APPENDIX

2

LOANS AND ADVANCES TO CUSTOMERS

(1) Before allowance for impairment losses totalling £19.2 billion and fair value adjustments

30 June 2011

LOANS AND ADVANCES TO CUSTOMERS £607BN(1)

Personal mortgages58%

Transport, distribution & hotels6%

Lease financing & hire purchase1%

Agriculture, forestry & fishery1%

Corporate other1%

Manufacturing2%

Construction2%

Personal other5%

Property companies12%

Financial, business & other services12%

3

MORTGAGE PORTFOLIO

MainstreamBuy to let

Specialist

30 June 2011

UK MORTGAGE PORTFOLIO £336.4BN

£260.8bn

£28.4bn

£47.2bn

4

MORTGAGE NEW BUSINESS DISTRIBUTION

NEW BUSINESS

6 months to 31 December 2010 - £15.3bn 6 months to 30 June 2011 - £12.9bn

Homemovers£6.0bn

Remortgages£2.7bn

Furtheradvances

£1.4bn

First time buyers£3.0bn Homemovers

£4.4bn

Remortgages£2.8bn

Further advances

£1.2bn

First time buyers£2.5bn

Buy tolet

£2.2bn

Buy tolet

£2.0bn

39%

18%9%

14%

20%34%

22%9%

16%

19%

5

MORTGAGE PORTFOLIO LTVs

New business LTVs

Indexed by value at 30 June 2011Specialist lending is closed to new business

Average LTVs

>100% LTV

Value >100% LTV

Buy to let

66.1%

74.5%

16.4%

£7.8bn

Group

61.3%

55.6%

12.2%

£41.0bn

Specialist

n/a

72.6%

19.4%

£5.5bn

Mainstream

60.4%

51.9%

10.6%

£27.7bn

≤80% LTV 48.3% 58.6%41.0%62.5%

>80–90% LTV 17.5% 16.2%20.4%15.5%

>90–100% LTV 17.8% 13.0%19.2%11.4%

6

£5.7bn (19.4%)

£8.6bn (18.5%)

>100%LTV

£30.7bn (11.6%)

UK MORTGAGE PORTFOLIOBooks performing satisfactorily with stable profiles

Specialist

Mainstream

Buy to let

30 June 2011 31 Dec 2010

Portfolio£336.4bn

£28.4bn (8.4%)

£47.2bn (14.0%)

£260.8bn (77.6%)

£5.5bn (19.4%)

£7.8bn (16.4%)

>100%LTV

£27.7bn (10.6%)

£0.6bn (1.3%)

£1.7bn (0.7%)

£0.8bn (2.8%)

>100%LTV

and >3 monthsin arrears

£3.1bn (0.9%)

£0.6bn (1.3%)

£1.8bn (0.7%)

£0.8bn (2.7%)

>100%LTV

and >3 monthsin arrears

£3.2bn (0.9%)£41bn (12.2%) £45bn (13.2%)

7

UK MORTGAGE PORTFOLIO IMPAIRMENT COVERAGE

Loans and advancesto customers (gross)

Impairment provisionsas % of impaired loans

Impaired loans

Impaired loans as %of closing advances

Impairment provisions

£341.1bn

23.5%

£6.8bn

2.0%

£1.6bn

H2 2010

£344.2bn

22.8%

£6.9bn

2.0%

£1.6bn

H1 2010 UK MORTGAGES

£336.4bn

25.3%

£6.7bn

2.0%

£1.7bn

H1 2011

8

MORTGAGE ARREARS TRENDS

% of total cases >3 months in arrears

Market2.09%(2)

(1) Source: Council of Mortgage Lenders (CML) (2) CML Q1 11Note: chart shows mortgages >3 months in arrears excluding possessions stock as a proportion of total cases

CML total market (1) Buy to LetSpecialistMainstream

The recent increase in Specialist arrears comes from the 2008 vintage as this book reaches maturity. We expect the trend to flatten out over the next 6 months. This book has been closed to new business since 2009.

