Building our business

Annual Review

2005

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Deepening customer relationshipsImproving customer serviceImproving processing efficiencyDelivering earnings momentum

We are building our business by…

2 LLOYDS TSB GROUP

0

74

Profitbefore tax£m*

Income andcost growth2005*

Economicprofit£m*

Returnon equity*

Customerserviceindex

Employeeengagementindex

Inco

me

Cost

s

2004

2005

2004

2005

2004

2005

2004

2005

2004

2005

+7%

+4%

3,4323,726

1,4171,620

22.2%23.3% 65.0% 66.6%

6974+9%

Statutoryprofit beforetax £m

2004

2005

3,4773,820

+10% +14%

* Comparable basis – excluding impact of volatility, other IFRS adjustments applied from 1 January 2005 and discontinued operations. Also excludes provisions for customer redress and the strengthening of reserves for mortality.

RF62376 pp01-pp06_TP tp 15/3/06 08:52 Page 2

LLOYDS TSB GROUP 3

The businesses of Lloyds TSBThe Group

Final dividendA final dividend of 23.5p per share will bepaid on 3 May 2006. This makes a totaldividend for 2005 of 34.2p (2004: 34.2p).

Presentation of informationWith effect from 1 January 2005 the Groupimplemented International Financial ReportingStandards (IFRS). The 2004 comparativefinancial information reflects the adoption ofthose IFRS standards which are required to beapplied retrospectively, but does not includethe additional impacts arising from first timeapplication of those standards that the Groupimplemented with effect from 1 January2005. Further information on the impact of implementing IFRS on comparativeinformation is published in the Group’s 2005 Annual Report and Accounts.

The impact of IFRS, and in particular theincreased use of fair values, has resulted ingreater earnings volatility. In order to provide amore comparable representation of businessperformance this volatility has been separatelyanalysed for the Group’s insurance andbanking businesses. In addition, other IFRSrelated adjustments applied with effect from1 January 2005, for which comparatives arenot required to be restated, the profit (loss) onsale and closure of businesses and the impacton the Group’s results of businesses sold in2004 have been separately analysed in theGroup’s results. A reconciliation of this‘comparable’ basis of presentation to thestatutory profit before tax is shown on this page.

This annual review, including the summary financialstatement contained within pages 10 to 13, does notprovide sufficient information to allow as full anunderstanding of the results and state of affairs of LloydsTSB Group as would be provided by the full report andaccounts. Shareholders who would like more detailedinformation may obtain a copy of the full report andaccounts, free of charge, by completing the request formwhich accompanies this review.

Profit before taxBy division

2005 2004£ million £ million

UK Retail Banking

– Before provisions for customer redress 1,681 1,739

– Provisions for customer redress (150) (100)

1,531 1,639

Insurance and Investments

– Before provisions for customer redress and

strengthening of reserves for mortality 908 790

– Provisions for customer redress – (12)

– Strengthening of reserves for mortality (110) –

798 778

Wholesale and International Banking 1,504 1,253

Central group items (367) (350)

Profit before tax – comparable basis 3,466 3,320

Volatility* 625 138

Other IFRS adjustments applied from 1 January 2005**

– Before strengthening of reserves for mortality (276) –

– Strengthening of reserves for mortality (45) –

(321) –

Profit (loss) on sale and closure of businesses† 50 (21)

Trading results of discontinued operations in 2004†† – 40

Profit before tax 3,820 3,477

Earnings per share 44.6p 42.8p

* Volatility relates to Insurance and Investments (2005: £749 million, 2004: £138 million) and Central group items (2005:£(124) million, 2004: nil).

** Other IFRS adjustments applied from 1 January 2005 relate to UK Retail Banking (£(213) million), Insurance and Investments(£(73) million), Wholesale and International Banking (£20 million) and Central group items (£(55) million).

† Profit (loss) on sale and closure of businesses relates to UK Retail Banking (2005: £76 million, 2004: nil), Wholesale and InternationalBanking (2005: £(6) million, 2004: £(21) million) and Central group items (2005: £(20) million, 2004: nil).

†† Trading results of discontinued operations in 2004 relates to Wholesale and International Banking.

Lloyds TSB is a leading UK-based financialservices group whose businesses provide acomprehensive range of banking and financialservices in the UK and overseas. At the end of2005 total group assets were £310 billionand there were some 67,000 employees.Market capitalisation was £27 billion.

The main businesses and activities of theGroup during 2005 were:

UK Retail Banking

Provides a full range of banking and financialservices to some 15 million personalcustomers through over 2,100 branchesthroughout the UK, as well as telephone andinternet banking services. Cheltenham &Gloucester (C&G) is the Group’s specialist

residential mortgage provider, selling itsproducts through branches of C&G andLloyds TSB Bank in England and Wales, aswell as through the telephone, internet andpostal service, C&G TeleDirect. The Group isone of the largest mortgage lenders in the UK,with a market share of 9.1 per cent. Profitbefore tax from UK Retail Banking was£1,531 million.

Insurance and Investments

Scottish Widows is the Group’s specialistprovider of life assurance, pensions andinvestment products, distributed through theLloyds TSB branch network, throughindependent financial advisers and directly viathe telephone and the internet. Insurance and

Investments also includes general insuranceunderwriting and broking, and fundmanagement. Profit before tax from Insuranceand Investments was £798 million.

Wholesale and International Banking

Provides banking and related services formajor UK and multinational corporates andfinancial institutions, and small and medium-sized UK businesses. It also provides assetfinance and share registration services topersonal and corporate customers, managesLloyds TSB Group’s activities in financialmarkets through its treasury function andprovides banking and financial servicesoverseas. Profit before tax from Wholesale andInternational Banking was £1,504 million.

RF62376 pp01-pp06_TP tp 15/3/06 08:52 Page 3

Chairman’s statement

4 LLOYDS TSB GROUP

2005 was a successful year for the Lloyds TSBGroup, as we continue to build our businessand deliver good earnings momentum. Eachdivision has again delivered revenue growth inexcess of cost growth, costs have remainedfirmly under control and overall credit qualityhas remained satisfactory. Above all the Grouphas made substantial progress in the executionof its organic growth strategy focused onimproving and deepening relationships with ourpersonal and business customers.

Over the last two years the changes that havebeen introduced by the Group’s newmanagement team have addressed thesignificant external challenges of competitionand regulation and have substantiallyimproved the outlook for the Group. There isplenty of scope for organic growth in ourchosen markets and our aim is to attract moreof the business that our customers have withother financial services companies. We wantto be the most successful company in the UKfinancial services industry.

I am proud of what this Group has achievedin a very short space of time; wherever I goin the business we are making substantialprogress.

