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Lloyds Banking Group Plc (LYG)
NYSE:LYG
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Lloyds Banking
(NYSE:LYG)76Outperform
Lloyds Banking (LYG) vs. S&P 500 (SPY)
Market Cap
$55.31B
Dividend Yield3.96%
Average Volume (3M)31.17M
Price to Earnings (P/E)11.9
Beta (1Y)0.98
Revenue Growth36.29%
EPS Growth-19.79%
CountryUS
Employees62,569
SectorFinancial
Sector Strength93
IndustryBanking
Share Statistics
EPS (TTM)0.32
Shares Outstanding15,186,805,000
10 Day Avg. Volume65,294,887
30 Day Avg. Volume31,174,191
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.96
Price to Cash Flow (P/CF)-7.60
P/FCF Ratio5.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
Lloyds Banking Business Overview & Revenue Model
Company DescriptionLloyds Banking Group plc (LYG) is a leading British financial institution, headquartered in London, United Kingdom. It operates primarily in the banking and financial services sectors, offering a wide range of products and services including personal and commercial banking, insurance, and wealth management. The group owns several well-known banking brands such as Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows, which serve millions of customers through a network of branches and digital platforms.
How the Company Makes MoneyLloyds Banking Group generates revenue through a diversified model comprising several key streams. The primary source is net interest income, which is derived from the difference between interest earned on loans and advances to customers and the interest paid on deposits and borrowings. Additionally, the group earns fee-based income from services such as account maintenance, transaction processing, and advisory services. Lloyds also benefits from its insurance division, which provides life, pension, and general insurance products, contributing significantly to its earnings. The wealth management segment further adds to revenue through investment and asset management services. Strategic partnerships and collaborations, particularly in digital banking and financial technology, also play a role in enhancing the group's service offerings and expanding its customer base.
Lloyds Banking Financial Statement Overview
Summary
Lloyds Banking's financial performance is mixed. Strong profitability margins are offset by declining revenue growth. The balance sheet is stable, but cash flow metrics reveal liquidity challenges. Overall, the company is solid but needs to address revenue growth and cash flow conversion.Income Statement
Lloyds Banking showed a mixed income performance. The gross and net profit margins for 2024 were strong at 25.15% and 3.52% respectively, indicating efficiency in cost management. However, a revenue growth decline of 4.58% compared to 2023 suggests challenges in maintaining top-line growth. The EBIT margin remained robust at 100% due to the nature of banking revenue recognition. Nonetheless, the lack of EBITDA data limits comprehensive profitability analysis.68
Positive
Balance Sheet
The balance sheet reflects a stable structure with a moderate debt-to-equity ratio of 1.77 in 2024, showing manageable leverage. The equity ratio at 5.04% and a return on equity of 9.67% suggest a cautious but steady approach to capital utilization. Cash reserves decreased significantly, impacting liquidity positions, but overall, the company maintains a solid asset base.72
Positive
Cash Flow
Cash flow metrics highlight some concerns. The free cash flow turned negative in 2024, indicating cash management challenges. The operating cash flow to net income ratio was negative, showcasing inefficiencies in converting income into cash. Free cash flow to net income ratio was also negative, further emphasizing liquidity strains. This signals potential risks if cash flow management does not improve.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 17.57B | 18.41B | 23.00M | 16.32B | 15.13B | Gross Profit |
| 17.57B | 19.21B | 23.00M | 16.32B | 15.13B | EBIT |
| 17.57B | 11.05B | 10.52B | 6.80B | 1.16B | EBITDA |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| 4.42B | 5.46B | 5.46B | 5.78B | 1.32B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 62.68B | 139.41B | 91.63B | 76.57B | 73.56B | Total Assets |
| 906.70B | 881.45B | 877.83B | 886.52B | 871.27B | Total Debt |
| 80.92B | 93.67B | 84.55B | 84.66B | 101.66B | Net Debt |
| 18.24B | 14.65B | -7.08B | 8.09B | 28.10B | Total Liabilities |
| 860.81B | 834.09B | 830.31B | 84.66B | 101.66B | Stockholders Equity |
| 45.72B | 47.16B | 47.28B | 52.92B | 49.18B |
| Cash Flow | Free Cash Flow | |||
| -8.76B | 1.35B | 18.16B | 3.39B | 24.27B | Operating Cash Flow |
| -4.39B | 6.81B | 22.01B | 6.62B | 27.17B | Investing Cash Flow |
| -7.69B | -9.82B | 510.00M | -2.54B | -4.00B | Financing Cash Flow |
| -5.93B | -8.46B | -6.61B | -3.23B | -5.32B |
Lloyds Banking Technical Analysis
Positive
3.90
Price Trends
3.03
Positive
2.95
Positive
2.93
Positive
Market Momentum
0.20
Negative
81.20
Negative
87.57
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LYG, the sentiment is Positive. The current price of 3.9 is above the 20-day moving average (MA) of 3.34, above the 50-day MA of 3.03, and above the 200-day MA of 2.93, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 81.20 is Negative, neither overbought nor oversold. The STOCH value of 87.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LYG.