0%

1%

2%

3%

4%

5%

6%

7%

8%

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

9

TREND IN MORTGAGE PORTFOLIO ARREARS

Volume ‘000s

CUSTOMERS NEW TO ARREARS

116

H2 09

121

H1 10 H2 10

119 117

H1 11

125

H1 09

The information has been restated to reflect all payments made by customers in the month

10

MORTGAGE PORTFOLIO – PROPERTIES IN REPOSSESSION

(1) Council of Mortgage Lenders Q1 2011 (2) Lloyds Banking Group Q2 2011

NEW REPOSSESSIONS(% of total mortgage cases)

PROPERTIES IN REPOSSESSION(% of total mortgage cases)

30 June2011

LloydsBanking Group(2)

0.06%

CMLaverage(1)

0.08%

31 March2011

30 June2011

0.10%

CMLaverage(1)

0.12%

31 March2011

LloydsBanking Group(2)

11

MORTGAGE PORTFOLIO – PROPERTIES IN REPOSSESSION

% of mortgage cases

PROPERTIES IN REPOSSESSION

(1) Council of Mortgage Lenders Q1 2011

Lloyds Banking Group %

H1 08 H2 08 H1 09 H2 09 H1 10 H2 10 H1 11

0.16%

0.12%

0.08%

0.04%

CML % (1)

0.20%

12

MORTGAGE PORTFOLIO – NEW POSSESSIONS

(1) Source: Council of Mortgage Lenders Q1 2011 (2) Lloyds Banking Group Q2 2011 (3) Source: Council of Mortgage Lenders Q2 2010 (4) Lloyds Banking Group Q2 2010

LloydsBanking Group(2)

0.06%

CML(1)

0.08%

% of total cases

NEW POSSESSIONS

LloydsBankingGroup(4)

CML(3)

0.07%0.08%

30 June2011

31 March2011

30 June2010

30 June2010

13

UNSECURED LENDING PORTFOLIO

Cards Loans

Impairment charge as a % of average lending 6.7% 5.3%

Credit cards

Loans

Personal CurrentAccounts

30 June 2011

UNSECURED PORTFOLIO £26.0BN

£2.6bn

£10.5bn

£12.9bn

14

UNSECURED LENDING PORTFOLIO

£m UNSECURED IMPAIRED LOANS

LoansCardsCurrent Accounts

2,6952,981

3,6033,819

Jun 11Dec 09 Jun 10 Dec 10

15

LOANS AND ADVANCES TO CORPORATE CUSTOMERS

Property companies32%

Lease financingand hire purchase

7%

Manufacturing5%

Corporate Other2%

Agriculture, forestry and fishing

3%

Construction4%

Transport, distribution and hotels

15%

Financial, business and other services

32%(1) Before allowance for impairment losses and fair value adjustments

30 June 2011

LOANS AND ADVANCES TO CORPORATE CUSTOMERS £220.9BN(1)

16

COMMERCIAL/RESIDENTIAL PROPERTY & HOUSEBUILDER LENDING

£78.9bn(1)

(1) Gross (pre FV adjustment and impairment). Includes full recognition of Joint Ventures.(2) Includes lending to non UK residents, and excludes residential mortgages

£53.2bn £25.7bn

Lloyds Banking Group UK

Lloyds Banking Group Overseas(2)

67% 33%

17

UK COMMERCIAL/RESIDENTIAL PROPERTY & HOUSEBUILDER LENDING

Commercial Property(£32.1bn)

£53.2bn(1)

Residential Property(£17.8bn)

Housebuilders(£3.3bn)

Through the cycle policy, supporting predominantly existing customer franchise

Some concentration seen in South East and London, although well spread across remaining UK

Portfolio heavily weighted toward investment over development

Key development origination criteria:

