Lloyds Banking Group (LLOY) Q4 2025 earnings summary

Executive summary

• Achieved strong financial performance in 2025, meeting or exceeding guidance with robust growth across key business lines and strategic transformation momentum.

• Significant digital and AI advancements, with enhanced customer offerings and delivery of upgraded 2026 commitments.

• Upgraded 2026 guidance, reflecting confidence in continued income growth, operating leverage, and sustainable returns.

• Strong capital generation enabled a 15% dividend increase and a £1.75bn share buyback.

Financial highlights

• Net income reached £18.3bn, up 7% year-on-year; net interest income rose 6% to £13.6bn, and other income up 9% to £6.1bn.

• Statutory profit after tax for 2025 was £4.8bn, up 6% year-on-year; RoTE at 12.9% (14.8% excluding motor provision).

• Operating costs were £9.76bn, up 3% year-on-year; cost-income ratio at 58.6% (53.3% ex-remediation).

• Capital generation was 147bps (178bps ex-motor provision); CET1 ratio at 13.2%.

• Ordinary dividend increased 15% to £0.0365/share; £1.75bn share buyback announced.

Outlook and guidance

• Upgraded 2026 RoTE target to >16%; NII guidance of ~£14.9bn, with margin expansion and continued balance sheet growth.

• Cost-income ratio targeted below 50% in 2026; operating expenses to remain under £9.9bn.

• Capital generation expected to exceed 200bps in 2026; CET1 ratio to reach ~13% by end-2026.

• Basel 3.1 implementation in 2027 expected to reduce RWAs by £6–8bn.

• Committed to progressive and sustainable ordinary dividend policy.