Lloyds Banking Group PLC
🇬🇧 LLOY.LSE · London · GB0008706128
Bank
GBX 99.83 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
14.2
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 99.83 ÷ 7.02 = 14.2
TTM period through: 2026-03-31
Forward P/E (estimated): 8.3
Based on analyst estimates
Reference: Provider P/E (Trailing): 12.5
Yield (Fwd)
4.01%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 3.68%
Div. Growth (5Y CAGR)
39.2%
Growth Streak
5 yrs
Consecutive years of increase
Net Debt/EBITDA (TTM)
5.8x
Latest quarter: 19.1x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-03-31
Latest quarter (2026-03-31): 19.1x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
57.0%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 47.7%
Cash Flow Payout (TTM): 45.1%
FCF Coverage (TTM): -0.32x
ROE
10.8%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
Summary
Lloyds Banking Group is a dominant UK retail bank offering a sustainable dividend and robust shareholder returns through aggressive share buybacks. The market is currently discounting the stock due to the £1.95B provision for the FCA motor finance review, presenting a classic temporary problem that doesn't structurally impair its core mortgage franchise. Worth considering for new positions at current levels around 99 GBX (forward P/E 8.3, 3.7% yield), offering an attractive combination of value and income with strong fundamentals while awaiting regulatory resolution.
Sector Context
Lloyds Banking Group is a dominant UK retail and commercial bank, generating income primarily through lending (mortgages, business loans) and deposits. In the banking sector, elevated Debt/Equity metrics (like Lloyds' 2.1x) are a normal feature of the business model, as customer deposits are accounted for as liabilities; conservative payout ratios and Return on Equity (ROE) >10% are better indicators of a bank's dividend sustainability.
Temporary Opportunity Identified
The bank faces a massive £1.95 billion to £2 billion provision related to the FCA's historical motor finance (Black Horse) mis-selling review. This is a one-time regulatory and litigation hit that is depressing current valuation multiples but does not structurally impair the core UK mortgage and retail banking franchise.
📊 Strategy Analysis
- • Trading at an attractive valuation with a TTM P/E of 14.2 and a forward P/E of 8.3, well within the target range for value accumulation.
- • Shareholder returns are robust, supported by a secure 3.68% yield (48% payout ratio) and a substantial ongoing £1.75 billion share buyback program.
- • Strong fundamental profitability for a bank, demonstrated by an ROE of 10.78% and consistent earnings growth over the past 8 quarters.
- • The 2020 dividend cut (-80%) was a mandated, temporary sector-wide regulatory pause (PRA directive), not a structural failure of the business model.
⚠ What to Watch
- • The ongoing FCA review into historical motor finance mis-selling (Black Horse) has required a massive £1.95 billion to £2 billion provision, creating near-term earnings drag and litigation risk.
- • Heavy concentration in the domestic UK market exposes the bank to local regulatory shifts, including potential increases in the UK Bank Surcharge tax.
- • Reliance on complex legacy core banking IT infrastructure has led to disruptive customer app outages and requires continuous, capital-intensive modernization.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-06-06
Disclaimer: This information is for educational purposes only. Not financial advice.