round, which totaled £11 million in 2024. The goal is to set a new standard for responsible, ethical generative AI use, outperforming generic models on financial tasks.

Collaboration with Yoti for Digital Identity and the 'Smart ID' app

To combat identity fraud, Lloyds Banking Group plc invested £10 million in Yoti in February 2023, converting that loan to equity later. This partnership supports the creation of the 'Lloyds Bank Smart ID' app. The combined network, 'Digital ID Connect' (including Yoti ID and Post Office EasyID), has seen the total number of Digital ID installs in the UK reach over 5 million (as of September 2024). Monthly usage sees over 100,000 people using these services for checks like right to work, with about 25% opting for the reusable Digital ID.

Launch Innovation Programme for Start-ups like Caura and Doshi

The Launch Innovation Programme is a 12-week collaborative effort designed to fast-track experimentation with agile start-ups across any industry. The FinTech Investment Team reviews applicants, ready to invest in seed to Series B businesses. Success stories show tangible outcomes: Caura, a motoring app, secured a £4 million investment from the Group. Doshi partnered to develop a gamified financial education platform. Applications for the 2025 cohort are closed.

UK Government and Police for Fraud Prevention Schemes

Lloyds Banking Group plc runs a unique, industry-first fraud prevention scheme, launched in 2021, which funds initiatives using money seized directly from criminals. As of late 2025, this initiative has seen £15 million of frozen criminal funds seized and invested. This funding supports partners like the Dedicated Card and Payment Crime Unit (DCPCU), which resulted in 113 arrests and the seizure of an additional £3 million in criminal assets. The Group's internal consumer prevention rate is quite strong, stopping 74p in every £1 of unauthorised fraud.

Co-chairing UK Finance's Project for GB Tokenised Deposits (GBTD)

Lloyds Banking Group plc is a co-chairing bank in the industry pilot for Tokenised Sterling Deposits (GBTD), led by UK Finance. This pilot, which includes Barclays, HSBC, NatWest, Nationwide, and Santander, is set to run until mid-2026. The technology aims to deliver programmable payments across three use cases: person-to-person payments, remortgaging, and digital asset settlement. Chief Executive Officer Charlie Nunn indicated the Group is gearing up for a full rollout of tokenized deposits in the first half of 2027.

The scale of these external collaborations can be summarized here:

Partnership Focus	Partner/Programme	Key Financial/Statistical Metric (Latest Data)	Status/Timeline
AI/LLM Development	Aveni (for FinLLM)	£11 million Series A investment participation (2024)	Ongoing co-creation of FinLLM
Digital Identity	Yoti (for 'Smart ID' app)	£10 million initial investment (Feb 2023)	UK installs over 5 million Digital IDs
Start-up Incubation	Launch Innovation Programme	Past participant Caura received £4 million investment	12-week programme structure
Fraud Prevention	UK Police/Home Office Schemes	£15 million of seized criminal funds invested since 2021	DCPCU funding led to 113 arrests
Payments Modernization	UK Finance GBTD Pilot	Pilot running until mid-2026	Targeting full rollout in H1 2027

You can see the focus is heavily weighted toward future-proofing the business through technology adoption and defense against financial crime. The Group's internal fraud prevention rate stopping 74p in every £1 is a direct result of these public/private sector efforts.

Finance: draft 13-week cash view by Friday.

Lloyds Banking Group plc (LYG) - Canvas Business Model: Key Activities

You're looking at the core engine room of Lloyds Banking Group plc-the essential actions they take every day to run the business and execute their strategy as of late 2025. It's a mix of traditional banking muscle and aggressive modernization.

Core retail and commercial lending, especially mortgages and business loans

The foundation remains lending across the UK. You see this activity reflected in the balance sheet growth. For the first half of 2025, the total increase in loans and advances to customers was substantial, hitting £10,735 million. A major component of that was the growth in their core mortgage book, which specifically saw an increase of £5,611 million in that same period. This core activity is what drives their Net Interest Income (NII), which reached £9,808 million for the first nine months of 2025.

Here's a quick look at the scale of their interest-earning assets supporting this activity:

Metric	Value (as of latest report)
Average Interest-Earning Banking Assets (Q3 2025)	£466 billion
Net Interest Income (9M 2025)	£9,808 million
UK Mortgage Growth (H1 2025)	£5,611 million

Still, the mortgage margin compression and deposit mix headwinds show that even core lending isn't without its challenges.

