Lloyds Banking Group Stock Near Record Highs: Latest LLOY Share Price, 2026 Forecasts and Key Risks (4 December 2025)

Updated: 4 December 2025 – Information only, not investment advice.

Lloyds share price today: LLOY hovering just below £1

Lloyds Banking Group plc (LSE: LLOY, NYSE: LYG) is ending 4 December 2025 trading within touching distance of a record zone that would have sounded fanciful at the start of the year.

As of the market close on 4 December, Hargreaves Lansdown quotes Lloyds at around 96.5p on the London Stock Exchange (sell 96.44p / buy 96.48p). ^[1]

On the latest data from the Financial Times and Hargreaves Lansdown, that puts the stock: ^[2]

Less than 2% below its 52‑week high of about 97.7p set earlier this week
Almost 80% above its 52‑week low around 52.4p in January
At a market capitalisation of roughly £56–57 billion

Multiple data providers put Lloyds on a trailing P/E in the mid‑teens (around 16x) and a forward P/E around 10–11x, with a price‑to‑book ratio near 1.2x – not the screaming “deep value” of a few years ago, but still a discount to many international peers. ^[3]

After years in the “value trap” penalty box, Lloyds has been one of the FTSE 100’s star performers in 2025. Analysis from TIKR and TechStock² suggests the shares are up around 55–60% year‑to‑date and roughly 80% over 12 months, driven by rising profits, buybacks and a friendlier regulatory backdrop. ^[4]

What’s new on 4 December 2025?

Several fresh developments over the past 24–48 hours matter for Lloyds’ share price story.

1. Daily buybacks continue near the highs

A new filing highlighted by TipRanks shows Lloyds bought back 9,845,337 of its own shares as part of its ongoing repurchase programme, at prices between 95.56p and 97.04p, with an average purchase price of 96.2883p. The bank plans to cancel these shares. ^[5]

In its Q3 2025 interim statement, Lloyds reported that by 30 September it had already repurchased about 1.8 billion shares, equivalent to £1.4 billion, under the 2025 buyback announced in February. ^[6]

Taken together, dividends plus buybacks amount to a high single‑digit percentage of market cap being returned to shareholders this year – a key part of the bullish case for LLOY.

2. Big US hedge fund trims LYG stake

On the US‑listed ADR, LYG, a fresh 13F‑type disclosure shows Arrowstreet Capital cut its stake by 30.8% in Q2, selling more than 10.2 million shares and leaving it with about 23.1 million shares (roughly 0.15% of the company), valued at just over $98 million. ^[7]

Despite the selling, MarketBeat notes that the ADR is still trading close to its 52‑week high around $5.15, with a market cap above $75 billion and a P/E ratio around 14–15x. ^[8]

Institutional flows like this matter more for sentiment than fundamentals, but they do tell you that some quant and hedge fund money is locking in gains after the 2025 rally.

3. Another buy‑side vote of confidence on LLOY

On the London line, analysts have spent the week nudging targets higher rather than downgrading:

JPMorgan raised its price target from 100p to 102p, keeping a neutral rating and implying around 5% upside from the high‑90s. ^[9]
A MarketBeat summary of recent research shows Royal Bank of Canada now at 110p (outperform), Jefferies at 105p (buy), and Keefe, Bruyette & Woods at 93p (outperform), while Citigroup sits at 97p (neutral). ^[10]

Across six London‑covering analysts, LLOY carries a “Moderate Buy” consensus with an average 12‑month target of 98.5p – only a couple of pence above where the shares trade today. ^[11]

That combination – bullish fundamentals but modest upside to published targets – explains why some commentators are asking whether the “easy money” has already been made.

