Lloyds Banking Group Expects Income Growth to Continue

By Elena Vardon

Lloyds Banking Group said it expects its income to continue growing this year, supported by loan volumes and its structural hedge, boosting profitability.

The U.K.'s largest mortgage provider on Thursday guided for around 14.9 billion pounds ($20.57 billion) in net interest income--the difference between what banks earn on loans and pay out on deposits--for 2026, after reporting a 6% increase to 13.635 billion pounds for 2025.

The bank, like its peers, has structural hedges in place to mitigate the impact of interest-rate moves by the Bank of England, allowing it to continue to benefit from tailwinds in an environment of falling rates.

Lloyds raised its guidance for return on tangible equity--a key profitability metric--for the year and now expects a return greater than 16%, compared with more than 15% previously and the 15.7% reported for the fourth quarter.

"The sustained strength in performance means we are well positioned for 2026 and beyond," Chief Executive Charlie Nunn said. The bank said it will outline a new strategic plan in July.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

January 29, 2026 02:48 ET (07:48 GMT)