Accelerating digital transformation and deploying over 800 AI models

Lloyds Banking Group is pushing hard to digitize, moving away from legacy systems to deploy advanced models. They completed a migration of their machine learning and data science platform to Google Cloud's Vertex AI, replacing systems that were nearly a decade old. This move has been central to their ability to scale AI deployment. Honestly, this is where the future efficiency gains are coming from.

The scale of their AI activity is significant:

• Migrated 15 modelling systems, comprising hundreds of individual models.
• Over 300 data scientists and AI developers are now using the new platform.
• The Group had more than 800 AI models live at the end of 2024.
• They have launched over 18 Generative AI (GenAI) systems into production, with 12 more expected by the end of June 2025.
• One key deployment is an algorithm that reduces mortgage income verification from days to seconds.

Managing a £244 billion structural hedge portfolio for interest rate stability

A key activity for managing interest rate risk involves their sterling structural hedge. This portfolio acts as a financial shield, stabilizing earnings from rate-insensitive liabilities like current accounts when they are deployed into floating-rate assets. As of June 30, 2025, the notional balance of this hedge stood at £244 billion, up slightly from £242 billion at the end of 2024. This activity is providing a material tailwind to income.

The financial impact of this hedging activity is clear in the H1 2025 results:

• Structural hedge earnings amounted to £2.6 billion in H1 2025.
• This is an increase over the £1.9 billion generated in the first half of 2024.
• Lloyds Banking Group expects 2025 hedge income to be approximately £1.2 billion higher than in 2024.
• They project 2026 hedge income to be £1.5 billion higher than in 2025.

The weighted average duration of the hedge remains stable at approximately three-and-a-half years.

Integrating wealth management post-acquisition of Schroders Personal Wealth

A major strategic action in late 2025 was taking full control of the wealth management joint venture. On October 9, 2025, Lloyds Banking Group acquired the remaining 49.9% stake in Schroders Personal Wealth (SPW) from Schroders. This was executed via a share exchange, transferring Lloyds' 19.1% stake in Cazenove Capital, with no cash consideration involved. The business, which will be rebranded as Lloyds Wealth, supports approximately £17 billion in assets under administration (AUA) for around 60,000 clients.

The profitability contribution from this activity in the first half of 2025 was about £45 million in operating profit. Full ownership is intended to create a more integrated banking and investment proposition across the group's brands.

Proactive risk management and remediation, like the £1.95 billion motor finance provision

Managing historical conduct risk is a significant, non-lending activity consuming resources. The primary focus here is the motor finance commission arrangements scandal. Following the Financial Conduct Authority's (FCA) proposed redress scheme, Lloyds Banking Group increased its provision significantly. They booked an additional £800 million charge in Q3 2025, bringing the total provision to £1.95 billion. This total provision of £1.95 billion represents the group's best estimate for both redress and operational costs related to the issue. This charge was taken on top of the existing provision of £1.15 billion. The FCA's wider industry scheme is projected to cost banks around £11 billion overall.

The financial impact of remediation in the first nine months of 2025 included recognizing £912 million of remediation costs. This remediation charge, alongside higher impairments, contributed to the statutory profit before tax falling 9% year-on-year to £4,678 million for the nine-month period.

Lloyds Banking Group plc (LYG) - Canvas Business Model: Key Resources

You're looking at the core assets that power Lloyds Banking Group plc's operations as of late 2025. These aren't just line items on a balance sheet; they are the engines driving their market position in the UK.

The sheer scale of the customer franchise is a primary resource. Lloyds Banking Group plc is the largest UK retail and commercial financial services provider, engaging with approximately 26 million customers. This massive base is the foundation for cross-selling and deepening relationships across their product suite.

Financially, the Group maintains a robust position, which is critical for absorbing shocks and funding growth. The Common Equity Tier 1 (CET1) ratio, a key measure of a bank's core capital strength, remained at a solid 13.8% as of the third quarter of 2025.

The portfolio of trusted brands allows Lloyds Banking Group plc to segment the market effectively and maintain deep penetration across different customer needs. This includes:

• Lloyds Bank
• Halifax
• Scottish Widows
• The recently fully acquired Schroders Personal Wealth, which brought in approximately £17 billion in assets under administration.

