HIGHLIGHTS FOR THE THREE MONTHS ENDED 31 MARCH 2017

Strong underlying performance with significant improvement in statutory profit and returns

·     Increase in underlying profit to £2.1 billion with an underlying return on tangible equity of 15.1 per cent

·     Positive operating jaws while credit quality remains strong with asset quality ratio of 12 basis points

·     Statutory profit before tax increased to £1.3 billion; statutory return on tangible equity of 8.8 per cent

·     Strong balance sheet maintained with CET1 ratio of 14.5 per cent (pre dividend accrual)

·     Tangible net assets per share increased to 56.5 pence driven by strong underlying profit

Our differentiated UK focused business model continues to deliver

·     Simple, efficient and low risk business model providing competitive advantage

·     Strong capital generation of 0.7 percentage points

·     UK government shareholding now below 2 per cent

On track to deliver the Group financial targets for 2017 with longer term guidance maintained

·     Net interest margin for the year now expected to be close to 2.80 per cent (pre MBNA)

·     Expect open book mortgage balances to stabilise and then grow to close the year in line with 31 December 2016

·     Asset quality ratio for the year now expected to be inside existing 25 basis points guidance (pre MBNA)

·     Expect 2017 capital generation to be at the top end of the 170-200 basis points ongoing guidance range

·     Continue to target a cost:income ratio of around 45 per cent exiting 2019 with reductions every year

·     Expect to generate a statutory return on tangible equity of between 13.5 and 15.0 per cent in 2019