Significant business progress with strong start to the Group's latest strategic plan

·    Strong start to the next phase of our strategy with increased strategic investment

·    Achievements during the year include the launch of Open Banking, Single Customer View, Lloyds Bank Corporate Markets, the wealth management partnership with Schroders and enhanced customer propositions

·    The Group will continue to Help Britain Prosper whilst delivering strong and sustainable returns for shareholders

Strong and sustainable financial performance with continued growth in profit and returns

·    Statutory profit after tax of £4.4 billion up 24 per cent with a 6 per cent increase in underlying profit to £8.1 billion

·    Total ordinary dividend of 3.21 pence per share, up 5 per cent on 2017, and a proposed share buyback of up to £1.75 billion representing a total capital return of up to £4.0 billion (2017: £3.2 billion), increase of up to 26 per cent

·    Net income of £17.8 billion, 2 per cent higher, with net interest margin higher at 2.93 per cent

·    Operating costs down on prior year despite increased investment; cost:income ratio further improved to 49.3 per cent with positive jaws of 5 per cent

·    Credit quality remains strong with no deterioration in credit risk; gross asset quality ratio remains stable at 28 basis points, in line with full year 2017 and 2016

·    Return on tangible equity increased to 11.7 per cent and earnings per share of 5.5 pence up 27 per cent

·    Balance sheet strength maintained with capital build of 210 basis points in the year and CET 1 ratio of 13.9 per cent after dividends and share buybacks

·    Tangible net assets per share of 53.0 pence, up 1.3 pence after the payment of dividends in the year

Guidance demonstrates confidence in continued strong performance

·    Continue to expect increased statutory return on tangible equity of 14 to 15 per cent in 2019 with strong underlying profit and lower below the line charges driving statutory profit growth

·    Ongoing capital build of 170 to 200 basis points per annum

·    Net interest margin of c.2.90 per cent in 2019 and, as previously guided, resilient through the plan period

·    Operating costs now expected to be less than £8 billion in 2019; a year ahead of original target, cost:income ratio still expected to fall every year and be in the low 40s exiting 2020 including remediation

·    Net asset quality ratio expected to be less than 30 basis points in 2019 and through the plan period

INCOME STATEMENT − UNDERLYING BASIS

KEY BALANCE SHEET METRICS