The Best Bank for Colleagues: Making it a reality

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

2. 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

3. Becoming the Best Bank for Colleagues We are committed to becoming the Best Bank for Colleagues, by having: • A successful business • Stable employment • Competitive reward and recognition • Learning that enables colleagues to do their job well and develop their potential • 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

4. Reshaping our portfolio Greater focus Best Bank for Customers, Communities, Colleagues & Shareholders Greater efficiency Simplifying the bank Higher income Investing for growth Strengthening balance sheet Stronger funding A successful business

5. 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

6. 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

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

8. 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

9. 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

10. 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.