51% Housing Associations (local authority cash flows)

Larger residential property companies

LTSB heritage exposure mainly to the national housebuilders

HBOS previously focused on regional housebuildersLower of 60% of gross

development value or 65% project costs

Min 100% cover from pre-lets

Avoid pure speculative development

(1) Gross (pre FV adjustment and impairment). Includes full recognition of Joint Ventures

Commercial

Residential

Housebuilders

34%60%

6%

18

Recent reduction reflects strategic focus

Excluding Social Housing (local authority cash flows) and Business Support managed assets, mainstream exposure totalled £27bn at the end of June. This comprises:

Our Real Estate credit risk appetite remains aligned to the heritage LTSB approach

UK COMMERCIAL/RESIDENTIAL PROPERTY & HOUSEBUILDER LENDING(1)

(1) Gross (pre FV adjustment and impairment). 31 Dec 2010 has been restated to reflect full recognition of Joint Ventures(2) Majority of Business Support Unit lending is non-core

£bn

57.6

31 Dec 2010

17.0(2)

BusinessSupport

Unit

9.2

Social Housing

c60% originated by heritage LTSBc£1bn of housebuilderlending, with reliance on strong corporate covenants. c£6bn of residential property lending c£20bn of commercial property with a bias towards investment over development

27.0

Mainstream

Non-corec33%

Corec67%

53.2

30 June 2011

Non-corec45%

Corec55%

19

OVERSEAS PROPERTY LENDING

£25.7bn(1)

Ireland(£11.9bn)

Australia(£5.0bn)

55% Property investment, of which 83% is impaired

45% Property development, of which 99% is impaired

Europe, North America & Other(£8.8bn)

45% Property investment, of which 76% is impaired

55% Property development, of which 73% is impaired

Select disposals being made at or near book value

Split non-UK Residents £8.0bn (concentration in Europe) and North America £0.8bn

£2.6bn of non-UK residents exposure relates to Wholesale Europe (WE) business

Ireland

Australia

Europe, North America & Other

47%

20%

33%

(1) Includes lending to non UK residents and excludes residential mortgages. Gross (pre FV adjustment and impairment)

20

LEVERAGED FINANCE LENDING

Key product is cash flow lending. The business originates, executes and portfolio manages deals

Portfolio exposure has reduced by c£1.7bn in H1 2011 with new business offset by asset repayments and sales

A highly selective origination strategy

Predominantly UK focused

Underwriting criteria same as for held assets

Assets monitored closely, with c£5.3bn of the portfolio considered substandard/impaired

Lloyds Acquisition Finance £9.9bn

£12.3bn

Lloyds International £2.4bn

Gross drawn exposure has reduced by £0.5bn in H1 2011

Well spread by industry sector

95% of country risk in portfolio is Australia or New Zealand, with remainder relating to Asia

£0.5bn is impaired (20%)80%20%

Lloyds Banking Group Acquisition Finance

Lloyds Banking Group International

21

RISK CAPITAL PORTFOLIO AT CARRY VALUE(1)

(1) Excludes undrawn commitments of c£1.1bn (as at 31 December 2010 c£1.4bn)(2) Excludes £30m of Joint Ventures managed by BoS USA and £0.1bn carry value of Risk Capital held by W&I Division

Lloyds Development Capital (£1.5bn)

£4.2bn(2)

Ongoing direct equity business being managed for growth LDC continues to be profitablePortfolio is highly diversified by sector, UK geography and, through investing consistently through the cycle, by vintage year Portfolio consists of c85 investments, average value of investment is c£17m

Joint Ventures (£0.15bn)

Asset backed investments, principal sectors: Real Estate (UK & Europe), Hotels and housebuilders

Project Finance (£0.3bn)

Portfolio of high-quality, predominantly operational, PFI/PPP assets largely based in the UKPrimarily availability driven these investments are structured with the objective of providing long-term, secure cash flows

