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Lloyds Banking Group (LYG)
:LYG
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Lloyds Banking
(NYSE:LYG)
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Rating:64Neutral
Price Target:
$5.00
▲(11.61% Upside)
Lloyds Banking's overall stock score reflects a mixed financial performance with strong profitability but challenges in revenue growth and cash flow management. The technical analysis suggests bearish momentum, while the valuation is moderate with a reasonable dividend yield. The positive sentiment from the earnings call, including strategic growth initiatives and reaffirmed guidance, provides some optimism, but concerns about mortgage margins and asset quality remain significant risks.
Lloyds Banking (LYG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$67.11B
Dividend Yield3.67%
Average Volume (3M)8.04M
Price to Earnings (P/E)15.3
Beta (1Y)0.71
Revenue Growth-20.94%
EPS Growth-18.71%
CountryUS
Employees61,228
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.11
Shares Outstanding14,743,897,000
10 Day Avg. Volume10,127,607
30 Day Avg. Volume8,038,590
Financial Highlights & Ratios
PEG Ratio-0.48
Price to Book (P/B)0.74
Price to Sales (P/S)0.90
P/FCF Ratio-3.87
Enterprise Value/Market Cap2.39
Enterprise Value/Revenue4.26
Enterprise Value/Gross Profit4.26
Enterprise Value/Ebitda26.05
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Lloyds Banking Business Overview & Revenue Model
Company DescriptionLloyds Banking Group plc is a leading British financial services company headquartered in London, providing a wide range of banking and financial services primarily in the UK. The company operates through several segments, including Retail Banking, Commercial Banking, and Insurance, and offers products such as personal and business loans, mortgages, credit cards, savings accounts, investment services, and insurance solutions. With a strong emphasis on digital banking and customer service, Lloyds aims to serve millions of customers across various demographics and business sectors.
How the Company Makes MoneyLloyds Banking Group generates revenue primarily through interest income, fees, and commissions associated with its various banking products and services. The main revenue streams include net interest income from loans and mortgages, which constitutes a significant portion of their earnings, as they charge interest on the money they lend. Additionally, the bank earns fees from account maintenance, transaction services, and wealth management. The Insurance segment contributes further revenue through premiums collected from policyholders. Furthermore, strategic partnerships with fintech companies and investment in digital transformation enhance customer engagement and operational efficiency, contributing positively to the overall revenue.
Lloyds Banking Key Performance Indicators (KPIs)
Any
Net Interest Income by Segment
Shows how much income is generated from interest across different business segments, highlighting which areas are most profitable and sensitive to interest rate changes.
Shows how much income is generated from interest across different business segments, highlighting which areas are most profitable and sensitive to interest rate changes.
Data provided by:
Main Street Data
Main Street DataLloyds Banking Earnings Call Summary
Earnings Call Date:Jul 24, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 18, 2026
Earnings Call Sentiment Positive
The earnings call reflects a generally positive financial performance with strong revenue growth, increased dividends, and strategic initiative success. However, there are concerns about mortgage margin pressures, asset quality, and legal uncertainties in Motor Finance.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Lloyds Banking Group reported a statutory profit after tax of GBP 2.5 billion for the first half of 2025, with a return on tangible equity of 14.1%. Net income grew by 6% to GBP 8.9 billion.
Dividend Increase
The ordinary dividend was increased by 15% at the interim stage, reflecting continued improvement in shareholder distributions.
Growth in Strategic Initiatives
The group has delivered over GBP 1 billion in additional revenues from strategic initiatives on an annualized basis, with a target of GBP 1.5 billion by 2026.
Record Deposit Growth
Deposits increased by GBP 11.2 billion or 2% in the first half, reaching GBP 494 billion.
Operational Efficiency
Achieved GBP 300 million of gross cost savings in the first half, with a total of circa GBP 1.5 billion since 2021.
Negative Updates
Mortgage Margin Pressure
Completion margins in the mortgage book averaged around 70 basis points in Q2, slightly tighter than the previous quarter, with maturity margins higher at over 90 basis points.
Asset Quality Concerns
While asset quality remains robust, the H1 impairment charge was GBP 442 million, equating to an asset quality ratio of 19 basis points.
