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Lloyds Banking Group Plc (LYG)
NYSE:LYG
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Lloyds Banking
(NYSE:LYG)
Rating:72Outperform
Price Target:
$4.50
▲(11.66%Upside)
Lloyds Banking (LYG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$62.83B
Dividend Yield4.89%
Average Volume (3M)17.16M
Price to Earnings (P/E)13.2
Beta (1Y)0.81
Revenue Growth-2.65%
EPS Growth-14.84%
CountryUS
Employees61,228
SectorFinancial
Sector Strength79
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.08
Shares Outstanding15,005,987,000
10 Day Avg. Volume13,266,021
30 Day Avg. Volume17,162,949
Financial Highlights & Ratios
PEG Ratio-1.94
Price to Book (P/B)3.70
Price to Sales (P/S)0.00
P/FCF Ratio22.48
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering0
Lloyds Banking Business Overview & Revenue Model
Company DescriptionLloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom. It operates through three segments: Retail; Commercial Banking; and Insurance and Wealth. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal and small business customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, debt financing, and debt capital market services to small and medium-sized entities, corporates, and financial institutions. The Insurance and Wealth segment offers insurance, investment and wealth management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows brands. Lloyds Banking Group plc was founded in 1695 and is based in London, the United Kingdom.
How the Company Makes MoneyLloyds Banking Group generates revenue through several key streams. Firstly, its retail banking segment offers personal banking services such as current and savings accounts, personal loans, mortgages, and credit cards, earning interest income and fees from these products. Secondly, its commercial banking division provides services to businesses, including lending, transaction banking, and risk management solutions, contributing interest and fee income. Furthermore, the group has a significant insurance arm, Scottish Widows, which provides life, pensions, and general insurance products, generating premium income and investment returns. Lloyds also earns income through wealth and investment management services, offering financial planning, investment advice, and portfolio management to high-net-worth individuals. The company's extensive network and digital platforms enhance its service delivery, while strategic partnerships and a strong focus on customer service and innovation support its overall profitability.
Lloyds Banking Earnings Call Summary
Earnings Call Date:Feb 20, 2025
(Q4-2024)
| % Change Since: 32.13%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a robust financial performance in 2024 with strong shareholder distributions and strategic initiative achievements. However, the provision for motor finance commissions and ongoing cost pressures present challenges. The company's strategic progress and financial guidance for 2025 and beyond are positive, but uncertainties remain regarding specific legal and regulatory outcomes.Q4-2024 Updates
Positive Updates
Strong Financial Performance in 2024
Lloyds Bank & Group delivered a robust financial performance in Q4 and 2024, with a statutory profit after tax of £4.5 billion and £5 billion excluding the Q4 motor provision. This equates to a return on tangible equity of 12.3%, or 14% ex-motor.
Significant Shareholder Distributions
The company announced a 15% increase in the ordinary dividend and a share buyback of £1.7 billion, distributing a total of up to £3.6 billion, around 9% of the market cap.
Record Mortgage Lending Growth
Mortgage book grew by £6.1 billion in 2024, or £8 billion excluding legacy book securitizations. The company achieved a 20% share of new lending, around 1 percentage point ahead of stock share.
Strategic Initiatives Exceed Expectations
The company delivered £0.8 billion of additional revenues from strategic initiatives, ahead of the £0.7 billion target, and realized £1.2 billion of gross cost savings.
Deposit Growth and Structural Hedge Benefits
Total deposits were up by over £11 billion, or 2%, to £483 billion. The structural hedge income was £4.2 billion, £0.8 billion higher than 2023, with further growth expected.
Negative Updates
Motor Finance Commission Provision
An additional £700 million provision was taken for potential remediation costs relating to motor commission arrangements, totaling £1.15 billion, due to a recent Court of Appeal judgment.
Cost and Inflation Pressures
Operating costs were £9.4 billion in 2024, up 3% year-on-year, in line with guidance but higher than desired due to inflationary pressures and ongoing investments.
Asset Quality Ratio Increase
The asset quality ratio is expected to be circa 25 basis points for 2025, up from the low 10 basis points in 2024, due to the absence of MES benefits and some underlying cost pressures.