In Retail Banking we are clearly focused onensuring that we earn the right to meet100 per cent of our customers’ financialservices needs. Customer satisfaction standardscontinue to improve and are at a higher levelthan at any time in recent years. This reflectsseveral years of hard work during which all staffhave focused their full attention on providinghigh levels of service to our customers.

In Insurance and Investments we are, after a number of challenging years, starting tomake significant progress in distributingbancassurance products through the branchnetwork, as well as building on our existingstrength through independent financialadvisers. We have achieved higher levels ofnew business profitability and have improvedour market share of new business.

In Wholesale and International Banking wehave streamlined our international portfolio ofbusinesses to focus on leveraging our strongcustomer relationships with business andcorporate customers. As a result we havedelivered excellent levels of profit growth andmade great progress in delivering our strategy tobuild an integrated wholesale bank.

Whilst we have made considerable progress,we are not resting on our laurels. We know wehave to continue to produce good levels ofearnings growth and strong results. Goingforward, the main thrust of our strategy will becontinuing to invest in our businesses todeliver revenue growth through gainingnew customers, deepening our relationshipwith customers, and leveraging the strength ofour brands and our multi-channel distributioncapability, whilst at the same time continuingto improve the products and services that weoffer to our customers. In addition we will

further improve our processing efficiency andseek to reduce day-to-day operating costs.

By focusing on this clearly articulated strategyI believe the Group can continue to deliver astrong return on equity together with goodlevels of economic profit growth. Over the lastfew years we have substantially improved thequality of the Group’s earnings and havere-established satisfactory levels of earningsgrowth. As a result, during 2005 we delivereda total shareholder return (share priceappreciation plus dividends) of 10.9 per cent.

Economic outlook

Whilst the economic outlook for the UKremains dependent on events that unfold in theglobal economy, we expect economic growth toincrease slightly in 2006 to just over 2 percent. Interest rate changes are expected toremain modest. Consumer spending, whichwas the major factor behind the economicslowdown in the UK in 2005, is showing somesigns of recovery, although we expect only amodest recovery during 2006. The mortgagemarket should remain reasonably healthy,although personal borrowers are expected tocontinue to cut back on unsecured borrowing.

The regulatory burden upon the UK financialservices industry continues to be a majorconcern. The adoption of InternationalFinancial Reporting Standards, compliancewith Sarbanes-Oxley and preparations for theintroduction of the Basel capital adequacyregime have all been time consuming andexpensive. We welcome signs that notice is atlast being taken of the extent of this regulatoryburden. We shall, however, wait to seewhether de-regulation initiatives, announcedby both the UK Government and the EuropeanCommission, have any material impact uponthe significant burden faced by the industry.The UK financial services industry is one ofthe great success stories of the last 20 yearsand great care must be taken to ensure thatthe conditions remain in place for this successstory to continue.

Capital and dividend

During 2005 Lloyds TSB has continued tomaintain robust capital ratios and remainsone of the very few banks in the world with an‘Aaa’ long-term debt rating from Moody’s, thecredit rating agency. In addition, ScottishWidows remains one of the strongestcapitalised life assurance companies in theUK, and the repatriation of £1 billion ofsurplus capital from Scottish Widows to theGroup during 2005 shows the significantimprovements that have been made in thecapital management of Scottish Widows overthe last few years.

The board has decided to maintain the finaldividend at 23.5p per share, making a totalfor the year of 34.2p (2004: 34.2p). Thisrepresents a yield of 7.0 per cent calculatedusing the 31 December 2005 share price of 488.5p.

Community

Lloyds TSB remains one of the UK’s largestcorporate givers, principally through theexcellent work of the Lloyds TSBFoundations who made grants to charities ofover £30 million in 2005.

Staff

The Lloyds TSB Group is all about people andin my five and a half years as chairman I haveenjoyed meeting so many of them.Throughout our businesses, our employeesare the Group’s ambassadors – I am extremelyproud of them all and am truly grateful for their continuing efforts, without which the Group could not have made suchconsiderable recent progress. We are a servicecompany and I am certain that improvedlevels of customer service will lead toimproved sales performance.

Board changes

Since the 2005 annual general meeting, wehave welcomed three directors to the board.Terri Dial was appointed as Group ExecutiveDirector, UK Retail Banking in June andJan du Plessis and Lord Leitch joined us as independent non-executive directors in October.

As previously announced, I shall be retiring aschairman at the annual general meeting inMay and I am delighted that Sir Victor Blankwill be succeeding me. He will join the boardin March as Deputy Chairman. The boardcarefully considered the provisions of thecombined code on corporate governancewhen nominating Sir Victor as my successor.

Outlook

We are making good progress in meeting ourcorporate objectives of achieving sustainableearnings growth, strong cost control, highlevels of customer and staff satisfaction,satisfactory asset quality and balance sheetefficiency and strength. As the board looks tothe future, the increasing momentum in ourbusinesses, supported by new revenue growthand cost control initiatives, gives usconfidence that Lloyds TSB can achieve itsobjective of being the leading financialservices company in the UK.

I have thoroughly enjoyed my time in thebanking industry. I know that Lloyds TSB is ingreat hands and I wish my colleagues all thevery best for the future.

Maarten van den BerghChairman23 February 2006

RF62376 pp01-pp06_TP tp 15/3/06 08:52 Page 4

In Retail Banking we will earn the right to meet100% of our customers’ financial services needs

Inco

me

Cost

s

2004

2005

2004

2005

+4%

+1%

66.3 71.080.1

173

88.4

+7% +10%

2004

2005

222

+28%

Customerdeposits£bn*

Income andcost growth2005*

Groupmortgagebalances£bn*

Targetcustomerrecruitment000s

* Comparable basis – excluding impact of volatility, other IFRS adjustments applied from 1 January 2005 and discontinued operations. Also excludes provisions for customer redress.

LLOYDS TSB GROUP 5

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In Insurance and Investments our focus is onprofitability and returns, combined with strongnew business sales

6 LLOYDS TSB GROUP

Estimatedmarket share of life, pensions and investments

Income andcost growth2005*

Newbusinessmargin

New businesscontribution£m

Inco

me

Cost

s

2004

2005

2005

+11%

+5%188

224

2004

28.6% 29.7%

2004

2005

5.7%6.2% +19%

* Comparable basis – excluding impact of volatility, other IFRS adjustments applied from 1 January 2005 and discontinued operations. Also excludes provisions for customer redress and the strengthening of reserves for mortality.

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Group chief executive’s review

LLOYDS TSB GROUP 7

2005 was a good year for the Group, both interms of our financial performance and, asimportantly, in making further progress in thedevelopment of our organic growth strategy.