Business Support Unit (£0.09bn)

A portfolio of equity positions resulting from restructuring activity across Wholesale and other legacy assets

MANAGE FOR GROWTH

MANAGE FOR RECOVERY

MANAGE FOR VALUE

3%

52%

36%7%

2%

Funds Investment

Joint Ventures

Business Support Unit

Project Finance

Lloyds Development Capital

Fund Investments (£2.2bn)

Generally, Limited Partner Investments in private equity funds; well diversified underlying exposure principally in UK and Europe

Includes a direct investment portfolio of private equity deals

Fund Investments now manage the small US Fund book (£45m). The legal ownership of these assets remains with the US entities

22

30 June 2011Loans and

advances (£bn)Total(£bn)

Fair Value through P&L (£bn)

Availablefor sale (£bn)

Asset Backed Securities 14.8 4.9 0.4 20.1

Covered bonds - 3.2 - 3.2

Bank / Financial Institution Fixed and Floating Rate Notes 0.2 3.9 0.8 4.9

Bank Certificate of Deposits - 0.5 4.3 4.8

Other 0.2 0.2 4.9 5.3

Total 15.2 14.9 10.8 40.9

TREASURY DEBT SECURITIES PORTFOLIO

Treasury Bills and other bills - 2.2 0.4 2.6

23

ASSET BACKED SECURITIES PORTFOLIO

8020.1Total ABS940.2Negative basis8019.9Total uncovered ABS710.7Other ABS924.2Student loans

931.1850.4Personal loans-970.4Credit Cards-

1000.3Auto loans-Personal sector

852.3440.1Other-932.0CLO-580.2Commercial Real Estate-

--Corporate-Collateralised Debt Obligations

7511.6872.3CMBS-925.2Non-US RMBS-574.1US RMBS-

Mortgage Backed Securities

30 June 2011(%)30 June 2011 (£bn)Carry Value as atNet exposure

24

H1 2010 H1 2011

INSURANCEContinued focus on value over volume

LP&I UK – Sales down but EEV margin up

3.5%

4.2%

(9)%

H1 2010 H1 2011

LP&I UK – New business capital(1) stable

1.9%

H1 2010 H1 2011

LP&I UK – Increased new business profit

27%

H1 2010 H1 2011

GI – Combined ratio improved

(4)%

1.9%

£132m

£168m77% 73%

(1) Capital employed as a percentage of sales

25

IMPAIRMENT LOSSES ON LOANS AND ADVANCES TO CUSTOMERS

Total 5,3696,499

Retail 1,173 0.650.721,335

– Unsecured

– Secured (mortgages)

878

295

6.46

0.18

8.27

0.03

1,282

53

% of average lendingImpairment

H1 2011£m H1 2011

H1 2010£m

Wholesale 1,509 2.023.112,748

Wealth and International 2,528 7.896.562,227

H1 2010

Commercial 159 1.071.28189

26

IMPAIRED ASSET RATIOS – GROUP

Loans and advancesto customers (gross)

Impairment provisionsas % of impaired loans

Impaired loans

Impaired loans as %of closing advances

Impairment provisions

£144bn

44%

£29bn

20%

£13bn

Wholesale

£620bn(1)

45%

£65bn

11%

£30bn

Group

£362bn

32%

£9bn

3%

£3bn

Retail

£64bn

54%

£24bn

37%

£13bn

Wealth & Int’lH1 2011

£30bn

31%

£3bn

10%

£1bn

Commercial

(1) Includes £20bn of hedging and other items

27

IRISH PORTFOLIOCoverage level increased due to economic uncertainties

Weakness in Irish economy continues

Reflecting actual and anticipated further falls in the commercial real estate market

Low levels of redemptions and recoveries due to severe lack of liquidity

Portfolio of £27.6bn (€30.5bn)

