Lloyds Banking Group Lifts Payouts and Guidance on Back of Strong 2025 Performance

Lloyds Banking ( (GB:LLOY) ) has provided an update.

Lloyds Banking Group reported strong unaudited results for 2025, marking continued progress in the second phase of its five-year strategic plan. Statutory profit before tax rose to £6.7 billion from £6.0 billion, supported by a 7% increase in net income to £18.3 billion, higher net interest income and other income, and disciplined cost control, despite higher operating expenses, remediation charges—particularly a £800 million provision for motor finance commission issues—and increased impairments. The bank delivered 5% growth in loans and advances to £481.1 billion and 3% deposit growth to £496.5 billion, while maintaining strong credit quality with an asset quality ratio of 17 basis points. Capital generation remained robust, with a pro forma CET1 ratio of 13.2% after allowing for a higher ordinary dividend and a planned £1.75 billion share buyback, taking total 2025 capital returns to about £3.9 billion and lifting tangible net asset value per share to 57.0 pence. Management highlighted £1.4 billion of annualised additional revenue from strategic initiatives in 2025, increased its target to about £2 billion by end-2026, and underscored ongoing cost savings of £1.9 billion since 2021, driven by transformation and scale efficiencies. For 2026, Lloyds has upgraded its guidance, now expecting underlying net interest income of about £14.9 billion, a cost:income ratio below 50%, a return on tangible equity above 16%, and capital generation of more than 200 basis points, signalling confidence in the culmination of its current strategy and reinforcing its positioning as a well-capitalised, high-return UK banking leader capable of sustaining attractive shareholder distributions.

The most recent analyst rating on (GB:LLOY) stock is a Buy with a £117.00 price target. To see the full list of analyst forecasts on Lloyds Banking stock, see the GB:LLOY Stock Forecast page.

Spark’s Take on GB:LLOY Stock

According to Spark, TipRanks’ AI Analyst, GB:LLOY is a Outperform.

Lloyds Banking Group’s overall score is driven by strong technical indicators and positive earnings call sentiment, indicating robust financial performance and strategic initiatives. However, challenges in financial performance, particularly in cash flow and leverage, slightly offset these positives. The valuation is fair, with a reasonable P/E ratio and attractive dividend yield.

To see Spark’s full report on GB:LLOY stock, click here.

More about Lloyds Banking

Lloyds Banking Group is a major UK-based financial services group with a diversified franchise spanning retail banking, commercial banking, and insurance, pensions and investments. The Group focuses on UK households and businesses, with a strategy centred on deepening customer relationships, expanding high-value business areas, and leveraging digital and AI capabilities to enhance efficiency and maintain a competitive edge in core banking and emerging technologies.

Average Trading Volume: 147,452,483

Technical Sentiment Signal: Buy

Current Market Cap: £60.52B

See more data about LLOY stock on TipRanks’ Stock Analysis page.