Uncertainty in Motor Finance
Ongoing legal uncertainties surrounding the Supreme Court ruling on Motor Finance and its potential implications for financial outcomes.
Structural Hedge Maturity
The structural hedge contribution is expected to fluctuate, with potential impacts on income growth.
Company Guidance
During Lloyds Banking Group's 2025 Half Year Results Call, the company reaffirmed its guidance for 2025, expressing confidence in meeting its 2026 commitments. The key financial metrics highlighted included a 15% increase in the interim ordinary dividend, a return on tangible equity of 14.1%, and capital generation of 86 basis points in the first half. The bank maintained its forecast for a cost-to-income ratio below 50% and capital generation of over 200 basis points by 2026. Net income increased by 6%, driven by a 9% rise in other operating income and continued momentum in net interest income, with the net interest margin improving to 304 basis points. The bank also reported GBP 8 billion in lending to first-time buyers and over GBP 1 billion in funding to the social housing sector, underpinning its strategic focus on sustainable growth areas such as housing, infrastructure, and pensions.Lloyds Banking Financial Statement Overview
Summary
Lloyds Banking shows strong profitability margins but faces challenges with declining revenue growth and liquidity issues. The balance sheet is stable with manageable debt levels, but cash flow metrics indicate potential risks due to negative free cash flow and inefficiencies in cash conversion.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 | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 37.61B | 37.61B | 18.41B | 20.77B | 18.71B | 18.69B |
| Gross Profit | 37.61B | 18.60B | 18.41B | 16.05B | 16.32B | 15.13B |
| EBITDA | 6.15B | 9.40B | 10.41B | 7.18B | 9.73B | 3.96B |
| Net Income | 4.65B | 4.42B | 5.46B | 3.83B | 5.78B | 1.32B |
Balance Sheet | ||||||
| Total Assets | 919.28B | 906.70B | 881.45B | 873.39B | 886.52B | 871.27B |
| Cash, Cash Equivalents and Short-Term Investments | 64.22B | 62.68B | 78.11B | 92.05B | 76.57B | 73.56B |
| Total Debt | 85.44B | 80.92B | 93.67B | 91.83B | 91.84B | 108.76B |
| Total Liabilities | 872.41B | 860.81B | 834.09B | 829.48B | 833.37B | 821.86B |
| Stockholders Equity | 46.72B | 45.72B | 47.16B | 43.67B | 52.92B | 49.18B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | -8.76B | 1.35B | 18.16B | 3.39B | 24.27B |
| Operating Cash Flow | 0.00 | -4.39B | 6.81B | 22.01B | 6.62B | 27.17B |
| Investing Cash Flow | 0.00 | -7.69B | -9.82B | 510.00M | -2.54B | -4.00B |
| Financing Cash Flow | 0.00 | -5.93B | -8.46B | -6.61B | -3.23B | -5.32B |
Lloyds Banking Technical Analysis
Positive
4.48
Price Trends
4.61
Positive
4.47
Positive
4.11
Positive
Market Momentum
<0.01
Positive
46.02
Neutral
13.57
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LYG, the sentiment is Positive. The current price of 4.48 is below the 20-day moving average (MA) of 4.75, below the 50-day MA of 4.61, and above the 200-day MA of 4.11, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 46.02 is Neutral, neither overbought nor oversold. The STOCH value of 13.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $73.33B | 12.07 | 11.31% | 3.50% | 1.79% | 30.93% | |
75 Outperform | $74.27B | 10.94 | 11.69% | 4.23% | 2.91% | 33.77% | |
74 Outperform | $74.83B | 10.18 | 19.90% | 6.13% | 11.82% | 3.41% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $58.18B | 12.20 | 7.98% | 4.57% | 22.02% | ― | |
64 Neutral | $67.11B | 15.33 | 7.85% | 3.67% | -20.94% | -18.71% | |
62 Neutral | $85.51B | 14.92 | 9.14% | 2.96% | -2.84% | 25.48% |
* Financial Sector Average
LYG
Lloyds Banking
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2.07
81.18%
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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.