Wind down managed by dedicated UK based Business Support Unit credit team

H1/09 H2/09 H1/10 H2/10

IMPAIRED/UNIMPAIRED ASSETS

14%33%

44% 53%

37%42%

54%

40%

59%

56% 56%

Q1/11 (IMS)

H1/11

Unimpaired

Impaired

Coverage ratio64%

28

IRISH PORTFOLIOLimited portfolio reductions (local currency basis), with increased provisioning

31 Dec 2010Portfolio size: £27.5bn (€31.8bn)

30 Jun 2011Portfolio size: £27.6bn (€30.5bn)

Loanbook

Impairedloan

balance

Impairmentprovision

Loanbook

Impairedloan

balance

Impairmentprovision

Commercial Real Estate RetailCorporate & Other

PORTFOLIO BREAKDOWN

7.7

11.7

0.9

4.3

9.2

0.6

2.4

8.1

7.9

4.8

11.9

1.2

7.85.6

10.8

0.9

3.0

5.9

£bn 27.5 14.4 7.8 27.6 17.6 9.8£bn

29

Pricing of new business and repricing of existing book

Sharing of base rate rises benefit

Reduced wholesale funding issuance allows greater control over costs going forward

Improved funding position provides greater flexibility over mix of funding sources

Base rate lower for longer

Wholesale funding costs remain higher for longer

Competition for deposits

Increasing regulatory liquidity requirements

PERFORMANCE DRIVERS – NET INTEREST MARGINTrends continue to be dominated by external factors

INTERNAL(‘Inside’ Management Control)

EXTERNAL(‘Outside’ Management Control)

Group NIM 215 – 230bps based on business and macro assumptionsCore business NIM will exceed Group margin

2014

NIM expected to be >200bps based on current assumptions2011

30

FAIR VALUE UNWIND

£bn

Further fair value unwind expected

2011

c2.7 (1)

2012

c0.5

(1) £1.7bn relates to actual fair value unwind in H1 2011

2013

c0.5

2014

(c0.5)

2015

(c0.3)

31

NET TANGIBLE ASSETS

NET TANGIBLE ASSETS (£bn)

31 Dec2010

40.3

H12011

Earningsimpact

(2.3)

1.3

Other 30 June2011

39.3

NET TANGIBLE ASSETS PER SHARE (p)

31 Dec2010

59.2

Shareissues

(0.6)

H12011

Earningsimpact

(3.4)

2.0

Other 30 June2011

57.2

32

30 June2011£bn

22Bank deposits(1)

47Certificates of deposit

87Medium-term notes

39Covered bonds

27Commercial paper

37Securitisation

37Subordinated debt

Wholesale (excl. customer deposits) 296

31 Dec2010

26

42

88

32

33

39

38

298

REDUCING OUR WHOLESALE FUNDING REQUIREMENTSMaintaining broad spread of wholesale funding

395Customer deposits(1)

691Total Group funding

383

681

Clear benefit delivered by managing balance sheet down

Good relationship customer deposit growth of £12.0bn

Primary liquid asset holding of £100.9bn

Increasing strength of funding position has facilitated an accelerated pay down of central bank funding

(1) Excluding repos

33

SUCCESSFUL TERM ISSUANCE - £25bn ACHIEVED IN H1 2011Utilising a wide variety of funding products and sources

Diverse range of funding products and sources

c£18bn of public term issuance and c£7bn of private placements completed in the first half of 2011

Additional aggregate of £5 – £10bn of public and private issuance for the rest of 2011

Expected public term issuance of c£15 – 20 billion per annum over next 2 years

TERM ISSUANCE H1 2011 PUBLIC TERM ISSUANCE BY CURRENCY

H1 2011 PUBLIC TERM ISSUANCE BY PRODUCT

GBP

Other

EURO

USDMTN

Securitisations

CoveredBonds

52%

29%

19%

15%

15%

35%

35%

34

January 2013Basel 3-0.6% c£30bn

RWA increase largely from credit valuation adjustment, securitisation and insurance allowances(1)