Proprietary data and technology capability are central to the near-term strategy. The Group is actively building out its tech and data expertise. This includes a significant expansion in India, aiming to have 4,000 permanent technology and data employees in Hyderabad by the end of 2025. Concurrently, the Group is creating 1,200 net new roles in the UK IT department as part of its transformation efforts.

The physical branch network, while shrinking due to digital adoption, remains a key differentiator for in-person service, especially for complex needs or less digitally-engaged customers. The network is undergoing rationalization, but the scale is still significant.

Here's a breakdown of the physical footprint following recent closure announcements:

Brand	Remaining Branch Count (Approximate)
Lloyds Bank	359
Halifax	269
Bank of Scotland	77
Total Group Branches	705

This total of 705 branches is a stark contrast to the more than 2,200 high street branches the banking group had a decade ago. Still, customers have access to any of the Group's brands' branches for in-person banking.

The Group's lending book and deposit base also represent tangible resources supporting operations:

• Total Lending Book (as of Q3 2025): £477.1 billion, up 4% year-to-date.
• Total Deposits (as of Q3 2025): £496.7 billion, up 3% year-to-date.

Finance: draft 13-week cash view by Friday.

Lloyds Banking Group plc (LYG) - Canvas Business Model: Value Propositions

You're looking at the core value Lloyds Banking Group plc delivers across the UK market, grounded in its scale and recent strategic investments.

Comprehensive, multi-brand financial services for UK households and businesses

Lloyds Banking Group plc supports practically every sector of the UK economy, serving millions of people and businesses daily through its portfolio of brands. The Group's purpose remains Helping Britain Prosper. You see this scale reflected in their commitment to the UK economy, with plans to make over £35 billion of new finance available in 2026 to companies operating and investing in the UK, of which £9.5 billion is dedicated to small and medium-sized enterprises (SMEs). This broad reach is a core value proposition for customers needing integrated financial solutions.

Enhanced digital experience via AI and mobile-first journeys

The Group is cementing its status as the UK's digital and AI leader by embedding new technologies across its platforms. This focus drives both customer experience and efficiency gains. You'll find more than 800 AI models in production across the group today. The mobile-first journey is highly successful; over 75% of all product sales now go through the mobile app, a 20 percentage point increase since 2021. Furthermore, the AI-powered search function in the app enables 4 million Large Language Model searches a month. The Group serves more than 20.9 million digitally active customers.

Financial wellbeing and security, including a unique fraud prevention scheme

Security is a major value driver, especially as digital transactions rise. Lloyds Banking Group plc has committed over £100 million to advanced fraud detection systems. A specific tool helps customers spot and resolve errors or possible fraudulent activity, flagging about 12,000 disputes every month in 2025. This pioneering fraud prevention action has seen the Group inject a further £5 million in funding, bringing the total funding to £15 million since 2021. The Group is also expanding access to financial planning tools; for instance, around 40% of new users for the Ready Made Pensions offering identify as self-employed.

Wealth and investment management for mass-affluent clients (e.g., Lloyds Premier)

The proposition for the mass affluent segment is crystallized in Lloyds Premier, designed for customers with an income of £100k+ or equivalent assets. This is a mobile-first, personalised offering that unites various Group services. For example, Lloyds Premier customers get fee-free ready-made investments for a whole year. In the broader wealth space, Schroders Personal Wealth, which is transitioning to become Lloyds Wealth, achieved an 4.8 "Excellent" rating on Trustpilot based on 1,609 reviews as of October 2025. The Group is seeing traction here, with Mass Affluent mortgage share up 4 percentage points year-over-year in H1 2025.

Commitment to sustainability, providing over £9 billion in sustainable finance (H1 2025)

Sustainability is woven into the strategy, shaping finance as a force for good. In the first half of 2025 alone, the Group provided approximately US$11.6 billion (£9 billion) in sustainable financing. This brings the total sustainable finance provided since 2022 to more than US$73.4 billion (£57 billion). The Group is targeting >£1.9 billion in additional annual revenue from strategic sustainability and technology initiatives by 2026, having already achieved over £1 billion to date. They are also on track to deliver £30 billion in sustainable financing between 2024 and 2026.

