Highlights

  • Lloyds shares are up 68.77% over the past year, trading at GBX 106.90
  • Redburn and Jefferies issued Buy ratings with target prices of GBX 130 and GBX 119
  • The bank announced GBP 3.9 billion in total capital returns for 2025, including dividends and buybacks

Shares of Lloyds Banking Group PLC (LSE:LLOY) traded higher on Thursday, rising 1.04% to GBX 106.90, extending the stock’s 12-month gain to 68.77%. Several brokers have reiterated positive ratings on the UK lender following the release of its full-year financial results, alongside updated guidance for 2026.

Brokers Maintain Buy Ratings with Higher Targets

Broker sentiment toward Lloyds remains supportive, with Rothschild & Co Redburn and Jefferies both issuing Buy ratings on the stock. Redburn has set a target price of 130 GBX, while Jefferies has assigned a target of 119 GBX, both above the current market price.

The broker views might follow Lloyds’ release of its full-year performance update, which outlined revenue growth across multiple business segments, higher shareholder distributions, and capital return initiatives, including a planned share buyback programme.

Full-Year Results Show Revenue and Earnings Growth

For the full year, Lloyds reported statutory profit before tax of GBP 6.7 billion, up from GBP 6.0 billion in the prior year. Underlying net interest income increased 6% year-on-year to GBP 13.6 billion, supported by a banking net interest margin of 3.06%, compared with 2.95% in the previous year.

Underlying other income rose 9% to GBP 6.1 billion, driven by increased customer activity and the contribution from strategic initiatives. Operating costs increased 3% to GBP 9.8 billion, reflecting investment spending, inflationary pressures, and business growth, partially offset by cost efficiency measures.

Capital Returns and Balance Sheet Position

Lloyds reported capital generation of 147 basis points, or 178 basis points excluding a third-quarter motor finance charge. The pro forma CET1 capital ratio stood at 13.2%, following dividend payments and share buybacks.

The Board recommended a final ordinary dividend of 2.43 pence per share, bringing the total dividend for 2025 to 3.65 pence per share, representing a 15% increase year-on-year. In addition, the bank announced an ordinary share buyback programme of up to GBP 1.75 billion, contributing to total capital returns of up to GBP 3.9 billion for the year.

2026 Guidance Outlined

Looking ahead, Lloyds guided for underlying net interest income of approximately GBP 14.9 billion in 2026, a cost-to-income ratio below 50%, and a return on tangible equity above 16%. The Group also expects capital generation to exceed 200 basis points, with the CET1 ratio trending toward 13.0%.

Lloyds Banking Group’s recent share price performance and broker target revisions follow the release of full-year results that outlined revenue growth, increased shareholder returns, and updated financial guidance for 2026. Broker attention remains focused on capital distribution plans and earnings outlook as the bank enters the next financial year.

FAQs

Why are brokers positive on Lloyds shares?
Brokers cited earnings growth, capital generation, and shareholder return plans following the bank’s full-year results and updated 2026 guidance.

What is Lloyds’ current share price and yearly performance?
Lloyds shares traded at 106.90 GBX, with a 68.77% gain over the past 12 months.

What capital returns has Lloyds announced?
The bank announced total capital returns of up to GBP 3.9 billion for 2025, including dividends and a GBP 1.75 billion share buyback programme.