[6-K] Lloyds Banking Group plc Current Report (Foreign Issuer)

Rhea-AI Filing Summary

Lloyds Banking Group says it is assessing the impact of a recently published FCA consultation on motor finance and that, based on initial analysis, the proposed scheme is likely to require an additional provision that may be material. The company states that uncertainties remain about how the proposals will be interpreted and implemented and that the outcome is subject to further analysis and review. Lloyds commits to updating the market as appropriate.

Insights

Regulatory Specialist

Regulatory proposals may force a materially sized provision once rules are finalised.

The FCA consultation on motor finance proposes changes that could alter borrower remediation or lender responsibilities. Lloyds notes interpretation and implementation uncertainties, which means the final accounting and remediation scope is unclear.

Key dependencies are the final legal text and any implementation timeline from the FCA; until those are clarified, the bank must model potential remediation costs and timing. Monitor updates and any quantified provisions in upcoming reports through Q4 2025 and subsequent disclosures.

Credit & Provisioning Analyst

Initial work indicates an additional provision is likely and could be material to capital and earnings.

An incremental provision reduces reported profit and retained earnings and can affect regulatory capital ratios if sufficiently large. Lloyds' statement that a provision "may be material" signals potential for a non-trivial charge when quantified.

Investors should watch for the Group's next financial update showing the provision amount, timing and capital impact; these will determine whether capital actions or dividend policy adjustments are needed in the near term.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16a

of the Securities Exchange Act of 1934

09 October 2025

LLOYDS BANKING GROUP plc

(Translation of registrant's name into English)

5th Floor

25 Gresham Street

London

EC2V 7HN

United Kingdom

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports

under cover Form 20-F or Form 40-F.

Form 20-F..X..     Form 40-F 

Index to Exhibits

Item

 No. 1 Regulatory News Service Announcement, 09 October 2025

           re: Motor Finance Update

9 October 2025

MOTOR FINANCE UPDATE

As previously noted, the Group continues to consider the impact and implications of the recently published FCA consultation paper on motor finance.  Uncertainties remain outstanding on the interpretation and implementation of the proposals but based on our initial analysis and the characteristics of the proposed scheme, an additional provision is likely to be required which may be material.  This remains subject to ongoing analysis and review of the proposals.  The Group will continue to update the market as and when appropriate.

-END-

For further information:

Investor Relations

Douglas Radcliffe                                                                        +44 (0)20 7356 1571

Group Investor Relations Director

douglas.radcliffe@lloydsbanking.com

Corporate Affairs

Matt Smith                                                                                   +44 (0)77 8835 2487

Head of Media Relations

matt.smith@lloydsbanking.com

FORWARD LOOKING STATEMENTS

This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and section 27A of the US Securities Act of 1933, as amended, with respect to the business, strategy, plans and/or results of Lloyds Banking Group plc together with its subsidiaries (the Group) and its current goals and expectations. Statements that are not historical or current facts, including statements about the Group's or its directors' and/or management's beliefs and expectations, are forward-looking statements.

Words such as, without limitation, 'believes', 'achieves', 'anticipates', 'estimates', 'expects', 'targets', 'should', 'intends', 'aims', 'projects', 'plans', 'potential', 'will', 'would', 'could', 'considered', 'likely', 'may', 'seek', 'estimate', 'probability', 'goal', 'objective', 'deliver', 'endeavour', 'prospects', 'optimistic' and similar expressions or variations on these expressions are intended to identify forward-looking statements. These statements concern or may affect future matters, including but not limited to: projections or expectations of the Group's future financial position, including profit attributable to shareholders, provisions, economic profit, dividends, capital structure, portfolios, net interest margin, capital ratios, liquidity, risk-weighted assets (RWAs), expenditures or any other financial items or ratios; litigation, regulatory and governmental investigations; the Group's future financial performance; the level and extent of future impairments and write-downs; the Group's ESG targets and/or commitments; statements of plans, objectives or goals of the Group or its management and other statements that are not historical fact and statements of assumptions underlying such statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future.