Here's a quick view of some key metrics underpinning these value propositions:

Value Proposition Area	Metric	Value/Amount	Period/Date
Digital Experience	Product Sales via Mobile App Share	>75%	Late 2025
Digital Experience	AI Models in Production	>800	Late 2025
Financial Security	Total Fraud Prevention Funding Since 2021	£15 million	Late 2025
Wealth Management	Lloyds Premier Customer Asset/Income Threshold	£100k+	2025
Sustainability	Sustainable Finance Provided	US$11.6 billion (£9 billion)	H1 2025
Sustainability	Total Sustainable Finance Since 2022	>US$73.4 billion (£57 billion)	Late 2025

The Group's value delivery is also supported by specific product features and customer engagement points:

• Lloyds Premier includes ongoing 1% cashback on everyday spending.
• Lloyds Premier offers fee-free ready-made investments for a whole year.
• The Group pledged US$63.8 million (£50 million) in lending to support the Homewards programme tackling homelessness.
• Since 2018, Lloyds has lent more than US$127.6 billion (£100 billion) to first-time homebuyers.
• The Group's statutory post-tax profit for H1 2025 was US$3.2 billion (£2.5 billion).

If you're a customer, you're benefiting from this scale and investment defintely.

Lloyds Banking Group plc (LYG) - Canvas Business Model: Customer Relationships

Lloyds Banking Group plc serves approximately 26 million customers across the United Kingdom, requiring a multi-faceted approach to relationship management that balances digital scale with specialist human interaction.

Automated self-service via digital channels and AI-powered tools

The foundation of mass-market customer interaction is digital automation. As of late 2025, the Group builds on a base where over 20 million customers actively use the Lloyds mobile app. The adoption of Artificial Intelligence (AI) is significant, with more than 28 million UK adults using AI for personal finance in the past year, making it the nation's number one use of AI. Lloyds Banking Group has woven AI into its operations, running over 800 AI models in production. The in-app AI-powered search function supports 4 million Large Language Model searches a month. Nearly 1 in 3 adults use AI weekly for personal finance, with users reporting an average annual estimated saving of £399.

Dedicated relationship managers for Commercial Banking and Wealth clients

For higher-value and more complex segments, dedicated human support remains vital. The Commercial Banking segment saw deposits grow by £5.3 billion in Q2 2025, driven by growth in targeted sectors. The Group reinforced its commitment to this area by appointing a new Chief Executive Officer for Corporate & Institutional Banking (CIB) in November 2025. While specific Wealth client numbers aren't detailed, the Group's acquisition of Schroders Personal Wealth in Q4 2025 suggests a strategic move to deepen relationships in this high-net-worth area, with the combined entity potentially exceeding £9.7 billion in assets under administration.

High-touch, in-branch advisory services for complex products like mortgages

Mortgages represent a key area where high-touch advisory remains relevant, especially during market transitions. In the first half of 2025, Lloyds Banking Group recorded 14% growth in gross new mortgage lending, reaching £5.6 billion. The total mortgage balances stood at £317.9 billion as of H1 2025. While digital remortgage processes are accelerating adoption, the bank completed approximately £8 billion in lending to first-time buyers in the first six months of 2025. The protection take-up rate among mortgage borrowers reached 20%, an increase of seven percentage points year-over-year, indicating successful cross-selling during the advisory process.

Personalized digital offerings to drive deeper product holdings

The strategy focuses on using digital personalization to increase product holdings per customer. The bank aims to use a simplified yet more personalized experience on a single platform to help existing consumers buy more products. For example, personalized features in the mobile app, such as 'Ready-Made Investments,' are popular with younger demographics, with 40% of users under 35 engaging with them. Furthermore, over 780,000 customers actively use the in-app credit score tracker to manage their financial wellbeing.

Proactive communication on financial crime and security, defintely a focus

Security and fraud prevention are central to maintaining customer trust. Lloyds Banking Group announced an injection of £5 million into a fraud prevention scheme in November 2025, bringing the total funding committed to this initiative to £15 million since 2021. This proactive investment underpins the communication around security, which is critical given the high volume of digital interactions.

