Helping Britain Prosper now and for the future

Charlie Nunn, Group Chief Executive, talks about how Lloyds Banking Group is delivering against its strategy, and the importance of a vibrant and resilient banking sector in supporting strong communities and the wider economy.

Leading one of the UK’s largest banks means there is rarely time to stand still, but our financial results are a helpful moment to take stock of how we’re delivering on our purpose and strategy – enabling us to become an ever stronger and more intuitive source of support for our customers and communities. 

Following the low growth and persistent inflation of recent years, which has had particular impact on those with lower incomes, small to medium-sized enterprises, and current and aspirational homeowners, the UK needs to grow its way back to economic health and prosperity. This will only be achieved with a strong, innovative and successful financial sector – serving as an effective conduit for investment into our economy, and increasing consumer confidence and financial resilience. 

We at Lloyds Banking Group are pleased to strengthen confidence for our shareholders, with strong capital returns and by maintaining our guidance on the targets set for 2026.  
 

Helping our customers in the moments that matter 

Our purpose is Helping Britain Prosper every day and in life’s key moments – whether finding a first home (supporting around 56,000 first-time buyers in 2023), saving for a deposit, caring for family, investing for retirement, or accessing finance for businesses to diversify and grow.  

Financial resilience also requires longer-term financial planning. At present, 35% of people don’t have enough savings for even the most simple retirement, half of mortgage owners don’t have any life insurance cover, and 9 in 10 people have no critical illness cover.

We are deeply active in communities across the UK, and have a responsibility to help turn this around – equipping people with a greater understanding and control over their finances. In particular, we have continued to respond to pressures on the cost of living – offering support to 7.5 million people who we knew might need it, contacting over 15 million customers who could benefit from better savings options, and giving guidance to 600,000 businesses. 

Supporting a sustainable, inclusive future for people and businesses  

Financial services are critical in enabling the Net Zero transition, which will in turn secure the long-term resilience of our communities, customers and our own sector. We have exceeded our £15 billion target in transition financing for business customers, and are continuing to challenge ourselves with a new target of £30 billion between 2024 and 2026. And following last year’s acquisition of Tusker, we now finance 1 in 8 ultra-low emission vehicles on UK roads – a priority for green transport.  

However, it is clear that parts of our economy are still not able to transition at the speed and scale we need. We are committed to working with Government, industry and civil society in order to accelerate the necessary progress on the pathway to Net Zero.

Greening homes is an important part of that journey and those on the lowest incomes are often paying a high price, if living in poorly-insulated housing.  According to the Centre for Ageing Better, every £1 spent on improving warmth in homes occupied by vulnerable households yields £4 in health benefits. We are providing billions in funding and investment to improve the energy efficiency of the UK’s housing stock – making them warmer, more comfortable and cheaper to run.

And we are the biggest supporters of social housing in the UK with over £17 billion in financing for the sector since 2018 – including £2.7 billion in 2023, of which £1.4 billion was for sustainability-linked builds and retrofit. 

However, there remains a chronic shortfall in good-quality, genuinely affordable homes. This unmet demand is pushing up prices, which is contributing to increased homelessness and risk of homelessness. Many Housing Associations face immense retrofit requirements to rightly improve the energy efficiency and fire safety of existing stock, and so with every year that goes by, the gap in provision continues to widen.

At Lloyds, we’ve joined forces with our charity partner Crisis to campaign for one million more homes at social rent over the next decade, and we need housing policies with the right incentives and investment structures to achieve this.  

Looking forward with optimism 

A strong and healthy economy is underpinned by a strong and healthy financial sector. Increasing investor confidence is a critical part of this equation, as the long-term strength of the UK economy depends on remaining a competitive and attractive destination for inward investment. As the UK’s leading bank for infrastructure and project-finance, providing nearly 10 billion pounds since 2018, we are proud to have supported many of the largest FDI projects in energy, engineering and infrastructure. It is in all our interests for these high-growth sectors to succeed, and to give international investors the confidence and clarity that they need.

UK banks have built strong foundations to withstand the disruption to the global economy, and absorb some of the impacts on homeowners, businesses, and people with different saving and borrowing needs. Our customers remain resilient overall, and we are committed to support their ambitions today and in the long-term. This requires a good balance – enabling innovation and growth in support of customers, while ensuring resilience and confidence in our financial system.

We want to continue building one of the world’s best banking environments, where consumers have easy access to fair, assured and straightforward products and services across a range of competitive providers. A financial sector primed for long-term success can continue anticipating the evolving expectations of our customers, strengthen financial resilience for people and businesses, and drive UK growth, innovation and prosperity now and for the future.