Lloyds Banking Group plc – s. 38(3)

May 19, 2009

Attention: Sophia Javed

Further to your letter of May 11, 2009 and email of May 19, 2009 (collectively, the Letter), we understand that:

1. Lloyds is proposing to make an international placing and open offer (the Lloyds Placing and Compensatory Open Offer) of new ordinary shares of Lloyds (Open Offer Shares) to existing holders of Lloyds ordinary shares (Ordinary Shares), the proceeds of which will be used to redeem outstanding HMT Preference Shares which were issued to HM Treasury in January 2009. Open Offer Shares which are not taken up will be placed in the market (the Placing). Holders of Ordinary Shares who do not take up (or are unable to take up) their entitlement to subscribe for Open Offer Shares under the Lloyds Placing and Compensatory Open Offer will receive pro-rata the proceeds of the Placing, to the extent that such Open Offer Shares are placed at a premium (after deducting related expenses) to the issue price of the Open Offer Shares.

2. Canadian holders of Ordinary Shares who are accredited investors (within the meaning of National Instrument 45-106 -- Prospectus and Registration Exemptions) (Accredited Investors) will be permitted to participate in the Lloyds Placing and Compensatory Open Offer, as described in the Prospectus (defined below). Canadian residents that are not Accredited Investors will not be permitted to participate in the Lloyds Placing and Compensatory Open Offer.

3. Prospective purchasers, who must be Accredited Investors in Ontario and other relevant Canadian jurisdictions pursuant to the Lloyds Placing and Compensatory Open Offer, will have access by the internet to a Canadian offering memorandum that includes the U.K. prospectus (collectively, the Prospectus).

4. Lloyds will rely on appropriate exemptions from the prospectus and registration requirements of the Securities Act (Ontario) to distribute securities to residents of Ontario pursuant to the Lloyds Placing and Compensatory Open Offer.

5. The Ordinary Shares of Lloyds are currently admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange

6. Lloyds intends to make applications to the UK Listing Authority for the Open Offer Shares to be admitted to the Official List and to the London Stock Exchange for the Open Offer Shares to be admitted to trading on the London Stock Exchange's main market for listed securities (Admission).

7. The Prospectus will contain one or more representations identical or substantially similar to the form of representation set out in the Letter (the Prospectus Listing Representation): (a) applications will be made to the UK Listing Authority for the Open Offer Shares to be admitted to the Official List and to the London Stock Exchange for the Open Offer Shares to be admitted to trading on the London Stock Exchange's main market for listed securities; and (b) it is expected that admission of the Open Offer Shares will occur and that dealings in the Open Offer Shares on the London Stock Exchange will commence at 8:00 a.m. on June 9, 2009. The Prospectus also includes (a) a table indicating the Ordinary Share ownership "interests of directors" and has a heading stating "Interests immediately following Admission", and (b) a table indicating "major shareholders of Lloyds Banking plc" with headings stating "Prior to Admission of the Open Offer Shares" and "Following Admission of the Open Offer Shares", where "Admission" is defined in the Prospectus as admission of the Open Offer Shares to the Official List and to trading on the London Stock Exchange's main market for listed securities.

8. The UK Listing Authority has not granted approval to the admission to the Official List of, and the London Stock Exchange has not granted approval to the listing of, the Open Offer Shares pursuant to the Lloyds Placing and Compensatory Open Offer, conditional or otherwise, nor have they consented to, nor indicated that they do not object to the Prospectus Listing Representation.

9. The Prospectus discloses that the Lloyds Placing and Compensatory Open Offer is conditional on Admission. The conditions to the Open Offer Agreement (as defined in the Prospectus) are (among other things) that Admission becomes effective by not later than 8.00 a.m. on 7 July 2009.

10. The Filer seeks permission to include the Prospectus Listing Representation in the Prospectus to be provided to or made available to prospective Ontario purchasers.

Based upon the representations above and the representations contained in the Letter, permission is hereby granted pursuant to subsection 38(3) of the Securities Act (Ontario) to include the Prospectus Listing Representation in the Prospectus to be provided to or made available to prospective Ontario purchasers.

Yours very truly,