Factors that could cause actual business, strategy, targets, plans and/or results (including but not limited to the payment of dividends) to differ materially from forward-looking statements include, but are not limited to: general economic and business conditions in the UK and internationally (including in relation to tariffs); imposed and threatened tariffs and changes to global trade policies; acts of hostility or terrorism and responses to those acts, or other such events; geopolitical unpredictability; the war between Russia and Ukraine; the escalation of conflicts in the Middle East; the tensions between China and Taiwan; political instability including as a result of any UK general election; market related risks, trends and developments; changes in client and consumer behaviour and demand; exposure to counterparty risk; the ability to access sufficient sources of capital, liquidity and funding when required; changes to the Group's credit ratings; fluctuations in interest rates, inflation, exchange rates, stock markets and currencies; volatility in credit markets; volatility in the price of the Group's securities; natural pandemic and other disasters; risks concerning borrower and counterparty credit quality; risks affecting insurance business and defined benefit pension schemes; changes in laws, regulations, practices and accounting standards or taxation; changes to regulatory capital or liquidity requirements and similar contingencies; the policies and actions of governmental or regulatory authorities or courts together with any resulting impact on the future structure of the Group; risks associated with the Group's compliance with a wide range of laws and regulations; assessment related to resolution planning requirements; risks related to regulatory actions which may be taken in the event of a bank or Group failure; exposure to legal, regulatory or competition proceedings, investigations or complaints; failure to comply with anti-money laundering, counter terrorist financing, anti-bribery and sanctions regulations; failure to prevent or detect any illegal or improper activities; operational risks including risks as a result of the failure of third party suppliers; conduct risk; technological changes and risks to the security of IT and operational infrastructure, systems, data and information resulting from increased threat of cyber and other attacks; technological failure; inadequate or failed internal or external processes or systems; risks relating to ESG matters, such as climate change (and achieving climate change ambitions) and decarbonisation, including the Group's ability along with the government and other stakeholders to measure, manage and mitigate the impacts of climate change effectively, and human rights issues; the impact of competitive conditions; failure to attract, retain and develop high calibre talent; the ability to achieve strategic objectives; the ability to derive cost savings and other benefits including, but without limitation, as a result of any acquisitions, disposals and other strategic transactions; inability to capture accurately the expected value from acquisitions; assumptions and estimates that form the basis of the Group's financial statements; and potential changes in dividend policy. A number of these influences and factors are beyond the Group's control. Please refer to the latest Annual Report on Form 20-F filed by Lloyds Banking Group plc with the US Securities and Exchange Commission (the SEC), which is available on the SEC's website at www.sec.gov, for a discussion of certain factors and risks. Lloyds Banking Group plc may also make or disclose written and/or oral forward-looking statements in other written materials and in oral statements made by the directors, officers or employees of Lloyds Banking Group plc to third parties, including financial analysts. Except as required by any applicable law or regulation, the forward-looking statements contained in this document are made as of today's date, and the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document whether as a result of new information, future events or otherwise. The information, statements and opinions contained in this document do not constitute a public offer under any applicable law or an offer to sell any securities or financial instruments or any advice or recommendation with respect to such securities or financial instruments.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LLOYDS BANKING GROUP plc

 (Registrant)

By: Douglas Radcliffe

Name: Douglas Radcliffe

Title: Group Investor Relations Director

Date: 09 October 2025

FAQ

What did Lloyds (LLDTF) announce about the FCA motor finance consultation?

Lloyds stated that the FCA proposals are under review and that, based on initial analysis, an additional provision is likely and may be material.

Does the announcement specify the size of the provision?

No. The statement says an additional provision is likely and may be material, but the Group has not disclosed any monetary amount.

What uncertainty did Lloyds highlight in the filing?

Lloyds highlighted uncertainties about the interpretation and implementation of the FCA proposals, which affect the final obligation and provision size.

Will Lloyds update investors on this issue?

Yes. The company said it will continue to update the market as and when appropriate.

When was this disclosure made?

The regulatory announcement was dated 09 October 2025.