London, Jan 31, 2026, 08:04 GMT — Market closed
- Lloyds closed Friday at 108.95 pence, climbing 3.32% to hit a fresh 52-week high
- The bank kicked off a share buyback following an increase to its crucial 2026 profitability target
- Upcoming events: Bank of England’s decision on Feb. 5, followed by Lloyds’ annual report on Feb. 18
Lloyds Banking Group (LLOY.L) shares ended Friday at 108.95 pence, climbing 3.32% and hitting a new 52-week peak. Trading volume reached roughly 158 million shares, according to market figures. (Hargreaves Lansdown)
London markets are closed for the weekend, so Monday’s open will reveal if the recent jump was just a one-day squeeze or the beginning of a fresh upward trend following the start of earnings season for UK banks.
Why it matters now: Lloyds serves as a key indicator for UK household credit, particularly mortgages. Investors are keen to gauge how earnings could shift if interest rates ease and competition in home loans remains fierce.
Conduct risk remains a hot topic. Lloyds has already absorbed losses linked to Britain’s motor finance mis-selling scandal, and traders are watching closely for any indication the fallout could widen.
On Thursday, Lloyds reported a 12% jump in profit before tax for 2025, reaching £6.7 billion—beating expectations. The bank now forecasts its return on tangible equity, which excludes goodwill and intangibles, to surpass 16% in 2026. Alongside this, Lloyds revealed a £1.75 billion share buyback. CEO Charlie Nunn attributed the upgraded guidance to “continued business momentum.” (Reuters)
A filing on Friday revealed that the buyback is underway. Lloyds purchased 10 million ordinary shares, paying between 107.35 pence and 108.70 pence per share, and plans to cancel them. (TradingView)
Lloyds’ jump came amid a wider rally in UK banks. On Friday, the banking sub-index climbed 1.6%, with Lloyds leading gains on the FTSE 100, which ended 0.5% higher. Over the week, bank stocks gained 3.5%, and they’ve surged 5.3% so far this month. “The weaker pound is obviously beneficial for the multinationals,” said Fiona Cincotta, senior market analyst at City Index. (Reuters)
Rates are still in the spotlight. The Bank of England plans to reveal its next move on Thursday, Feb. 5, following its December decision to slash the Bank Rate to 3.75%. (Bank of England)
For Lloyds, even slight changes in the rate outlook matter fast. While lower rates can gradually pinch lending margins, they also ease the burden on borrowers, boosting demand for refinancing and new mortgages.
Yet the upside scenario carries risks: rising motor finance compensation costs might drain capital and curb buybacks. A steeper-than-anticipated fall in rates would also challenge the bank’s ability to balance margin pressure through fees and cost reductions.
Investors are eyeing Feb. 18, the day Lloyds will release its 2025 annual report and accounts, shedding light on capital levels, risk factors, and plans for share buybacks. (Lloydsbankinggroup)