December 2011Basel 2.5-0.2% c£10bn

RWA increase primarily from Market Risk in the trading book

2014 - 2018

Any residual deferred tax losses

Insurance deduction (-0.2%pa)Other transitional adjustments (-0.2%pa) Largely excess expected loss

Transitional rules

IMPLEMENTATION

OngoingNon-core run down and disposals

RWA Benefit

From disposal date (by November 2013)Verde RWA Benefit

CAPITAL: BASEL 2.5 / 3.0 IMPACTMaintaining modest but prudent capital reserves over regulatory requirements

(1) Securitisation partially offset by removal of core tier 1 deduction

TARGET CORE TIER 1 CAPITAL RATIO PRUDENTLY IN EXCESS OF 10% FROM 1 JANUARY 2013 WHEN TRANSITION TO BASEL 3 COMMENCES

35

VERDE PROFILEThe Verde disposal continues to progress at pace

c£0.5bnPBT

c£32bnLiabilities

c£64bnAssets

c£16bnRWAs

c£0.2bnImpairment

c£0.5bnExpenses

c£1.2bnIncome

Verde disposal process accelerated

The business is the seventh largest bank in the UK

Information Memorandum now issued to prospective buyers

Initial bids now being reviewed

Expect to identify purchaser by the end of 2011

Total implementation costs will vary depending upon the nature of the buyer but could be up to £1bn

FINANCIALS: INDICATIVE IMPACT OF VERDE DISPOSAL

(2011 illustration) on Lloyds Banking Group financials

based on EU term sheet agreement

36

FORWARD LOOKING STATEMENTS AND BASIS OF PRESENTATION

FORWARD LOOKING STATEMENTSThis announcement contains forward looking statements with respect to the business, strategy and plans of the Lloyds Banking Group, its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about the Group or the Group’s management’s beliefs and expectations, are forward looking statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. The Group’s actual future business, strategy, plans and/or results may differ materially from those expressed or implied in these forward looking statements as a result of a variety of risks, uncertainties and other factors, including, without limitation, UK domestic and global economic and business conditions; the ability to derive cost savings and other benefits, as well as the ability to integrate successfully the acquisition of HBOS; the ability to access sufficient funding to meet the Group’s liquidity needs; changes to the Group’s credit ratings; risks concerning borrower or counterparty credit quality; instability in the global financial markets; changing demographic and market related trends; changes in customer preferences; changes to regulation, accounting standards or taxation, including changes to regulatory capital or liquidity requirements; the policies and actions ofgovernmental or regulatory authorities in the UK, the European Union, or jurisdictions outside the UK, including other European countries and the US; the ability to attract and retain senior management and other employees; requirements or limitations imposed on the Group as a result of HM Treasury’s investment in the Group; the ability to complete satisfactorily the disposal of certain assets as part of the Group’s EU state aid obligations; the extent of any future impairment charges or write-downs caused by depressed asset valuations; exposure to regulatory scrutiny, legal proceedings or complaints, actions of competitors and other factors. Please refer to the latest Annual Report on Form 20-F filed with the US Securities and Exchange Commission for a discussion of such factors together with examples of forward looking statements. The forward looking statements contained in this announcement aremade as at the date of this announcement, and the Group undertakes no obligation to update any of its forward looking statements.

BASIS OF PRESENTATIONThe results of the Group and its business are presented in this presentation on a combined businesses basis and include certain income statement, balance sheet and regulatory capital analysis between core and non-core portfolios to enable a better understanding of the Group’s core business trends and outlook. Please refer to the Basis of Presentation in the 2011 Half-Year Results News Release which sets out the principles adopted in the preparation of the combined businesses basis of reporting as well as certain factors and methodologies regarding the allocation of income, expenses, assets and liabilities in respect of the Group's core and non-core portfolios.