London, May 28, 2026, 08:27 BST
- Lloyds shares slipped to around 101.4p, roughly 0.6% lower, but the stock continues to hover near the key £1 mark.
- Lloyds repurchased 5 million shares Wednesday and rolled out a fresh £500 million university retrofit lending partnership with the National Wealth Fund.
- Oil rose and stocks dropped worldwide as Gulf tensions hit markets, offsetting gains from Lloyds’ capital return.
Lloyds Banking Group shares fell at the open in London on Thursday, with the stock reversing some of its recent gains. Investors looked at a new buyback update and details of a £500 million government-backed loan program as global market sentiment turned softer.
Lloyds shares sat near 101.4 pence, off 0.6%, bouncing from 101.15p up to 101.75p. The stock stayed just above the £1 line, which investors watch as a sign of sentiment for UK banks.
Lloyds faces a timing crunch as it deals with two big drivers. On one side are capital returns for shareholders. On the other is macro risk, which can weigh on banks through more bad loans, weaker borrowers, or less demand for lending.
Lloyds said it bought 5 million ordinary shares after Wednesday’s close, using Goldman Sachs International, paying a volume-weighted average price of 101.8935p per share. The shares will be cancelled. The buyback is part of a plan announced in January, allowing the bank to repurchase up to £1.75 billion.
Lloyds said Thursday it will offer up to £500 million in lending for UK universities to improve energy efficiency and switch to low-carbon heating. The loans will be backed by as much as £350 million in guarantees from the National Wealth Fund. Lloyds says the funding could upgrade up to 300 campus buildings and help support 4,000 jobs.
Lloyds’ head of business and commercial banking Amanda Murphy said the deal is “unlocking targeted funding” for decarbonising university estates. National Wealth Fund CEO Oliver Holbourn called universities “a significant national asset.” Lloyds Banking Group
Lloyds shareholders aren’t looking at a big shake-up from this deal. The bank’s market cap stood at around £59.3 billion, according to the most recent AJ Bell data, and the retrofit lending joins an effort to expand into business where government guarantees support longer-term loans.
Lloyds, Barclays and NatWest were up Wednesday with UK stocks moving higher. Lower oil and hopes for more stability in the Middle East gave a lift. Barclays ended 0.60% higher, NatWest gained 0.54%, and Lloyds was up 0.49%. The FTSE 100 added 0.13%.
Markets turned on Thursday. Shares gave up recent gains while oil prices came back up as fighting in the Gulf spread. Brent and U.S. crude each rallied almost 4%, Reuters said. European futures slipped. High inflation for longer can help banks’ interest income, but also pushes up pressure on borrowers.
Lloyds’ latest numbers show why the rate story still matters to the market. The bank reported £2.025 billion in statutory pre-tax profit for the first quarter, up 33%. Underlying net interest income was £3.569 billion, 8% higher. Net interest income is the spread between what Lloyds makes on loans and securities and what it pays for deposits and funding. CEO Charlie Nunn said the group showed “sustained strength in financial performance.”
Lloyds stuck to its 2026 targets, repeating its outlook for underlying net interest income to top £14.9 billion, a cost-income ratio under 50%, and return on tangible equity above 16%. The cost-income ratio measures costs as a share of income.
The risk on the downside hasn’t gone away. Another oil shock would push up UK inflation and hit borrowers. Motor finance redress and credit costs are still unknowns. Morningstar senior equity analyst Niklas Kammer said rising credit costs were the key valuation risk for UK banks, adding Lloyds shares look “fairly valued” at his 97p fair value mark. global.morningstar.com
