Lloyds beats estimates and lifts outlook as UK mortgage engine revs up

Lloyds Banking Group (NYSE:LYG) reported fourth-quarter net income of $1.87 billion (£1.48 billion) on Thursday, outperforming Wall Street’s cautious outlook as Britain’s housing market continues to defy recessionary fears.

The London-based bank posted earnings of 12 cents per share, surpassing the 11-cent consensus from analysts surveyed by Zacks Investment Research.

Total revenue net of interest expense reached $6.88 billion for the period, reflecting a widening net interest margin that reached 3.10% in the final three months of the year.

The strong quarterly finish capped a landmark fiscal 2025 in which the bank generated a total profit of $6.14 billion on revenue of $25.61 billion.

Despite booking nearly £1 billion in remediation charges related to a legacy motor-finance probe, Lloyds’ underlying performance was robust enough to support a 15% increase in its total dividend to 3.65 pence per share.

The bank also announced a new £1.75 billion share buyback program, bringing total capital returns for the year to approximately £3.9 billion.

Looking ahead, CEO Charlie Nunn upgraded the group's 2026 guidance, now projecting a return on tangible equity (RoTE) of greater than 16%, up from previous targets of 15%.