Company Guidance
In the call discussing the 2024 fiscal year results, Lloyds Banking Group reported strong financial performance, aligning with their guidance. Key metrics included a 15% increase in the ordinary dividend and a £1.7 billion share buyback, despite a £700 million provision for Motor finance commissions in Q4. The Group achieved a statutory profit after tax of £4.5 billion, or £5 billion excluding the motor provision, indicating a return on tangible equity of 12.3% or 14% ex-motor. Net income for the year reached £17.1 billion, with a net interest margin of 2.95%. Operating costs were £9.4 billion, up 3% year-on-year. The Group also generated capital of 148 basis points, or 177 basis points excluding the motor provision. For 2025, Lloyds expects net interest income to grow to around £13.5 billion, with a continued focus on cost management and strategic initiatives to drive further revenue growth. Their guidance for 2026 includes maintaining a cost-income ratio below 50% and achieving a return on tangible equity greater than 15%.Lloyds Banking Financial Statement Overview
Summary
Lloyds Banking presents a mixed financial performance. The income statement shows strong profitability margins but declining revenue growth. The balance sheet is stable, with manageable debt levels and a cautious equity strategy. However, cash flow metrics reveal liquidity challenges, highlighting the need for improved cash management. Overall, the company remains solid but needs to address revenue growth and cash flow conversion to strengthen its financial standing.Income Statement
Lloyds Banking showed a mixed income performance. The gross and net profit margins for 2024 were strong at 25.15% and 3.52% respectively, indicating efficiency in cost management. However, a revenue growth decline of 4.58% compared to 2023 suggests challenges in maintaining top-line growth. The EBIT margin remained robust at 100% due to the nature of banking revenue recognition. Nonetheless, the lack of EBITDA data limits comprehensive profitability analysis.68
Positive
Balance Sheet
The balance sheet reflects a stable structure with a moderate debt-to-equity ratio of 1.77 in 2024, showing manageable leverage. The equity ratio at 5.04% and a return on equity of 9.67% suggest a cautious but steady approach to capital utilization. Cash reserves decreased significantly, impacting liquidity positions, but overall, the company maintains a solid asset base.72
Positive
Cash Flow
Cash flow metrics highlight some concerns. The free cash flow turned negative in 2024, indicating cash management challenges. The operating cash flow to net income ratio was negative, showcasing inefficiencies in converting income into cash. Free cash flow to net income ratio was also negative, further emphasizing liquidity strains. This signals potential risks if cash flow management does not improve.55
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 18.60B | 18.41B | 20.77B | 18.71B | 18.69B |
| Gross Profit | 17.50B | 18.41B | 16.05B | 16.32B | 15.13B |
| EBITDA | 9.40B | 10.41B | 7.17B | 9.72B | 3.96B |
| Net Income | 4.42B | 5.46B | 3.83B | 5.78B | 1.32B |
Balance Sheet | |||||
| Total Assets | 906.70B | 881.45B | 877.83B | 886.52B | 871.27B |
| Cash, Cash Equivalents and Short-Term Investments | 62.68B | 139.41B | 91.63B | 76.57B | 73.56B |
| Total Debt | 80.92B | 93.67B | 84.55B | 84.66B | 101.66B |
| Total Liabilities | 860.81B | 834.09B | 830.31B | 84.66B | 101.66B |
| Stockholders Equity | 45.72B | 47.16B | 47.28B | 52.92B | 49.18B |
Cash Flow | |||||
| Free Cash Flow | -8.76B | 1.35B | 18.16B | 3.39B | 24.27B |
| Operating Cash Flow | -4.39B | 6.81B | 22.01B | 6.62B | 27.17B |
| Investing Cash Flow | -7.69B | -9.82B | 510.00M | -2.54B | -4.00B |
| Financing Cash Flow | -5.93B | -8.46B | -6.61B | -3.23B | -5.32B |
Lloyds Banking Technical Analysis
Neutral
4.03
Price Trends
4.08
Negative
3.79
Positive
3.30
Positive
Market Momentum
0.02
Positive
41.66
Neutral
63.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LYG, the sentiment is Neutral. The current price of 4.03 is below the 20-day moving average (MA) of 4.18, below the 50-day MA of 4.08, and above the 200-day MA of 3.30, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 41.66 is Neutral, neither overbought nor oversold. The STOCH value of 63.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LYG.
Lloyds Banking Risk Analysis
Lloyds Banking disclosed 33 risk factors in its most recent earnings report. Lloyds Banking reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lloyds Banking Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $73.48B | 13.11 | 11.15% | 3.32% | 3.07% | 19.01% | |
75 Outperform | $71.30B | 11.33 | 11.50% | 4.42% | 2.19% | 34.00% | |
74 Outperform | $69.05B | 9.66 | 20.65% | 8.02% | -6.74% | 5.13% | |
72 Outperform | $62.83B | 13.21 | 8.73% | 4.89% | -2.65% | -14.84% | |
70 Outperform | $55.80B | 12.56 | 0.10% | 4.84% | -27.31% | ― | |
67 Neutral | $16.85B | 11.65 | 9.71% | 3.90% | 11.61% | -9.60% | |
65 Neutral | $70.19B | 12.23 | 8.45% | 2.31% | 13.63% | 27.77% |
* Financial Sector Average
Performance Comparison
LYG
Lloyds Banking
4.03
1.33
49.26%
TFC
Truist Financial
44.20
7.16
19.33%
ITUB
Itau Unibanco
6.81
1.75
34.58%
MFG
Mizuho Financial
5.59
1.27
29.40%
PNC
PNC Financial
195.71
43.57
28.64%
USB
US Bancorp
47.49
9.69
25.63%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.