Lloyds Banking Group PLC — Proxy Solicitation & Information Statement 2015

Mar 27, 2015

THIS DOCUMENT REQUIRES YOUR ATTENTION

Dividend Reinvestment Plan Frequently Asked Questions

What is a DRIP?

A Dividend Reinvestment Plan ('DRIP') allows the DRIP administrator, Equiniti Financial Services Limited ('Equiniti'), to use your cash dividends to purchase shares for you in the market. You will not receive a cash payment while you remain in the DRIP. Any residual cash that is insufficient to buy a whole share will roll over to the next dividend payment to purchase additional shares.

When will I receive the shares?

Equiniti will start the purchase of your shares as soon as practicable after the dividend payment date. This may take several days to complete, however all participants will receive the same average price. Shares will be added to your holding 3-4 days following the dividend payment date.

How many shares will I receive?

The number of shares you will receive will depend on:

(i) your cash dividend, based on the number of shares you hold at the dividend record date;
(ii) the purchase price of the shares; and
(iii) the dealing costs and stamp duty reserve tax for the purchase of shares.

You will receive the maximum whole number of shares which can be purchased on your behalf. Any cash balance will be carried forward.

What happens if I do not have enough cash to purchase one share?

The cash will be rolled over and will be put towards the purchase of additional shares at the time of the next dividend if you remain a participant in the DRIP at such time. There are no charges for the dividends to roll over.

If you leave the DRIP, or if the DRIP comes to an end, Equiniti will send you any remaining cash as soon as possible.

How will I receive my new shares?

Shares purchased by Equiniti on your behalf will be added to your shareholding. If this is certificated, you will receive an additional share certificate. Shares held in the Lloyds Banking Group Shareholder Account ('LBGSA') will be added to that holding and will show on your annual statement. CREST holders will receive new shares via CREST.

Must my participation in the DRIP be in respect of my entire holding?

Usually you must participate in the DRIP in respect of your entire shareholding. However, if your shares are held for more than one beneficial owner, Equiniti may (at its discretion) allow you to reinvest the cash dividend on only part of your shareholding.

How do I leave the DRIP?

You can leave the DRIP at any time and there is no charge. Simply complete the DRIP Revocation Form enclosed with your Proxy Card/Voting Form.

If I leave the DRIP, can I re-join?

If you choose to withdraw from the DRIP, you can re-join at any time by writing to Equiniti at the address below.

Fees and charges

There is no charge for joining or leaving the DRIP and there is no annual fee.

The commission charge is 0.5% of the value of shares purchased, with no minimum fee. Stamp duty reserve tax is currently 0.5% of the value of shares that you purchase. These will be deducted from your dividend proceeds.

What are the tax effects of participating in the DRIP? Will I still receive a tax voucher?

For tax purposes, you are treated as if you had received the whole of your dividend in cash. If you elect to participate, or continue to participate, in the DRIP:

• where shares are held by share certificate, upon completion of each DRIP share purchase Equiniti will send you a tax voucher with a contract note confirming the purchase price and number of new shares purchased with a new share certificate in respect of such shares;
• where shares are held in the LBGSA, you will receive a tax voucher and a contract note confirming the purchase and number of new shares purchased; or
• where shares are held in CREST, Equiniti will send you a tax voucher and a contract note confirming the purchase and the number of new shares purchased will be credited to CREST accounts.

Who should I contact if I have further questions?

☑ If you have any questions about the DRIP, please contact the shareholder helpline on 0871 384 2990* or +44 121 415 7066 from outside the UK.

☒ Alternatively, you can write to the Share Dividend Team, Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA.

*Lines are open 8.30 am to 5.30 pm, Monday to Friday. Calls cost 8p per minute plus network extras. Calls to +44 121 415 7066 from outside the UK are charged at applicable international rates.

Note: Extended opening hours

31 March to 17 April 2015 (weekdays) - 8.00 am to 8.00 pm
6 April 2015 (only) - 10.00 am to 4.00 pm

Your Dividend - Your Choice

Lloyds Banking Group plc is recommending a dividend payment of 0.75p per ordinary share in respect of the full financial year ended 31 December 2014 and is re-launching its Dividend Reinvestment Plan ('DRIP').

Our records show that you will receive your dividend in shares

As a participant in the DRIP, you will receive shares instead of a cash dividend payment. The information contained in this guide is designed to help you understand the choices available to you and any action you need to take.