On the financial side, we increased ouralready high return on equity and we delivereda total return of 10.9 per cent to ourshareholders. We grew the trading surplus ineach division as the rate of growth in incomeexceeded that of costs and we achieved goodoverall earnings growth in the face of a slowereconomic environment.

In terms of delivering the Group strategy, wehave established better sales momentum andstronger levels of customer acquisition in ourbanking businesses and delivered good salesgrowth in our life assurance business over thecourse of the year. Our market shares areeither stable, or growing, in most of our keyproduct lines. Most importantly, our customerrelationship programmes are being effectivelyimplemented and we are delivering higherrevenues per customer in our retail andcorporate banking businesses.

We have significantly enhanced our productivity,as the quality programmes that we commencedin 2003 continue to show improving results.This is reflected in our cost:income ratiowhich, on a comparable basis and excludingcustomer redress provisions and thestrengthening of reserves for mortality,improved to 52.7 per cent, from 54.3 per centin 2004, and I am pleased that we haveachieved this whilst continuing to investsubstantially in the business. Our customersatisfaction scores hit record highs in 2005,again reflecting the improvement programmesestablished over the last couple of years, andwe will continue to drive further improvementsas we seek to differentiate our serviceperformance against that of our competitors.

The risk environment remains satisfactoryoverall, although we have seen a deteriorationin the unsecured consumer lending portfoliosas a result of an increase in the number ofcustomers facing repayment difficulties, whichhas been offset by a strong performance in theCorporate lending portfolios. Over time, weexpect the consumer position to stabilise in an improving economy, and the trend incorporate impairments to move away from theunusually benign recent experience.

Our employee engagement scores have alsoimproved significantly during the year,indicating that our people understand and arecommitted to our strategy, and we haveimproved our performance managementprocesses in support of the Group strategy. Wealso strengthened our senior managementteam, with the addition of key hires in theRetail Bank.

Overall, I am pleased with the progress of theGroup during 2005. We delivered on ourfinancial plans and we also used the time todevelop the franchise successfully in line withour growth strategy. We have continued to

make good progress in each of the divisions,the highlights of which are summarised below.

In the Retail Bank, income grew 4 per centwhilst costs rose by just 1 per cent, on acomparable basis and excluding customerredress provisions. This led to 7 per centgrowth in the trading surplus which wasoffset by an increase in the charge forimpaired lending, reflecting an increase incustomers experiencing repayment difficulties.Profit before tax reduced by 3 per cent. Toreflect the general slowdown in the consumercredit markets, a number of actions weretaken over the course of the year to tightencredit underwriting.

It is not in the interests of the individualcustomer or the Group to lend money to acustomer who cannot afford to repay. TheGroup takes its responsibilities in this regardvery seriously and has a responsible lendingprogramme, to ensure we help our customersclearly understand the nature of theagreements they are entering into and weconfirm affordability before agreeing to anyborrowing requests. Where customers doexperience repayment difficulties, our staff aretrained to offer the necessary advice andsupport to manage their finances and wehave a Customer Support Unit, whose role itis to identify customers who are showingearly signs of financial difficulty so that wecan provide early advice and support to them.

The Retail Bank is committed to achieving topperformance in both effectiveness andefficiency. Effectiveness is the ability to recruit,develop and retain loyal customers who thinkof us first for their next financial services need.Efficiency is the ability to provide service andsales at a lower cost so that we can give ourcustomers better value. We believe that inorder to achieve our goal we must be customerrather than product centric.

We continue to focus our efforts on our existingcustomers where we have an informationadvantage that allows us to be more effectiveand efficient in providing sales and service thatmeet our customers’ financial needs. We havealso stepped up our new customer recruitmentefforts, which has helped drive good targetcustomer recruitment, particularly in thesecond half of the year, to give a 28 per centincrease over last year.

We have committed ourselves to earning theright to meet 100 per cent of our customers’financial services needs and helping themsucceed financially. In 2005, we recorded ourhighest ever customer satisfaction scoresacross all our channels – branch, telephoneand internet banking. The improvement incustomer satisfaction and the renewed focuson meeting all our customers’ financial servicesneeds has helped to drive an improving salesperformance during 2005, and has beenaccompanied by good balance growth in ourkey product lines with mortgages up10 per cent, credit cards (excluding Goldfish)up 9 per cent and customer deposits

7 per cent higher. Sales through our internetand telephone channels grew strongly by28 per cent and 39 per cent respectively.

In Insurance and Investments, profits showedsignificant growth, reflecting further success indelivering our strategies. Profit before tax, on acomparable basis and excluding the 2004customer redress provision and thestrengthening of reserves for mortality,increased by 15 per cent, underpinned bystrong growth in both the bancassurance andIFA channels and continued control of costs.Profits grew strongly in both our life assuranceand general insurance businesses.

Scottish Widows delivered a significantincrease in sales as we focused on moreprofitable and more capital efficient businesslines. This led to a 19 per cent increase innew business contribution. Bancassurancesales grew by 13 per cent despite a slowdownseen in the levels of mortgage relatedprotection business. The sales of OEICsincreased by 72 per cent, building on thelaunch of the simplified product suite that wasintroduced at the end of 2004.

IFA sales grew strongly with a 30 per centimprovement in weighted sales, underpinnedby product and service improvements inpensions and investments. This improvedperformance led to an estimated market shareof 6.8 per cent in 2005, compared to5.9 per cent last year.

We have also invested in the development ofnew pensions and life platforms, and continueto develop our distribution capabilities. Weremain well placed to benefit from theanticipated growth in savings and investmentproduct sales over the coming years. The newlife platform has already supported the launchof the new partnership with Virgin Money.

Scottish Widows remains strongly capitalised.In addition to the payment of a £200 milliondividend to the Group in March 2005,Scottish Widows made a further £800 milliondistribution to the Group in December 2005as part of our plans to improve capitalefficiency. A second annual dividend will bepaid in March 2006.

Our General Insurance business continuedits successful development, delivering a22 per cent growth in profits, supported byimprovements to both the claims andcombined ratios. The results reflect continuedsuccessful cross-sales to franchise customersin both retail and business banking as wellas continued investment in our serviceperformance, direct channel business andclaims processing.

In Wholesale and International Banking, ourresults show excellent progress in our corebusinesses and the division delivered a20 per cent improvement in profit before tax,on a comparable basis, at the same time asimproving returns. The good results wereachieved by the successful implementation ofour strategies in Business Banking and

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8 LLOYDS TSB GROUP

Corporate responsibilityOur corporate vision is to make Lloyds TSB thebest financial services company, firstly in theUK then across borders.

Our corporate responsibility strategy is to helpachieve our corporate vision by building agreat place for our people to work, a greatplace for our customers to do business, andgenerating great returns for our shareholders.In so doing, we believe we create value for allour stakeholders.

