Introduction

The traditional reflex for many UK investors looking at bank shares is to start and end with the FTSE 100 names – Lloyds Banking Group, Barclays, NatWest, HSBC and Standard Chartered. Yet across the wider global market, two faster-growing banks are increasingly grabbing the attention of UK investors: Brazilian digital giant Nu Holdings and London-listed Caucasus champion Lion Finance Group. Both have produced returns that dwarf those of mainstream UK banks in recent years, supported by strong franchises and underpenetrated markets. The question is whether either – or both – are better long-term buys than Lloyds for an investor focused on growth and total returns.

Why Lloyds is the benchmark

Lloyds is the obvious yardstick because it is the most widely held UK bank stock among private investors. The lender combines a leading position in UK mortgages, current accounts, Credit cards and insurance with a strong Balance Sheet and a generous Dividend policy. Combined with regular Buybacks, the group offers attractive total Shareholder returns.

But Lloyds is the textbook example of a mature, slow-growth bank. Earnings-per-share/">Earnings Per Share are likely to grow at modest rates, supported by the gradual Maturity of the structural hedge, ongoing cost discipline and Capital returns. It is unlikely to deliver the kind of Earnings expansion that fast-growing emerging market peers can.

Nu Holdings: a Fintech machine

Nu Holdings is the parent of Nubank, the largest digital bank in Latin America. It serves more than 100 million customers across Brazil, Mexico and Colombia and has redefined how banking is done in the region. Through a single mobile app, customers can access deposit accounts, Credit cards, personal loans, Investment products and insurance.

Three things stand out about Nu’s Business model:

  1. Low-cost digital infrastructure that supports very efficient unit Economics
  2. A customer-friendly approach that has driven rapid organic growth and high engagement
  3. Strong cross-selling, with average products per customer rising every year

The result has been a multi-year period of rapid Revenue growth, accelerating profitability, and growing returns on Equity that now rival those of mature global banks.

Lion Finance: a quietly compounding bank

Lion Finance Group, headquartered in Georgia, owns Bank of Georgia and Ameriabank in Armenia. Despite operating in two relatively small countries, it is a textbook example of a high-quality compounder. Its return on Equity has consistently exceeded 25%, and tangible Book Value per share has grown rapidly.

Georgia’s economy has been one of the fastest-growing in Europe in recent years, supported by tourism, regional financial inflows, and improving institutions. Armenia’s economy is also growing rapidly, with a young population, increasing financial inclusion, and modernising regulatory frameworks. Both economies remain under-banked compared to Western standards, leaving plenty of room for organic Loan and deposit growth.

Lion Finance has translated this opportunity into Earnings growth, rising dividends and share Buybacks – an unusual combination for a fast-growing emerging market bank.

Growth comparison

Comparing growth across the three banks is striking. Lloyds is forecast to grow Earnings at low single-digit rates. Nu Holdings is expected to grow at high teens to thirties for several years, supported by Mexico expansion and continued Brazilian penetration. Lion Finance is expected to grow at strong double-digit rates, supported by domestic Credit expansion, ongoing financial deepening, and Armenian growth.

Even allowing for forecast risk, the gap is large. Investors looking for compounding Earnings growth will find more of it outside the UK.

Profitability and Capital efficiency

Lloyds achieves return on tangible Equity in the low-to-mid teens in good years. That is respectable for a UK retail bank but not exceptional globally.

Nu Holdings has rapidly improved its returns and is now generating profitability metrics in the high teens or higher.

Lion Finance’s return on Equity is consistently in the mid-twenties, occasionally higher, supported by strong margins and disciplined cost management.

Capital returns

Capital returns are an important contrast. Lloyds returns most of its Capital to shareholders through dividends and Buybacks. Nu Holdings reinvests most of its profits into growth, making it unsuitable for income-focused investors. Lion Finance is unusual in delivering a high Dividend Yield, regular Buybacks and significant retained Earnings funding growth.

Valuation

Lloyds is cheap on classic valuation metrics, with a low price-to-Earnings ratio and a competitive Yield. Nu Holdings, having delivered strong growth, trades at a premium that reflects its profile. Lion Finance is unusual in offering both growth and a low valuation, partly because the market discounts the geopolitical risk of operating in the Caucasus.

For value-conscious growth investors, Lion Finance’s mix is unusual and potentially attractive.

Risks: the trade-off behind the growth

There is no free lunch in investing. The reasons Nu Holdings and Lion Finance can grow faster than Lloyds are also the sources of their risks.

Nu Holdings’ growth depends on Latin American macroeconomic stability, Brazilian regulation, currency stability, and continued execution. Brazil has historically experienced high Inflation, currency Volatility, and political turbulence. Any major Reversal could affect Nu’s Loan book and customer behaviour.

Lion Finance is exposed to Caucasus political risk, including regional tensions and proximity to volatile neighbouring countries. The Georgian and Armenian economies are small relative to global benchmarks, and external shocks can have outsized effects.

Lloyds, by contrast, faces UK political, regulatory and economic risk, but in a much more mature and stable environment.

Recent share price performance

Lloyds shares have rerated higher in 2024 and 2025, supported by improving Capital returns and modest macro tailwinds.

Nu Holdings has been one of the best-performing global financial stocks of recent years, although its share price has had bouts of Volatility.

Lion Finance has more than doubled from its 2022 lows, although it remains far less widely followed than Lloyds.

Could they be better buys than Lloyds?

For investors prioritising growth, the answer is arguably yes – with caveats.

Nu Holdings and Lion Finance offer rates of Earnings growth Lloyds simply cannot match. Their long-run returns on Equity are higher, their addressable markets are growing faster, and their share prices have already produced substantial gains.

But Lloyds offers something they cannot: stability. UK retail banking is mature, regulated and predictable. For income investors, Lloyds shares remain a strong income-focused choice.

A blend may be the most sensible approach for many investors, with Lloyds providing the income foundation and Nu Holdings or Lion Finance adding growth.

Considerations for UK investors

Tax, custody and platform support all matter. Lloyds is straightforward to hold in an ISA or SIPP. Nu Holdings is US-listed and may require a W-8BEN form to reduce Withholding tax. Lion Finance is London-listed and broadly straightforward, although its underlying operations are foreign.

Position sizing also matters. Faster-growing emerging market banks should typically form a smaller share of a portfolio than mature, lower-Volatility banks.

Conclusion

Lloyds is unlikely to disappoint as a long-term income holding, but it is not designed to deliver the kind of growth that Nu Holdings and Lion Finance offer. Both international banks combine high returns on Equity, strong franchises and meaningful growth runways. Lion Finance also adds an income angle, making it particularly interesting. Whether they are better buys than Lloyds depends on the investor’s goals, but for those open to international Diversification and willing to accept additional risk, both deserve serious consideration alongside the FTSE 100 favourite.