Here's a quick look at key customer engagement metrics as of 2025 data points:

Metric Category	Key Figure	Context/Period
Total Customers Served	26 million	Overall UK customer base
Digitally Active Customers	22.7 million	As of 2024, informing 2025 strategy
AI Users (Personal Finance)	28 million (56% of UK adults)	Past year usage
AI Models in Production	Over 800	Across the Group
Mortgage Lending (H1 2025)	£5.6 billion	Gross new lending
Mortgage Protection Take-up	20%	Among mortgage borrowers (H1 2025)
Fraud Prevention Funding (New)	£5 million	Injection in Nov 2025

The Group's focus on digital empowerment is clear, with more UK adults online in 2025 than ever before, equivalent to a rise of 6.3 million since 2016.

Lloyds Banking Group plc (LYG) - Canvas Business Model: Channels

You're looking at how Lloyds Banking Group plc (LYG) gets its products and services to its customers as of late 2025. It's a mix of massive digital scale and a carefully managed physical footprint, plus specialist routes for insurance and pensions.

Digital banking apps and online platforms (mobile-first focus)

The digital channel is definitely the primary engine now. Lloyds Banking Group plc reports serving over 23 million digitally active customers, with more than 21 million of those actively using the mobile app. This digital preference is clear in the transaction data, as digital channels now account for over 95% of retail sales. The Group has poured over £4 billion into its digital transformation to support this shift. Furthermore, the integration of new technology is visible within the app itself; the AI-powered search function handles around 4 million Large Language Model searches monthly. This focus on digital empowerment is also seen in customer behavior, with 56% of UK adults-or about 28 million people-using AI for personal finance in the past year, estimating an average annual saving of £399 from AI-generated insights.

Extensive network of physical bank branches and ATMs across the UK

Despite the digital push, a physical presence remains, though it's shrinking according to plan. Lloyds Banking Group plc has been executing a significant overhaul, planning to close 292 branches between January 2024 and December 2025. Once these closures are complete, the Group is projected to maintain a network of 892 branches across its brands. This remaining physical footprint is distributed as follows:

• Digital transformation is accelerating revenue growth, efficiency and customer engagement, positioning the Group for continued leadership in the era of generative and agentic AI.
• The Group now serves over 23 million digitally active customers and more than 21 million mobile app users.
• Digital channels now account for over 95% of retail sales.
• The Group has hired around 8,000 tech and data experts since 2021.
• Athena, the Generative AI tool for colleagues, has saved telephone banking teams over 4,000 hours.

To support cash access in communities where branches have closed, the Group is part of the wider industry effort. As of September 2025, there are 186 shared banking hubs operational across the UK, offering face-to-face support for customers of multiple lenders.

Dedicated contact centers and telephone banking services

The contact centers are being augmented by technology to improve efficiency for complex queries. The internal AI tool, Athena, which supports customer service colleagues, has already completed over 2.1 million searches across 13,000 internal articles. This has resulted in a 66% reduction in search time, freeing up telephone banking teams to focus on more involved customer issues.

Specialist brand channels like Scottish Widows for pensions and insurance

The Insurance, Pensions, and Investments (IP&I) segment, which includes Scottish Widows, operates through dedicated channels and digital platforms. For the 2024 fiscal year, the IP&I division saw its revenue increase to £1.16 billion, up from £1.08 billion the prior year, with underlying profit rising to £220 million from £190 million in 2023. Scottish Widows itself has more than one million digitally registered customers. Its dedicated workplace pension app is used by over 400,000 users, with 60% of those being active users. The workplace pensions business under administration stands at £108 billion in AUA, and the division is targeting a digital waterfront scale of over 1.5 million customers by 2026.

Embedded finance integrations via partnerships and acquisitions

Lloyds Banking Group plc is actively participating in the decentralization of financial services through integrations and strategic alliances. The Group's focus on partnerships was recognized at the 2025 Banking Tech Awards, where it won 'Best Bank & FinTech Partnership' with InBest. Additionally, a collaboration with Publicis Sapient for Intelligent Pricing won 'Best Customer Experience Initiative for Business.' In trade finance, a recent transaction involved using embedded structured data with partners like Enigio and Cleareye.ai to achieve 100% data extraction accuracy in a digital trade process.