ACTION REQUIRED:

• Choose how you wish to receive your dividend entitlement:
• if you would like to receive shares, do nothing further; or
• if you wish to receive cash instead, follow the instructions overleaf

KEY DATES

7 April 2015	Dividend record date
21 April 2015	Deadline for Equiniti to receive instructions (5.00 pm)
14 May 2015	Annual General Meeting ('AGM') (11.00 am)
19 May 2015	Cash dividend payment date
28 May 2015	Latest date by which additional DRIP shares will be credited

IMPORTANT DOCUMENTS YOU SHOULD READ

Chairman's letter to shareholders about the DRIP - available at www.lloydsbankinggroup.com

DRIP Terms and Conditions - available at www.shareview.co.uk/info/drip

DRIP Frequently Asked Questions - located on the reverse of this guide.

BECOMING THE BEST BANK FOR CUSTOMERS

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PLEASE READ IN CONJUNCTION WITH THE RELEVANT FORMS ATTACHED TO YOUR PROXY CARD/VOTING FORM EXAMPLES ON HOW TO COMPLETE THESE FORMS ARE PROVIDED BELOW

CHECKLIST FOR COMPLETION:

☐ Read the Chairman's letter, DRIP Terms and Conditions and Frequently Asked Questions.
☐ Do you want to withdraw from the DRIP and receive a cash dividend payment? If yes, please complete the DRIP Revocation Form.
☐ If you are withdrawing from the DRIP, have you completed the Dividend Payment Instruction Form so that the cash dividend payment can be paid directly to a bank/building society account?
☐ If you are returning a form, have all shareholders signed (where applicable) in BLACK INK?

If you are returning forms, they must be received by our Registrar, Equiniti, by 5.00 pm on 21 April 2015 to ensure the dividend is paid in accordance with your instructions.

If you would like to withdraw from the DRIP and receive your dividend in cash

STEP 1 - SIGN AND DATE THE DRIP REVOCATION FORM

• Lloyds Banking Group plc Dividend Reinvestment Plan Revocation Form + YOU ARE CURRENTLY REGISTERED TO RECEIVE YOUR DIVIDEND IN SHARES AS A PARTICIPANT IN THE DIVIDEND REINVESTMENT PLAN ('DRIP')

ONLY COMPLETE AND RETURN THIS SECTION OF THIS FORM IF YOU WISH TO REVOKE THE ABOVE INSTRUCTION AND THEREBY WITHDRAW FROM THE DRIP

Name
Shareholder reference 12345678901

I/We wish to REVOKE my/our instruction to participate in the DRIP relating to the above-mentioned account. Any cash residue will be dealt with in the manner set out in the DRIP Terms and Conditions available online at www.lloydsbankinggroup.com. Please mark this box if signing on behalf of the shareholder(s) as a Power of Attorney or other authority. ☐

If you are REVOKING your instruction to participate in the DRIP, all shareholders MUST sign in BLACK ink (or, where applicable, executors or administrators).

IF YOU CHOOSE TO WITHDRAW FROM THE DRIP, YOU CAN REGISTER TO HAVE FUTURE DIVIDEND PAYMENTS PAID DIRECTLY TO A BANK/BUILDING SOCIETY ACCOUNT BY COMPLETING THE DIVIDEND PAYMENT INSTRUCTION FORM

STEP 2 - DETACH THE FORM AND RETURN IT TO EQUINITI USING THE REPLY PAID ENVELOPE PROVIDED

Registering your bank/building society details

STEP 1 - COMPLETE THE DIVIDEND PAYMENT INSTRUCTION FORM INCLUDING THE SORT CODE, ACCOUNT NUMBER AND BUILDING SOCIETY REFERENCE (IF APPLICABLE)

See the reverse of the Dividend Payment Instruction Form for further information

• Lloyds Banking Group plc Dividend Payment Instruction Form + ONLY COMPLETE AND RETURN THIS SECTION OF THIS FORM IF YOU ARE REVOKING YOUR INSTRUCTION TO PARTICIPATE IN THE DRIP AND WISH TO PAY FUTURE DIVIDENDS TO A BANK ACCOUNT

STEP 2 - SIGN THE DIVIDEND PAYMENT INSTRUCTION FORM

Ensure all registered shareholders sign in the relevant boxes in black ink

• Please pay future Lloyds Banking Group plc dividends directly to the above UK bank or building society account.

Please mark this box if signing on behalf of the shareholder(s) as a Power of Attorney or other authority. ☐

If you are CHANGING your instruction, all shareholders MUST sign in BLACK ink (or, where applicable, executors or administrators).

STEP 3 - DETACH THE FORM AND RETURN IT TO EQUINITI USING THE REPLY PAID ENVELOPE PROVIDED