Lloyds Banking Risk Analysis
Lloyds Banking disclosed 33 risk factors in its most recent earnings report. Lloyds Banking reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lloyds Banking Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $208.45B | 9.68 | 12.96% | 5.02% | 6.79% | 8.57% | |
81 Outperform | $53.65B | 8.53 | 8.78% | 2.62% | 8.58% | 35.39% | |
77 Outperform | $94.96B | 7.65 | 11.61% | 2.36% | 11.61% | 24.35% | |
76 Outperform | $55.31B | 11.89 | 9.67% | 3.96% | 36.29% | -19.79% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
LYG
Lloyds Banking
3.90
1.58
68.10%
BCS
Barclays
16.24
7.64
88.84%
HSBC
HSBC Holdings
61.58
25.98
72.98%
SAN
Banco Santander SA
6.64
2.57
63.14%
Lloyds Banking Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: 24.20% | Next Earnings Date: Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a robust financial performance in 2024 with strong shareholder distributions and strategic initiative achievements. However, the provision for motor finance commissions and ongoing cost pressures present challenges. The company's strategic progress and financial guidance for 2025 and beyond are positive, but uncertainties remain regarding specific legal and regulatory outcomes.Highlights
Strong Financial Performance in 2024
Lloyds Bank & Group delivered a robust financial performance in Q4 and 2024, with a statutory profit after tax of £4.5 billion and £5 billion excluding the Q4 motor provision. This equates to a return on tangible equity of 12.3%, or 14% ex-motor.
Significant Shareholder Distributions
The company announced a 15% increase in the ordinary dividend and a share buyback of £1.7 billion, distributing a total of up to £3.6 billion, around 9% of the market cap.
Record Mortgage Lending Growth
Mortgage book grew by £6.1 billion in 2024, or £8 billion excluding legacy book securitizations. The company achieved a 20% share of new lending, around 1 percentage point ahead of stock share.
Strategic Initiatives Exceed Expectations
The company delivered £0.8 billion of additional revenues from strategic initiatives, ahead of the £0.7 billion target, and realized £1.2 billion of gross cost savings.
Deposit Growth and Structural Hedge Benefits
Total deposits were up by over £11 billion, or 2%, to £483 billion. The structural hedge income was £4.2 billion, £0.8 billion higher than 2023, with further growth expected.
Lowlights
Motor Finance Commission Provision
An additional £700 million provision was taken for potential remediation costs relating to motor commission arrangements, totaling £1.15 billion, due to a recent Court of Appeal judgment.
Cost and Inflation Pressures
Operating costs were £9.4 billion in 2024, up 3% year-on-year, in line with guidance but higher than desired due to inflationary pressures and ongoing investments.
Asset Quality Ratio Increase
The asset quality ratio is expected to be circa 25 basis points for 2025, up from the low 10 basis points in 2024, due to the absence of MES benefits and some underlying cost pressures.
Company Guidance
In the call discussing the 2024 fiscal year results, Lloyds Banking Group reported strong financial performance, aligning with their guidance. Key metrics included a 15% increase in the ordinary dividend and a £1.7 billion share buyback, despite a £700 million provision for Motor finance commissions in Q4. The Group achieved a statutory profit after tax of £4.5 billion, or £5 billion excluding the motor provision, indicating a return on tangible equity of 12.3% or 14% ex-motor. Net income for the year reached £17.1 billion, with a net interest margin of 2.95%. Operating costs were £9.4 billion, up 3% year-on-year. The Group also generated capital of 148 basis points, or 177 basis points excluding the motor provision. For 2025, Lloyds expects net interest income to grow to around £13.5 billion, with a continued focus on cost management and strategic initiatives to drive further revenue growth. Their guidance for 2026 includes maintaining a cost-income ratio below 50% and achieving a return on tangible equity greater than 15%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.