Here is a snapshot of the scale across these key channels as of late 2025:

Channel Metric	Brand/Segment	Value/Amount	Unit/Context
Digitally Active Customers	Lloyds Banking Group plc	23 million	Total
Mobile App Users	Lloyds Banking Group plc	21 million	Total
Digital Share of Retail Sales	Retail Banking	95%	Percentage
Projected Physical Branches (Post-Closures)	Group Network	892	Total Locations
Lloyds Bank Branded Branches (Remaining)	Physical Network	447	Locations
Shared Banking Hubs Operational	Physical Access Alternative	186	Locations (as of Sept 2025)
Workplace Pensions AUA	Scottish Widows	£108 billion	Assets Under Administration
IP&I Division Revenue (2024)	Insurance, Pensions, Investments	£1.16 billion	Annual Revenue
Workplace Pension App Active Users	Scottish Widows	60%	Of 400,000+ users
AI Searches per Month in App	Digital Platform	4 million	LLM Searches

Lloyds Banking Group plc (LYG) - Canvas Business Model: Customer Segments

You're looking at the core groups Lloyds Banking Group plc serves across the UK financial landscape as of late 2025. This bank remains the largest retail and commercial financial services provider in the UK, engaging with approximately 26 million customers.

UK Retail Customers: Mass market for current accounts, savings, and mortgages

This segment forms the backbone of the Group's volume. Digital adoption is near universal, with 95% of the UK online in 2025. Over 23 million people choose digital banking channels, and by 2024, over 20 million customers actively used the Lloyds mobile app. The Group's total lending stood at £471.0 billion at the end of H1 2025, with mortgage balances at £317.9 billion.

Mass-Affluent and Wealth Clients: Individuals with income/assets over £100,000

The Group has a targeted approach here, exemplified by the launch of Lloyds Premier in 2025 for customers with an income of £100k+ or equivalent assets. Prior to this, the Group noted having >2.5 million Mass Affluent customers. The strategic goal is to increase their total relationship balances by over 10% by 2026.

UK Commercial Banking: Small-to-Medium Enterprises (SMEs) and corporate clients

Commercial Banking lending book size was £89 billion in H1 2025, maintaining a gross margin of 2.25%. Commercial deposits showed strong growth, increasing by £5.3 billion in H1 2025. The Group launched a mobile Business Banking loans journey for this segment.

Insurance, Pensions, and Investments Clients (Scottish Widows)

This division shows significant digital traction. As of H1 2025, Scottish Widows had >550k app users, representing a growth of >90% Year-over-Year (YoY). The non-banking segments, which include insurance and pensions, reported a 21% year-on-year increase in underlying profit before impairments in 2025.

First-time home buyers, supported by £8 billion in H1 2025 lending

Lloyds Banking Group is a leading lender to this group. The First Time Buyer Boost scheme, launched in August 2024, saw an additional £4 billion commitment in July 2025, and a further £1 billion commitment in November 2025, taking the total pledged to £9 billion. Over 15,000 first-time buyers have benefited from higher Loan-to-Income underwriting. Effective December 5, 2025, the minimum household income for the FTB Boost was lowered from £50,000 to £40,000.

Here's a quick look at some key metrics across these segments as of H1 2025:

Segment Focus Area	Key Metric/Value	Period/Context
Total Customers Served	26 million	Approximate total
Mass Affluent Customers	>2.5 million	Customer relationships
Mass Affluent Threshold	£100k+ income/assets	Definition for Lloyds Premier
Commercial Banking Lending Book	£89 billion	H1 2025 Size
Scottish Widows App Users	>550k	H1 2025, up >90% YoY
FTB Boost Total Lending Pledged	£9 billion	Total since August 2024
FTB Boost Minimum Income	£40,000	New threshold effective December 5, 2025

Lloyds Banking Group plc (LYG) - Canvas Business Model: Cost Structure

You're looking at the hard numbers driving Lloyds Banking Group plc's expenses as of late 2025. This is where the money is actually going, beyond the headline profit figures.

The Operating Costs for the first nine months of 2025 (YTD) reached £7.2 billion, representing a 3% year-over-year increase. This figure reflects ongoing inflationary pressures and strategic spending, partially offset by efficiency gains.

A major component of the cost base is driven by regulatory and conduct issues. Remediation and litigation charges for the first nine months of 2025 totaled £912 million. This included a significant £800 million provision in Q3 2025 specifically for motor finance commissions.

