The Lloyds Banking Group (LSE:LLOY) share price responded positively to 30 July half-year results. The stock closed the day 3.9% higher. But where might it go next? Let’s take a closer look. <\/p>\n
What did the results show? <\/p>\n
In the world of banking, there are three key financial measures that analysts tend to focus on when assessing results. How did Lloyds fare against these? <\/p>\n
The return on tangible equity isn’t only a guide to profitability but also operational efficiency. Prior to publication of the bank’s results for the first six months of 2026, analysts were expecting this to be 16.6%. In fact, it was 17.1%. <\/p>\n
The net interest margin (NIM) is usually expressed as a percentage and is calculated by deducting the interest paid on deposits from the amount earned from loans, and then dividing this number by the value of interest-bearing assets. Lloyds reported a NIM of 3.19% compared to the 3.22% expected by analysts. That’s a narrow miss. <\/p>\n
But it was still 0.15 percentage points higher than for the same period in 2025. For context, had it met expectations, the bank’s profit before tax would have been \u00a3147m (+3.4%) more. <\/p>\n
Finally, there’s the common equity tier 1 (CET1) ratio, a measure of financial strength. Predictions were for 13.2% (after share buybacks and dividends). Lloyds fell a little short and reported a CET1 ratio of 13.1%. <\/p>\n
More widely, it matched predictions for earnings per share (EPS) and beat the dividend forecast. Net income was also marginally higher. Overall, I think it was a strong set of results. <\/p>\n
The trouble is that the UK’s banks, including Lloyds, are doing quite well at the moment. As a result, a number of think tanks and other commentators are calling on the new Prime Minister to introduce a windfall tax or other levy. Indeed, it might prove tempting for an increasingly cash-strapped government. <\/p>\n
Also, Lloyds derives virtually all of its income from the UK which means it’s particularly vulnerable to a domestic slowdown. <\/p>\n
But what does the City think? <\/p>\n
Undervalued? <\/p>\n
Analysts have a 12-month share price target for the bank of 125p. Given that EPS was in line with expectations, I suspect most forecasts are going to remain unchanged. However, if the bank’s shares do reach 125p, that would be an 8.7% increase on their current (1 August) value. It means a \u00a35,000 investment could grow to \u00a35,435. <\/p>\n
On top of this, the bank’s declared an interim dividend of 1.58p a share. That’s an impressive 29.5% increase on 2025. If the total payout for the year is raised by the same amount, shareholders could earn (no guarantees) 4.73p a share over the next 12 months. This would produce income of \u00a3206 on a \u00a35,000 investment made today. <\/p>\n
That’s a possible overall return \u2013 capital growth and dividends \u2013 of 12.8% (\u00a3641). <\/p>\n
My view <\/p>\n
Although this isn’t to be sniffed at, I think there are better opportunities to consider elsewhere. Looking at its share price relative to earnings, it’s the most expensive of the FTSE 100’s five banks. <\/p>\n
And despite having a forward yield of 4.1% \u2014 compared to 3.1% for the Footsie as a whole \u2013 other high-quality stocks offer a better return. That’s why Lloyds isn’t for me. <\/p>\n
Should you invest \u00a35,000 in Lloyds Banking Group Plc right now? <\/p>\n
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. <\/p>\n
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list? <\/p>\n
\u00a0See The Six Stocks <\/p>\n
James Beard does not hold positions in any of the companies mentioned. <\/p>\n
The post Over the next 12 months, the Lloyds share price and dividend could turn \u00a35,000 into \u00a35,641<\/a> appeared first on The Twelfth Magpie<\/a>. <\/p>\n More reading <\/p>\n The Twelfth Magpie 2026 <\/p>\n","protected":false},"excerpt":{"rendered":"The Lloyds Banking Group (LSE:LLOY) share price responded positively to 30 July half-year results. The stock closed the…\n","protected":false},"author":2,"featured_media":95627,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21256],"tags":[2861,31878,21559,5692],"class_list":["post-95626","post","type-post","status-publish","format-standard","has-post-thumbnail","category-lloyds-banking-group","tag-lloyds-banking-group","tag-net-interest-margin","tag-share-buybacks","tag-share-price"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/117024947236601828","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/95626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=95626"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/95626\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/95627"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=95626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=95626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=95626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}