4. Regulatory backdrop: BoE gets friendlier, FCA stays complicated

Two major UK regulatory stories from the last few days are particularly relevant:

The Bank of England announced that all major UK lenders – including Lloyds – comfortably passed its 2025 stress tests, even under a scenario involving deep recession, higher unemployment and property price falls. ^[12]
Almost simultaneously, the BoE said it would cut the benchmark Tier 1 capital requirement from 14% to 13%, the first easing in UK bank capital demands since the financial crisis, aiming to unlock more lending and potentially more shareholder returns over time. ^[13]

For a capital‑generative, domestically focused bank like Lloyds – reporting a CET1 ratio of 13.8% at 30 September 2025 – that’s a constructive shift. ^[14]

The flip side is the ongoing motor‑finance mis‑selling scandal:

The UK Supreme Court’s August ruling on hidden motor‑finance commissions significantly reduced worst‑case compensation estimates, a clear win for lenders. ^[15]
Even so, the Financial Conduct Authority (FCA) now envisages an industry‑wide redress bill in the £9–18 billion range, with a central estimate around £11 billion. ^[16]
In October, Lloyds raised its own provision for the scandal to £1.95 billion, taking an extra £800 million charge in Q3. ^[17]
On 3 December, the FCA confirmed it will lift the pause on handling motor‑finance complaints on 31 May 2026, two months earlier than initially planned, once the redress scheme is finalised. ^[18]

So the regulatory clouds have thinned, but they haven’t disappeared.

Under the bonnet: Q3 2025 results and fundamentals

Lloyds’ latest numbers help explain why the market is prepared to pay a higher multiple than in the past, even with legal noise in the background.

Earnings and profitability

In its Q3 2025 Interim Management Statement, Lloyds reported for the first nine months of 2025: ^[19]

Statutory profit before tax of £4.68 billion (down from £5.35bn a year earlier)
Profit after tax of £3.32 billion, equivalent to 4.8p earnings per share (vs 5.3p in 2024)
Underlying profit of £4.85 billion, lower year‑on‑year mainly because of motor‑finance remediation and higher loan‑impairment charges

On the positive side:

Net income for the period rose 6% to £13.56 billion
Underlying net interest income climbed to £10.11 billion, also up about 6%
The banking net interest margin (NIM) improved to roughly 3.04% over nine months, inching up to 3.06% in Q3 as Lloyds’ structural hedge offset mortgage margin pressure and deposit churn
Q3 underlying profit was £1.29 billion; excluding the motor‑finance charge, underlying profit actually rose 3% quarter‑on‑quarter

Return on tangible equity (RoTE) for the first nine months was 11.9%, or about 14.6% if you strip out the Q3 motor‑finance provision. Management now expects full‑year 2025 RoTE around 12% (14% ex‑motor) and capital generation of roughly 145 basis points, even after the big conduct charge. ^[20]

Balance sheet strength

The same Q3 update and accompanying presentations highlight: ^[21]

Customer deposits up £14.0 billion year‑to‑date to £496.7 billion
Loans and advances up £15–16 billion to about £477 billion, with growth in UK mortgages, credit cards, and European retail
Risk‑weighted assets at £232.3 billion, up £7.7bn year‑to‑date
CET1 ratio at 13.8%, despite the buyback and dividends
Tangible net asset value (TNAV) of 55.0p per share

Reuters’ coverage of the Q3 results framed 2025 as a “reset rather than crisis” year: underlying net interest income is still growing mid‑single‑digits, but heavy motor‑finance provisions and a higher cost‑of‑risk have forced a tweak to guidance. ^[22]

The BoE’s latest stress tests, where Lloyds and its peers passed with significant headroom, reinforce the impression that the balance sheet can absorb more litigation and a softer economy without derailing the dividend. ^[23]

Motor‑finance scandal: from existential fear to manageable headache?

For much of 2024–25, the big question around Lloyds was whether the motor‑finance mis‑selling saga would become “PPI 2.0” in terms of scale and duration.