The drive for efficiency and transformation is also a significant cost center. Lloyds Banking Group plc has committed to a £4 billion digital transformation effort. This is evident in the hiring strategy; for instance, the first half of 2025 saw approximately 1,500 technology and data hires.

Employee compensation and severance costs are being managed through efficiency programs. Operating expenses in the first half of 2025 were up 4% year-over-year, or approximately 2% excluding severance costs, which were front-loaded into the first quarter of 2025. Severance costs specifically mentioned in the Q2 operating costs, following the Q1 front-loading, were around c.£20 million.

Regarding the physical footprint, Lloyds Banking Group plc is actively reducing its presence as part of its efficiency drive. The plan involves cutting 3,000 jobs and 289 branches over this year and next. While a specific maintenance expense figure isn't isolated, the operating lease depreciation component of costs was higher in the first half of 2025 due to fleet growth and other factors.

Here is a summary of the key financial cost data points for the period:

Cost Category/Metric	Financial Amount/Figure	Period/Context
YTD Operating Costs	£7.2 billion	First Nine Months of 2025 (9M 2025)
Total Remediation Charge	£912 million	First Nine Months of 2025 (9M 2025)
Motor Finance Remediation Provision (Q3)	£800 million	Q3 2025
Digital Transformation Investment (Total)	£4 billion	Stated Transformation Goal
Technology & Data Hires	c.1,500	First Half of 2025 (H1 2025)
Branch Reductions Planned	289	Over 2025 and 2026

The cost structure is being actively managed through several levers:

• Managing severance costs related to efficiency programs, with some front-loaded into Q1 2025.
• Investing heavily in technology, including a £4 billion transformation target.
• Reducing the physical footprint via branch closures, aiming for 289 closures over two years.
• Controlling underlying operating costs, which were £2.3 billion in Q3 2025 (down 1% quarter-on-quarter).

Finance: draft 13-week cash view by Friday.

Lloyds Banking Group plc (LYG) - Canvas Business Model: Revenue Streams

The revenue streams for Lloyds Banking Group plc are heavily anchored in its core UK banking franchise, with significant contributions from interest margins and fee-based services, supplemented by strategic hedging activities.

Net Interest Income (NII) remains the primary driver. The guidance for the full fiscal year 2025 for Net Interest Income was set at approximately £13.5 billion. For the first nine months of 2025, underlying Net Interest Income reached £10.1 billion, reflecting a banking net interest margin of 3.04%.

The Group's performance is detailed in the table below, focusing on the nine-month period ending September 30, 2025:

Revenue Component (9M 2025)	Amount (Millions GBP)	Year-on-Year Change
Total Income (Statutory)	14,252	Up 6%
Net Interest Income (Underlying)	10,100	Up 6%
Other Income (Underlying)	4,526	Up 9%
Statutory Profit After Tax	3,322	Down from £3.8 billion in 9M 2024

Non-interest income, which encompasses fees, commissions, and insurance premiums, showed strong momentum. Underlying Other Income for the first nine months of 2025 was £4.5 billion, a 9% increase over the prior year. This growth was supported by strengthening customer activity and strategic initiatives, including performance within UK Motor Finance.

Income from the structural hedge provides a key element of earnings stability. While the requested average rate for Q2 2025 of 2.2% isn't explicitly confirmed in the latest reports, the actual income generated is substantial. For the first half of 2025, structural hedge earnings amounted to £2.6 billion, representing an increase of over 35% year-on-year. The Group expects the structural hedge contribution to be a significant tailwind throughout the year, with the full-year Net Interest Income guidance reflecting this benefit.

Revenue diversification is being pursued through wealth management and investment products. Lloyds Banking Group plc completed the full acquisition of Schroders Personal Wealth, which brings approximately £17 billion in Assets Under Administration (AuA) into the Group, positioning it to scale its wealth offering across mass affluent and workplace clients.

The revenue generation is supported by the underlying strength of the lending book and deposits:

• Underlying loans and advances to customers reached £477.1 billion as of September 30, 2025, up £18.0 billion year-to-date.
• Customer deposits increased by £14.0 billion year-to-date, totaling £496.7 billion.

The overall financial health, as evidenced by the profit metric, is strong despite significant one-off charges. The Statutory Profit After Tax for the first nine months of 2025 was £3.3 billion.