The Best Bank for Colleagues: Making it a reality Angie Risley Group HR Director 26 April 2012

A look back We have integrated the two heritage businesses and are now taking steps to transform our business We have harmonised employment terms & conditions and policies We have needed to make significant role reductions We know that our progress over the past three years could not have been achieved without the huge efforts of our colleagues We continue to operate in very difficult market conditions We know the impact that these changes have had on our colleagues

Becoming the Best Bank for Colleagues We are committed to becoming the Best Bank for Colleagues, by having: 1.A successful business 2.Stable employment 3.Competitive reward and recognition 4.Learning that enables colleagues to do their job well and develop their potential 5.Opportunities for colleagues to maximise their contribution We want to restore people’s trust and confidence in the Bank and make Lloyds Banking Group a place where people are proud of the contribution they make to our customers and communities

A successful business

Stable employment We need the Bank to be efficient and the right size for our chosen markets We need to make more role reductions to get our business to that point We are committed to minimising the impact of these changes on colleagues Detailed workforce planning is in place Redundancy programmes are being managed professionally and underpinned by clear job security commitments and meaningful consultation We will maintain our focus on redeploying ‘at risk’ colleagues

Competitive reward and recognition Our aim is to provide a reward package that recognises individual contribution and reflects the Banks performance The 2012 pay and bonus deal was very competitive We are continually reviewing our bonus and incentive schemes to make sure they reward the right behaviours We are conducting a review of Performance Management We will continue to have schemes like ‘Go for Gold’ that recognise colleagues for living out the Group’s values

Total Reward Pay Recognition Share Plans Benefits Total Reward Incentive Bonus Holiday & flexible working Fulfilling the role Exhibiting our values Shareholder alignment Valuable extras Delivering for customers Achieving objectives Retirement Pension Work/life balance

Learning We need to give all colleagues the support and development to perform effectively in their current roles We also want to help colleagues identify and develop the skills, knowledge and behaviours they need for future roles There are now 13 Academies, providing tailored support to different business areas and covering over 90% of colleagues The transformation of our learning function over the next 18 months will provide colleagues with consistently high-quality material in a more accessible, cost- effective way

Opportunities to contribute We are listening to your views –Colleague Engagement and Pulse surveys –Accord and Unite’s surveys –Meetings with the Executive We are seeking to value and engage our diverse workforce –Career development (eg. Footprints in the Snow) –Colleague diversity networks We are investing in our communities –Our charitable foundations and Matched Giving –Charity of the Year –A Day To Make A Difference

Looking to the future We know we have much to do to make ‘Best Bank for Colleagues’ a reality The Executive is working to make Lloyds Banking Group a place where people are proud to work Accord has a central role to play in representing the views of members Your views are influential and we want to build on and strengthen our dialogue with you Working effectively with Accord and our other unions will be one of the main ways in which we achieve that aim.