A few key milestones have shifted that debate:

The Supreme Court’s August 2025 decision on hidden commissions sharply reduced worst‑case projections for the industry‑wide bill, prompting a relief rally in UK bank shares led by Lloyds. ^[24]
The FCA’s draft redress scheme, released in October, pitched an overall £9–18 billion range for compensation plus admin costs across lenders, with analysts converging around £11 billion as a central scenario – big, but lower than the “tens of billions” previously feared. ^[25]
Lloyds responded by lifting its motor‑finance provision to £1.95 billion, flagging that it will contest elements of the methodology but that the new estimate better reflects the FCA’s proposed approach. ^[26]
On 3 December, the FCA said it will unfreeze complaint handling from 31 May 2026, with consumers then having eight weeks for firms to respond and scope to escalate to the Financial Ombudsman Service. ^[27]

From an equity perspective, that mix of clearer rules, defined timelines and still‑healthy capital ratios explains why Lloyds can trade near all‑time highs despite the scandal. The risk hasn’t vanished – further provisions in 2026 are entirely possible – but the outcome now looks more like a large, contained cost than a franchise‑threatening shock.

Dividend outlook and total shareholder returns

Even with the share price near £1, part of the Lloyds appeal is still income.

Current yield and policy

At current levels around 96–97p, data from Hargreaves Lansdown implies a trailing dividend yield of roughly 3.3%, based on the latest ordinary dividend run‑rate. ^[28]

Lloyds has returned to a progressive dividend policy after the pandemic‑era suspension, with interim and final payouts stepping up as profits and capital generation have recovered. The bank also leans heavily on buybacks, which boost earnings per share and can support the stock in weak markets. ^[29]

Forecasts for 2025–26

An in‑depth dividend study from IG earlier this year collated analyst expectations for Lloyds’ ordinary dividends: ^[30]

2025: about 3.43p per share, implying a yield in the mid‑single digits on prices at the time of the report
2026: about 4.01p per share, a mid‑teens percentage increase and a higher implied yield

Those forecasts were based on Lloyds maintaining dividend cover of around 2x, supported by steady earnings and capital ratios comfortably above requirements.

Since then, the share price has run ahead of those earlier yield assumptions, but the underlying logic remains: Lloyds is being positioned as a steady income compounder, with dividends plus buybacks doing most of the heavy lifting for total return.

Motley Fool UK analysis this week suggested that, based on current consensus earnings and capital plans, a fresh investment today could plausibly deliver high single‑digit to low double‑digit total returns over the next 12 months – with one article modelling roughly 28% upside (including dividends) in a bullish scenario. ^[31]

That optimism is not universal, though, and several commentators explicitly flag that after an 80% rebound, future returns will likely be slower and bumpier.

Analyst and commentator views: can Lloyds push past £1 in 2026?

There’s a lively debate around whether Lloyds at ~96–97p is:

A late‑cycle trap with little upside and plenty of macro and regulatory downside, or
A still‑reasonable income stock where dividends and buybacks can keep compounding returns even if the share price does very little.

Broker targets

As of 4 December:

MarketBeat’s compilation of six London‑listing analysts shows a consensus 12‑month target of 98.5p, with a range from 84p (bearish) to 110p (bullish) and a “Moderate Buy” rating (3 Buy, 3 Hold, 0 Sell). ^[32]
Valuation dashboards from Investing.com and other platforms show a trailing P/E around 16x, forward P/E near 11x, price‑to‑book close to 1.2x, and analyst upside of only 2–4% on average from current levels. ^[33]

Put differently: the Street mostly likes Lloyds, but doesn’t see huge near‑term price appreciation from here.

Independent research and financial media

A wave of recent articles gives a flavour of the wider conversation:

TechStock² and other outlets frame Lloyds as “near record highs after BoE stress tests”, highlighting that stressed CET1 ratios remained well above regulatory minima and that no dividend cuts or capital raises are required under the modelled scenarios. TS2 Tech+2TS2 Tech+2
Another TechStock² piece on 1 December emphasised that Lloyds is trading close to its 52‑week high, with a trailing yield around 3.5% and a price‑to‑book ratio near 1.25x, and characterised the stock as a “re‑rated but still reasonably priced UK recovery play.” TS2 Tech
TIKR’s October deep‑dive argued that Lloyds’ 2025 rally (about 57% YTD) has been driven less by explosive growth and more by margin discipline, cost control and capital returns – and that, from here, returns will likely depend on the durability of mid‑teens RoTE and steady payouts rather than further multiple expansion. ^[34]
Other research – notably from Motley Fool UK – stresses the two‑way risk: with the share price less than 5–6% below the psychologically important £1 mark, one scenario sees a clean break higher, while another has the stock sliding back toward the mid‑70s pence if rates fall faster than expected or motor‑finance costs surprise on the upside. ^[35]

Overall, the tone across brokers and independent analysts is cautiously constructive: Lloyds is no longer obviously cheap, but it is still seen as a solid, income‑oriented UK bank with acceptable risk‑reward for investors who can tolerate domestic economic and regulatory swings.

