Credit Risk: The risk that borrowers will default on their loans, leading to financial losses for the bank, particularly given its large UK mortgage and SME lending portfolio which is sensitive to economic downturns and unemployment rates.

Market Risk: The risk of losses arising from adverse movements in market prices, such as interest rates, equity prices, and foreign exchange rates, with Lloyds being highly sensitive to changes in UK interest rates impacting its net interest margin.

Operational Risk: The risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events, including cyberattacks, IT failures, fraud, and human error, which can cause significant financial and reputational damage.