LONDON, July 17, 2026, 10:22 BST
- Lloyds fell 2.2% to 110.17 pence at the open in London trading. The FTSE 100 slipped 0.25%.
- The average price for Thursday’s buyback was 112.2414 pence, 14.9% higher than the average in the first quarter.
- The stock traded at 1.90 times tangible net asset value as of March, a 15% premium to NatWest Group (LON:NWG).
Lloyds Banking Group LON:LLOY dropped 2.2% to 110.17 pence on Friday. However, its recent buyback price underscored a broader concern for investors.
The bank’s value has increased more quickly than the pace of its buyback economics. Lloyds traded at 1.90 times its March tangible net asset value, or TNAV.
This is roughly 15% higher than NatWest Group (LON:NWG). NatWest delivered a stronger return in the first quarter.
The premium increases expectations ahead of Lloyds’ July 30 strategy update. It indicates investors are looking for higher returns, bigger capital distributions, or both.
Lloyds cancelled 7 million shares, according to Thursday’s filing. The shares were repurchased at a volume-weighted average price of 112.2414 pence.
This was 14.9% higher than the Q1 average of 97.7 pence. As a result, each pound retired around 13% fewer shares.
The most recent repurchase price was 1.94 times March TNAV. Reducing the share count through buybacks can continue to boost earnings per share.
However, buying shares above TNAV reduces TNAV per share, assuming other factors are constant. Lloyds said the first-quarter buyback partially countered the increase in that metric.
| Bank | Price | Friday move | March TNAV/share | Price/TNAV | Q1 RoTE |
|---|---|---|---|---|---|
| Lloyds | 110.17p | down 2.20% | 57.9p | 1.90x | 17.0% |
| NatWest | 661.80p | down 0.42% | 400p | 1.65x | 18.2% |
Prices as of approximately 10:10 BST. Multiples based on reporter calculations using company data from March 31.
The difference in valuation stands out. Lloyds reported a Q1 RoTE of 17.0%, while NatWest posted 18.2%.
This does not demonstrate Lloyds is overvalued. Instead, it indicates the new strategy needs to support a higher multiple.
London trading was underway with the FTSE 100 slipping 0.25% to 10,546.28 at about 10:13 BST.
Risk appetite stayed subdued following a global selloff in chip stocks. Brent crude was on track for a weekly increase of over 10%, heightening inflation concerns.
Chief Executive Charlie Nunn stated in April: “We are confident in our delivery for the year ahead.” Lloyds is set to present its strategy alongside half-year results. Lloyds Banking Group
Investors are set to concentrate on medium-term RoTE, capital objectives, and the buyback strategy. A plan that matches present returns may not sustain the premium.
Risks persist. An extended oil shock may strain borrowers and push inflation higher. Uncertainty over the partially halted motor-finance scheme adds ambiguity to the timing of Lloyds’ £1.95 billion provision.