Strategic moves: fraud prevention, trade digitisation and AI

Beyond the headline financials, Lloyds has been busy on the strategic front:

It has committed an extra £5 million to its fraud‑prevention initiatives, bringing total funding in this area to £15 million since 2021 and supporting partnerships with Age UK, Stop Scams UK and others. ^[36]
The group recently completed its first India–UK digital Letter of Credit on the WaveBL blockchain platform, a signal of its ambitions in digitising trade finance. ^[37]
In late November, Lloyds announced plans to launch what it calls the UK’s first large‑scale AI financial assistant, built into its retail banking channels. ^[38]
Subsidiary Scottish Widows is trialling AI tools from Adclear to improve advertising compliance and clarity – another example of Lloyds leaning hard into data and automation. ^[39]

These projects won’t move the earnings needle overnight, but they are relevant to the long‑term cost and revenue mix – especially as Lloyds continues to close branches and push customers toward digital channels.

Key risks investors are watching

Even fans of the stock acknowledge some obvious fault lines:

UK macro and housing risk
Lloyds is still essentially a geared play on the UK economy and housing market. A deeper‑than‑expected downturn, higher unemployment or a property correction would hit mortgage demand, impairments and consumer credit quality. ^[40]
Interest‑rate path and NIM pressure
The bank’s margin has benefited from the rate‑hike cycle and a large structural hedge. A faster pivot to lower rates – or intensified competition for deposits – could squeeze NIM and slow earnings growth. Management currently expects NIM to hover around 3.0–3.1%, but that is sensitive to BoE decisions. ^[41]
Motor‑finance redress uncertainty
While the Supreme Court ruling and FCA guidance have narrowed the range of outcomes, £1.95 billion is still an estimate, not a final bill. Adverse tweaks to the methodology, low participation assumptions proving too optimistic, or political pressure could all push costs higher. ^[42]
Valuation risk after a huge run
From the low‑50s in January to the high‑90s today, a lot of good news is now embedded in the price. With average sell‑side targets only a few pence above spot, any disappointment on earnings, capital or litigation could trigger a sharp pullback toward the 80s – or lower – even if the long‑term story remains intact. ^[43]
Regulatory and political noise
UK banking regulation is in flux again – capital buffers are being nudged down, but that could reverse if another crisis hits. Consumer‑protection politics around fees, mortgages and legacy issues also remain a structural source of risk. ^[44]

Is Lloyds Banking Group stock a buy, hold, or sell now?

What the market seems to be saying as of 4 December 2025 is roughly this:

The franchise is in better shape than at any point since the financial crisis.
Capital ratios are strong, NIM is healthy, credit quality is manageable, and Lloyds has re‑established itself as a dependable generator of cash with mid‑teens underlying returns on tangible equity. ^[45]
The balance of power with regulators is improving, but not risk‑free.
BoE stress‑test results and capital‑rule easing are clear positives; the motor‑finance saga is now a large but bounded problem, not an unquantifiable catastrophe. ^[46]
Most of the re‑rating has already happened.
Lloyds is no longer trading at half book with a mid‑single‑digit P/E. It’s now closer to 1.2x book and 10–11x forward earnings, with consensus price targets only slightly above the current share price. Returns from here are expected to come mainly from dividends and buybacks, not explosive growth. ^[47]

For income‑oriented investors who can live with UK‑domestic risk, Lloyds remains one of the cleanest high‑street bank plays: a big, boring, reasonably efficient machine that throws off cash and has finally escaped the value‑trap label. For more growth‑hungry investors, the stock at ~96–97p looks less obviously mispriced than it did a year ago.