We have strong evidence that there is a clearlink between employee satisfaction andcustomer satisfaction, which in turn leads toimproved financial performance. The businesscase for corporate responsibility is clear. Goodmanagement of corporate responsibility risksand opportunities is fundamental to deliveringa successful business.

A great place for our people to work

We seek our employees’ views on working forLloyds TSB through our Engagement Index, aquarterly survey of all staff. Our employeeengagement scores have reached record levelsthis year.

We have developed award-winningprogrammes in the areas of training anddevelopment, career management, work-lifebalance, diversity and community involvement.

A great place for our customers to do business

We are committed to deepening relationshipswith our customers by understanding andmeeting their needs. We measure ourcustomers’ satisfaction with our service andtrack our progress through our ‘CARE Index’which is based on information obtained fromover 10,000 interviews with customers eachmonth. The ‘CARE Index’ reached its highestever level in 2005.

We use the Six Sigma process improvementapproach to measure how well we meet ourcustomers’ requirements.

We have been at the forefront of developingfinancial services to help tackle the problemsof financial exclusion; these include basicbank accounts, support for community creditunions and other community financeinitiatives. We have opened 348,000 basicbank accounts for customers since 2003.

A great return for our shareholders

Through our corporate responsibilitymanagement system we identify social, ethicaland environmental risks and opportunities.We were one of the first UK banks to introducean environmental risk assessment system forour corporate and business lending.

Increasingly we are required to demonstrateour commitment to corporate responsibility towin business contracts. In turn, whenawarding contracts to key suppliers we takeaccount of their performance in areas ofhuman rights, treatment of employees,treatment of their own customers andsuppliers, the environment and thecommunity.

By adopting these corporate responsibilitypolicies we aim to provide a better return forour shareholders.

More information on all of the above issues isavailable in the Group’s 2005 corporateresponsibility report and there are details of howto obtain a copy on page 16.

Corporate Markets, and these businesses willcontinue to provide the platform for profitablegrowth in the division. We again maintainedour management discipline of positive jaws,with the rate of growth in income increasingby 10 per cent whilst costs grew by7 per cent, partly reflecting the increase ininvestment costs necessary to fund theongoing development of the division.

In Business Banking, we have again reportedstrong franchise growth winning increasingnumbers of new customers both throughattracting profitable ‘switchers’ from other banksand by cementing our position as the leader in the business start-ups market with a share of22 per cent. We have continued to build strongerrelationships with our customers, as we satisfymore of their needs, and this has been reflectedin good balance growth in both customerlending and deposits, as well as fee income.

Corporate Markets has delivered another strongperformance with a 31 per cent improvementin profits supported by a 27 per cent growth inincome from the cross-sale of products. Theresults reflect our strategy of managing thesebusinesses in an integrated manner in supportof our customers’ success. We were pleased toreceive external recognition of our efforts as wewon a range of awards including the CBI Bankof the Year Award 2005. Across the businesses,our asset quality remains very strong withimpairment losses declining year on year. Weare continuing to invest within CorporateMarkets, in terms of our relationship offers, ourproduct range and our infrastructure, to ensure

we can meet even more of our customers’needs in a highly competitive market.

Turning to 2006, our objective across each ofthe divisions is to continue to improve salesperformance and deepen our customerrelationships, which will result in market sharegrowth. To support our efficiency andproductivity objectives, we will continue to focus on the centralisation andindustrialisation of our manufacturingcapabilities, take the next steps in ourprocurement programme and further embedour quality approach throughout the Group.

In support of our customer objectives, wehave set stretching customer satisfactiontargets and will continue to develop ourproducts, policies and procedures in line withthose targets. Our strong risk and controlinfrastructure remains an important element ofour growth strategy and will be furtherenhanced as we seek to develop risk into adifferentiating competency. We will alsocontinue to focus on the development of ourstaff, whilst aiming for even strongerengagement scores.

In summary, 2005 was a good year for theGroup. We delivered on our short-termfinancial goals whilst also investing in thelong-term health of the business, which isnecessary to drive sustainable future earningsgrowth. This is our last set of results under thechairmanship of Maarten van den Bergh andI would like to take this opportunity to recordmy appreciation for his major contribution to

the Group over the past five and a half years.We are delighted that Sir Victor Blank willsucceed him and we look forward towelcoming him to the Group shortly.

Continuing to grow a successful business isthe best way for Lloyds TSB to create valuefor all our stakeholders and to contribute tothe wider economy. We maintain one of thelargest community investment programmesin the UK, supporting our customers andstaff, and making a significant contribution tothe local communities in which we operate.Since 1997, the Lloyds TSB Foundationshave received over £250 million from theGroup’s pre-tax profits to distribute tocommunity groups and in 2006 they willreceive in excess of £30 million.

Finally, I would like to express my continuedthanks to all of the staff who work for theLloyds TSB Group. They remain committed toserving the needs of our customers and theirwonderful efforts are the key element to ourcontinued success.

J Eric DanielsGroup Chief Executive 23 February 2006

Group chief executive’s review

RF62376 pp07-pp13_TP tp 15/3/06 12:27 Page 8

In Wholesale and International Banking we aregrowing our earnings by deepening relationshipswith our customers

0.0

Market shareof BusinessBankingstart-ups

Income andcost growth2005*

Post-tax returnon risk-weighted assets*

CorporateMarkets profitbefore tax£m*

Inco

me

Cost

s

2004

2005

2004

2005

+10%

+7%

732

958

1.50%1.41%

2004

2005

19%

22%+31%

* Comparable basis – excluding impact of volatility, other IFRS adjustments applied from 1 January 2005 and discontinued operations.

LLOYDS TSB GROUP 9

RF62376 pp07-pp13_TP tp 15/3/06 08:55 Page 9

for the year ended 31 December 2005

2005 2004£ milllion £ million

Net interest income 5,671 5,110Other income 17,055 14,173

Total income 22,726 19,283Insurance claims (12,186) (9,622)

Total income, net of insurance claims 10,540 9,661Operating expenses (5,471) (5,297)

Trading surplus 5,069 4,364Impairment losses on loans and advances (1,299) (866)Profit (loss) on sale and closure of businesses 50 (21)

Profit before tax 3,820 3,477Taxation (1,265) (1,018)

Profit for the year 2,555 2,459

Profit attributable to minority interests 62 67Profit attributable to equity shareholders 2,493 2,392

Profit for the year 2,555 2,459

Basic earnings per share 44.6p 42.8pDiluted earnings per share 44.2p 42.5p

Total dividend per share for the year* 34.2p 34.2pTotal dividend for the year* £1,915m £1,914m

£000 £000

Directors’ emoluments 8,826 8,478

Summary consolidated income statement

10 LLOYDS TSB GROUP

* Total dividend for the year represents the interim dividend paid in October 2005 and the final dividend which will be paid and accounted forin May 2006.

RF62376 pp07-pp13_TP tp 15/3/06 08:55 Page 10

at 31 December 2005

2005 2004£ milllion £ million

AssetsCash and liquid funds 1,156 1,170Trading securities, derivatives and other financial assets at fair value through profit or loss 66,252Debt securities and equity shares 70,795Loans and advances to banks 31,655 31,848Loans and advances to customers 174,944 155,318Available-for-sale financial assets 14,940Investment property 4,260 3,776Intangible assets, including goodwill and the value of in-force business 5,345 6,860Tangible fixed assets 4,291 4,180Other assets* 6,911 10,475

Total assets 309,754 284,422

LiabilitiesDeposits by banks 31,527 39,723Customer accounts 131,070 119,811Derivative financial instruments and other trading liabilities 6,396Debt securities in issue 39,346 28,770Insurance liabilities 41,068 53,651Liabilities to customers under investment contracts 21,839Retirement benefit obligations 2,910 3,075Subordinated liabilities 12,402 10,252Other liabilities* 12,566 17,462

Total liabilities 299,124 272,744Shareholders’ equity 10,195 11,047Minority interests 435 631

Total equity 10,630 11,678

Total equity and liabilities 309,754 284,422

The summary financial statement, comprising the summary consolidated income statement on page 10, the summary consolidated balancesheet on page 11 and the directors’ remuneration commentary on pages 12 and 13, was approved by the directors on 23 February 2006.

Maarten A van den Bergh J Eric Daniels Helen A WeirChairman Group Chief Executive Group Finance Director

Summary consolidated balance sheet

LLOYDS TSB GROUP 11

* Other assets and liabilities in 2004 include foreign exchange and interest rate derivative contracts, which are reported within separate captionsin 2005.

RF62376 pp07-pp13_TP tp 15/3/06 08:55 Page 11

Five year financial summary

12 LLOYDS TSB GROUP

Summary directors’ reportAn interim dividend of 10.7p per ordinaryshare was paid on 5 October 2005 and a finaldividend of 23.5p per ordinary share will bepaid on 3 May 2006.

The Company is a holding company and itssubsidiaries provide a wide range of bankingand financial services through branches andoffices in the UK and overseas.

A review of the business and an indication offuture developments are given on pages 3 to 9.

Biographical details of directors are shown onpages 14 and 15. Dr Gibson-Smith andMr Pritchard left the board at the annualgeneral meeting in 2005. Mr Ayliffe left theboard on 31 January 2005.

Sir Julian Horn-Smith joined the board on1 January 2005 and was elected at theannual general meeting on 5 May 2005.

Ms Dial joined the board on 1 June 2005,Mr du Plessis and Lord Leitch joined the boardon 1 October 2005 and Sir Victor Blankjoins the board on 1 March 2006. Inaccordance with the articles of association,

they offer themselves for election at the annualgeneral meeting.

Also in accordance with the articles ofassociation, Mr Kane retires at the annual generalmeeting and offers himself for re-election.

Particulars of the directors’ interests in sharesin the Company are shown in the full reportand accounts.

Directors’ remunerationFull details of the Group’s remuneration policyfor directors as well as details of remunerationearned by directors in 2005 appear in thedirectors’ remuneration report within the fullreport and accounts. This may also be seen inthe investor relations section of the Group’swebsite, at www.lloydstsb.com, or a copy maybe obtained by completing and returning therequest form which accompanies this annualreview. At the annual general meeting,shareholders will be asked to approve thedirectors’ remuneration report.

Summaries of selected sections of thedirectors’ remuneration report are included inthis review.

The Group’s policy is to ensure that individualrewards are aligned with Lloyds TSB Group’sperformance and the interests of shareholders.Packages are designed to attract and retainexecutive directors and senior management ofthe highest calibre and to motivate them toperform to the highest standards. In early2005 the remuneration committee initiated acomprehensive and independent policy reviewresulting in a number of policy changes and arecommendation to shareholders of theadoption of a new long-term incentive plan.

The overall package reflects practice forcomparable positions in the market in whichthe Group operates (FTSE 20) and also takesaccount of the terms and conditions applyingto other employees of the Group. The policyis for basic salaries to reflect the relevantmarket median, and total direct compensation(basic salary, annual incentives and the valueof long-term incentives) to reward upperquartile performance with upper quartileremuneration. This policy is consistent withthe Group’s belief that performance shoulddetermine a significant proportion of the totalremuneration package for executive directors.

IFRS UK GAAP

2005 2004 2004 2003 2002 2001

Statutory results £m

Profit before tax 3,820 3,477 3,493 4,348 2,618 3,167

Profit for the year 2,555 2,459 2,489 3,323 1,852 2,290

Profit attributable to equity shareholders 2,493 2,392 2,421 3,254 1,790 2,233

Economic profit 1,616 1,448 1,525 2,493 830 1,123

Share information

Basic earnings per share 44.6p 42.8p 43.3p 58.3p 32.1p 40.4p

Dividends per share (net) 34.2p 34.2p 34.2p 34.2p 34.2p 33.7p

Market price (year-end) 488.5p 473p 473p 448p 446p 746p

Number of shareholders (thousands) 920 953 953 974 973 981

Number of ordinary shares in issue (millions) 5,603 5,596 5,596 5,594 5,583 5,564

Performance measures %

Post-tax return on average shareholders’ equity 25.6 22.8 24.3 38.5 16.8 18.1

Post-tax return on average risk-weighted assets 1.81 1.99 2.01 2.63 1.62 2.26

Cost:income ratio* 51.9 54.8 51.4 52.2 55.3 53.7

31 December 1January 31December 31December 31December 31DecemberBalance sheet 2005 2005 2004 2003 2002 2001

Shareholders’ equity (£m) 10,195 9,489 9,977 9,624 7,943 10,326

Net assets per share (pence) 180p 167p 176p 170p 140p 183p

Total assets (£m) 309,754 292,854 279,843 252,012 252,561 235,501

Capital ratios: total capital (%) 10.9 10.1 10.0 11.3 9.6 8.8tier 1 capital (%) 7.9 8.2 8.9 9.5 7.7 7.7

* Total operating expenses divided by total income, net of insurance claims.

RF62376 pp07-pp13_TP tp 15/3/06 12:27 Page 12

The package for executive directors comprisesbasic salary, a bonus receivable under theannual incentive scheme (paid in cash anddeferred shares), share options (which areexercisable only if challenging performanceconditions are satisfied) and a pension basedon either salary and length of service with theGroup, with a maximum pension of two-thirdsof final salary, or defined contributions, wherethe final entitlement will depend on theircontributions and the final value of their fund.

Newly appointed executive directors’ pensionsare based on defined contributions or theymay elect to receive a salary supplement. Theexecutive directors and the chairman are alsoeligible to participate in the staff shareincentive plan and ‘sharesave’ option schemeon the same basis as other employees.

The 2005 annual bonus opportunity forexecutive directors was equal to 150 per centof salary. The overall bonus pot is linked toprofit before tax and economic profit. Under theperformance share plan, directors will berequired to defer 50 per cent of their annualbonus into shares in the Group, known as‘bonus shares’, which will be held on behalf ofthe executive for a period of three years beforerelease. Provided a performance condition(Total Shareholder Return (TSR) against acomparator group calculated by reference toboth dividends and growth in share price) ismet and the executive remains in employment,additional shares will be awarded after threeyears to match the bonus shares. Twomatching shares will be awarded for eachbonus share if the Group is placed first in thecomparator group. No shares will be awardedif the Group is placed below median. There isno retesting of the performance condition.

From 2006 the current bonus pool arrangementfor executive directors will be discontinued andreplaced by an approach based upon individualcontribution and overall corporate results. From

2006 Mr Daniels’ bonus opportunity will alsobe increased to 175 per cent of basic salary forexceptional performance, to close the gap withmarket levels. Similarly, Mr Daniels’ bonusaward will be based upon overall corporateresults and individual performance. However,an amount equivalent to 75 per cent(112.5 per cent for Mr Daniels) of basic salarywill remain available to executive directors onthe achievement of stretching targets.

Options granted in 2005 under the executiveshare option scheme will only be exercisable ifa performance condition linked to TSR againsta comparator group is met. The option isexercisable in full if the Group is placed fourthin the comparator group and the option willlapse if it is placed ninth or below. 30 per centof the options granted will be exercisable if theGroup is placed at median of the comparatorgroup. There will be no retesting of theperformance condition.

It is proposed that further grants under theperformance share plan and the executiveshare option scheme will not be awarded after2006. From 2007, therefore, awards underthe bonus scheme will be cash only.Shareholders are being asked at the annualgeneral meeting to approve the replacement ofthe executive share option scheme and theperformance share plan with a new long-termincentive plan.

Under the proposed long-term incentive plan,awards of shares may be made, with thereceipt of shares and the number of sharesreceived subject to the satisfaction oftwo distinct pre-determined performanceconditions, measuring performance of theGroup over a three year period. 50 per cent ofthe award will be based on a conditionmeasuring the Group’s TSR against thecomparator group of 14 financial servicescompanies. The remaining 50 per cent will bebased on earnings per share growth calculated

on a compound annualised basis. Awards inany one financial year will not normally exceedthree times basic salary at the time of award. Inexceptional circumstances this may beincreased to up to four times basic salary.Awards will lapse at the end of the performanceperiod to the extent that the performanceconditions have not been satisfied. There willbe no retesting of the performance conditions.The aim of the plan is to deliver shareholdervalue by linking the receipt of shares to animprovement in the performance of the Groupover a three year period.

Executive directors will also now be expectedto build a shareholding in the Group equivalentto 1.5 times (2 times for Mr Daniels) basicsalary over a period of four years.

The general Group policy is for executivedirectors to have service agreements withnotice periods of no greater than one year, toreflect current corporate governance bestpractice. It is the Group’s policy that wherecompensation on early termination is due, itshould be paid on a phased basis and subjectto mitigation.

The fees of the independent non-executivedirectors are agreed by the board within a totalamount determined by the shareholders. Theymay also receive fees, agreed by the board,for membership of board committees. The feesare designed to recognise the responsibilitiesof a non-executive director’s role and to attractindividuals with relevant skills, knowledge andexperience. The fees are neither performancerelated nor pensionable and are comparable tothose paid by other companies. Independentnon-executive directors who serve on boardsof subsidiary companies may also receivefees from the subsidiaries. They do nothave service agreements and, in accordancewith the articles of association, theirappointment may be terminated at any timewithout compensation.

LLOYDS TSB GROUP 13

Summary of emoluments paid to directors

2005 2004£000 £000

Aggregate emoluments paid to directors 8,826 8,478

Aggregate gains made by directors on exercise of share options 1,077 –

Aggregate value of assets receivable under long-term incentive schemes – –

Aggregate company contributions in respect of directors to defined contribution pension schemes 103 75

Number of directors with retirementbenefits accruing under:

– defined contribution schemes 2 2

– defined benefit schemes 5 6

120

100

80

60

40

20

0

Lloyds TSB Group plcFTSE 100 Index Source : Datastream

Rebased to 100 on 31 December 2000

31 Dec 2001

31 Dec 2002

31 Dec 2003

31 Dec 2000

31 Dec 2005

31 Dec 2004

Performance graphThis graph illustrates the performance of Lloyds TSB Group plc and theFTSE 100 index over the past five years. Performance is measured bytotal shareholder return (share price growth plus dividends).

Comparative TSR

RF62376 pp07-pp13_TP tp 15/3/06 08:55 Page 13

14 LLOYDS TSB GROUP

The board

* Member of the audit committee ** Chairman of the audit committee� Member of the nomination committee

�� Chairman of the nomination committee† Member of the remuneration committee

†† Chairman of the remuneration committee+ Member of the risk oversight committee

++ Chairman of the risk oversight committee� Independent director� Senior independent director

Non-executive directors

Maarten A van den Bergh��++

Chairman(retiring at the annual general meeting on 11 May 2006)Joined the board in 2000 as deputy chairman and wasappointed chairman in 2001. Joined the RoyalDutch/Shell Group of companies in 1968 and after anumber of senior and general management appointmentsin that group, became group managing director in 1992.Appointed president of Royal Dutch Petroleum Companyand vice chairman of the committee of managing directorsof the Royal Dutch/Shell Group in 1998 and continued inthese roles until 2000. A non-executive director of RoyalDutch Shell, BT Group and British Airways, and a memberof the supervisory board of Akzo Nobel. Aged 63.

Ewan Brown CBE FRSE�**�+

Chairman of Lloyds TSB ScotlandJoined the board in 1999. A non-executive director ofLloyds TSB Scotland since 1997. Joined Noble Grossart in1969 and was an executive director of that company untilDecember 2003. Chairman of Transport InitiativesEdinburgh. A non-executive director of John Wood Group,Noble Grossart and Stagecoach Group. Aged 63.

Sir Julian Horn-Smith�†+Joined the board in January 2005. Joined Vodafone in1984 and held a number of senior and generalmanagement appointments before being appointed to theboard of that company in 1996 and deputy chief executiveofficer in 2005. Previously held positions in Rediffusionfrom 1972 to 1978, Philips from 1978 to 1982 andMars GB from 1982 to 1984. A non-executive director ofSmiths Group. Aged 57.

Lord Leitch�*Joined the board in October 2005. Held a number ofsenior and general management appointments in AlliedDunbar, Eagle Star and Threadneedle Asset Managementbefore the merger of Zurich Group and British AmericanTobacco’s financial services businesses in 1998.Subsequently served as chairman and chief executiveofficer of Zurich Financial Services (UK & Asia Pacific) untilhis retirement in 2004. Chairman of HM Treasury’s Reviewof Skills and the National Employment Panel, and deputychairman of the Commonwealth Education Fund. A non-executive director of United Business Media and BUPA.Aged 58.

DeAnne S Julius CBE�†�

Joined the board in 2001. Held a number of seniorappointments in the UK and USA with the World Bank,Royal Dutch/Shell Group and British Airways, beforemembership of the Bank of England Monetary PolicyCommittee from 1997 to 2001. Chaired HM Treasury’sbanking services consumer codes review group in 2000/1.Chairman of the Royal Institute of International Affairs. Anon-executive director of BP, Serco Group and RocheHoldings SA. Aged 56.

Angela A Knight�*Joined the board in 2003. Deputy chairman of ScottishWidows, having been appointed to the board of thatcompany before it became a member of the Lloyds TSBGroup. A member of parliament from 1992 to 1997 andEconomic Secretary to the Treasury from 1995 to 1997.Chief executive of the Association of Private ClientInvestment Managers and Stockbrokers. A non-executivedirector of LogicaCMG and the Port of London Authority.Aged 55.

Jan P du Plessis�*Joined the board in October 2005. Chairman of BritishAmerican Tobacco and RHM. Held a number of senior andgeneral management appointments in Rembrandt Groupfrom 1981, before joining Compagnie FinancièreRichemont as group finance director in 1988, a positionhe held until 2004. From 1990 to 1995 he was also thegroup finance director of Rothmans International. Aged 52.

Gavin J N Gemmell CBE�*Chairman of Scottish WidowsJoined the board in 2002. A non-executive director ofScottish Widows, having been appointed to the board ofthat company before it became a member of the LloydsTSB Group. Retired as senior partner of Baillie Gifford in2001, after 37 years with that firm. A non-executivedirector of Archangel Informal Investment. Chairman of theCourt of Heriot-Watt University. Aged 64.

Sir Victor BlankDeputy Chairman(succeeding Maarten van den Bergh as chairman)Joins the board on 1 March 2006 as deputy chairman. Willsucceed Maarten van den Bergh as chairman following theannual general meeting in May 2006. Former partner inClifford-Turner (now Clifford Chance) from 1969 to 1981 andchairman and chief executive of Charterhouse until 1997.Director of The Royal Bank of Scotland from 1985 to 1993.Chairman of GUS and Trinity Mirror (until May 2006) and amember of the Financial Reporting Council and of the Councilof Oxford University. Chairs two charities, WellBeing ofWomen and UJS Hillel, as well as the Council of UniversityCollege School. Aged 63.

Wolfgang C G Berndt�††Joined the board in 2003. Joined Procter and Gamble in1967 and held a number of senior and generalmanagement appointments in Europe, South America andNorth America, before retiring in 2001. A non-executivedirector of Cadbury Schweppes and GfK AG. Boardmember of the Institute for the Future. Aged 63.

RF62376 pp14-pp15 tp 15/3/06 08:55 Page 14

LLOYDS TSB GROUP 15

The board

Executive directors

Archie G KaneGroup Executive Director Insurance and InvestmentsJoined TSB Commercial Holdings in 1986 and held anumber of senior and general management appointmentsin Lloyds TSB Group before being appointed to the boardin 2000, as group executive director, IT and operations.Appointed group executive director, insurance andinvestments in October 2003. After some 10 years in theaccountancy profession, joined General Telephone &Electronics Corporation in 1980, serving as financedirector in the UK from 1983 to 1985. Aged 53.

G Truett TateGroup Executive Director Wholesale and International BankingJoined the Group in 2003 as managing director, corporatebanking before being appointed to the board in 2004.Served with Citigroup from 1972 to 1999, where he held a number of senior and general managementappointments in the USA, South America, Asia andEurope. He was president and chief executive officer ofeCharge Corporation from 1999 to 2001 and co-founderand vice chairman of the board of Chase Cost ManagementInc from 1996 to 2003. Aged 55.

Helen A WeirGroup Finance DirectorJoined the board in 2004. Group finance director ofKingfisher from 2000 to 2004. Previously finance directorof B&Q from 1997, having joined that company in 1995,and held a senior position at McKinsey & Co from 1990 to1995. Began her career at Unilever in 1983. A non-executive director of Royal Mail Holdings and a member ofthe Accounting Standards Board. Aged 43.

Company SecretaryAlastair J Michie FCIS FCIBS

J Eric DanielsGroup Chief ExecutiveJoined the board in 2001 as group executive director, UKretail banking before his appointment as group chiefexecutive in June 2003. Served with Citibank from 1975and held a number of senior and general managementappointments in the USA, South America and Europebefore becoming chief operating officer of CitibankConsumer Bank in 1998. Following the Citibank/Travelersmerger in 1998, he was chairman and chief executiveofficer of Travelers Life and Annuity until 2000. Chairmanand chief executive officer of Zona Financiera from 2000to 2001. Aged 54.

Michael E FaireyDeputy Group Chief ExecutiveJoined TSB Group in 1991 and held a number of seniorand general management appointments before beingappointed to the board in 1997 and deputy group chiefexecutive in 1998. Joined Barclays Bank in 1967 andheld a number of senior and general managementappointments, including managing director of BarclaysDirect Lending Services from 1990 to 1991. President ofThe British Quality Foundation. Aged 57.

Terri A DialGroup Executive DirectorUK Retail BankingJoined the board in June 2005. Served with Wells Fargoin the USA from 1973 to 2001 where she held a numberof senior and general management appointments beforebecoming president and chief executive officer of WellsFargo Bank in 1998. A non-executive director of theLookSmart Corporation and Onyz Software. Aged 56.

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16 LLOYDS TSB GROUP

Share price informationIn addition to listings in the financial pages of thepress, the latest price of Lloyds TSB shares on theLondon Stock Exchange can be obtained bytelephoning 0906 877 1515. Calls are chargedat 55p per minute including VAT.Visit www.londonstockexchange.com for details.

Share dealing facilitiesA full range of dealing services is available throughLloyds TSB Registrars.For internet dealing, the current rate of commissionfor both purchases and sales is 0.5%: minimum£17.50. Visit www.shareview.co.uk/dealing forfull details.For telephone dealing, the current rate for bothpurchases and sales is 0.5%: minimum £20. Forfull details, contact Lloyds TSB Registrars on: 0870 850 0852.For postal dealing, the current rate for bothpurchases and sales is 0.75%: no minimum. Forfull details, contact Lloyds TSB Registrars on:0870 242 4244.

American Depositary Receipts (ADRs)Lloyds TSB shares are traded in the USA throughan NYSE-listed sponsored ADR facility, with TheBank of New York as the depositary. The ADRs aretraded on the New York Stock Exchange under thesymbol LYG. The CUSIP number is 539439109and the ratio of ADRs to ordinary shares is 1:4.For more information contact: The Bank of NewYork, Investor Services, PO Box 11258, ChurchStreet Station, New York, NY 10286-1258.Telephone: 888 BNY ADRS (US toll free),international callers: +1 212 815 3700. Alternatively visit www.adrbny.com or emailshareowners@bankofny.com

Individual Savings Accounts (ISAs)The Company provides a facility for investing inLloyds TSB shares through an ISA. For detailscontact Retail Investor Operations, Lloyds TSBRegistrars, The Causeway, Worthing, West SussexBN99 6UY. Telephone 0870 242 4244.

Corporate responsibilityA copy of the Group’s corporate responsibilityreport may be obtained by writing to CorporateResponsibility, Lloyds TSB Group plc,25 Gresham Street, London EC2V 7HN. Thisinformation together with the Group’s code ofbusiness conduct is also available on theGroup’s website.

Shareholder enquiriesThe Company’s share register is maintained byLloyds TSB Registrars, The Causeway, Worthing,West Sussex BN99 6DA. Telephone 0870 6003990; textphone 0870 600 3950.Contact them if you have enquiries about yourLloyds TSB shareholding, including thoseconcerning the following matters:• change of name or address• loss of share certificate, dividend warrant or tax

voucher• obtaining a form for dividends to be paid directly

to your bank or building society account (taxvouchers will still be sent to your registeredaddress unless you request otherwise)

• obtaining details of the dividend reinvestmentplan which enables you to use your cashdividends to buy Lloyds TSB shares in themarket

• requesting copies of the report and accounts inalternative formats for shareholders withdisabilities.

Lloyds TSB Registrars operates a web based enquiryand portfolio management service for shareholders.Visit www.shareview.co.uk for details.

Auditors’ reportThe auditors’ report on the full accounts for theyear ended 31 December 2005 was unqualifiedand did not include a statement under sections237(2) (accounting records or returns inadequateor accounts not agreeing with records and returns)or 237(3) (failure to obtain necessary informationand explanations) of the UK Companies Act 1985.

Independent auditors’ statement to themembers of Lloyds TSB Group plcWe have examined the summary financialstatement, comprising the summary consolidatedincome statement on page 10, the summaryconsolidated balance sheet on page 11 and thedirectors’ remuneration commentary on pages 12and 13.

Respective responsibilities of directors andauditorsThe directors are responsible for preparing theannual review in accordance with applicable law.Our responsibility is to report to you our opinion onthe consistency of the summary financial statementwithin the annual review with the annual financialstatements, directors’ report, and directors’remuneration report, and its compliance with therelevant requirements of section 251 of the UKCompanies Act 1985 and the regulations madethereunder. We also read the other informationcontained in the annual review and consider theimplications for our report if we become aware of anyapparent misstatements or material inconsistencieswith the summary financial statement.Our statement, including this opinion, has beenprepared for and only for the Company’s membersas a body in accordance with Section 251 of theUnited Kingdom Companies Act 1985 and for noother purpose. We do not, in giving this opinion,accept or assume responsibility for any otherpurpose or to any other person to whom thisstatement is shown or in to whose hands it maycome save where expressly agreed by our priorconsent in writing.

Basis of opinionWe conducted our work in accordance with Bulletin1999/6 The auditors’ statement on the summaryfinancial statement issued by the Auditing PracticesBoard for use in the United Kingdom.

OpinionIn our opinion the summary financial statement,comprising the summary consolidated incomestatement on page 10, the summary consolidatedbalance sheet on page 11 and the directors’remuneration commentary on pages 12 and 13,is consistent with the annual financialstatements, directors’ report and directors’remuneration report of Lloyds TSB Group plc forthe year ended 31 December 2005 and complieswith the applicable requirements of section 251of the Companies Act 1985, and the regulationsmade thereunder.PricewaterhouseCoopers LLPChartered Accountants and Registered AuditorsSouthampton, England23 February 2006

Designed by Starling Design/The TeamPrinted in the UK by Royle Corporate Print who are ISO 9001 andISO 14001 accredited, on paper sourced from sustainable managedforests, and made using the elemental chlorine free process at a Mill which is ISO 14001 accredited.

Financial calendar 200624 FebruaryResults for 2005 announced

8 MarchEx-dividend date for 2005 final dividend

10 MarchRecord date for final dividend

5 AprilFinal date for joining or leaving the dividendreinvestment plan for the final dividend

3 MayFinal dividend paid

11 MayAnnual general meeting in Glasgow

2 AugustResults for half-year to 30 June 2006 announced

9 AugustEx-dividend date for 2006 interim dividend

11 AugustRecord date for interim dividend

6 SeptemberFinal date for joining or leaving the dividendreinvestment plan for the interim dividend

4 OctoberInterim dividend paid

Head office25 Gresham StreetLondon EC2V 7HNTelephone +44 (0)20 7626 1500

Registered officeHenry Duncan House120 George StreetEdinburgh EH2 4LHRegistered in Scotland no 95000

Internetwww.lloydstsb.com

RegistrarLloyds TSB RegistrarsThe CausewayWorthingWest Sussex BN99 6DATelephone 0870 600 3990Textphone 0870 600 3950Overseas +44 (0)121 415 7047

Information for shareholders

Forward looking statementsThis document contains forward looking statements withrespect to the business, strategy and plans of the LloydsTSB Group, its current goals and expectations relating toits future financial condition and performance. By theirnature, forward looking statements involve risk anduncertainty because they relate to events and depend oncircumstances that will occur in the future. Lloyds TSBGroup’s actual future results may differ materially from theresults expressed or implied in these forward lookingstatements as a result of a variety of factors, including UKdomestic and global economic and business conditions,risks concerning borrower credit quality, market relatedrisks such as interest rate risk and exchange rate risk inits banking business and equity risk in its insurancebusinesses, changing demographic trends, unexpectedchanges to regulation or regulatory actions, changes incustomer preferences, competition and otherfactors. Please refer to the Annual Report on Form 20-F ofLloyds TSB Group filed with the US Securities andExchange Commission for a discussion of such factors.

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