Berenberg Expects Lloyds Banking Group Profitability to Continue Improving After 'Robust' Q2, Strategy Update

02:39 AM EDT, 08/03/2026 (MT Newswires) -- Lloyds Banking Group's (LLOY.L) "robust" second-quarter performance and new strategic plan point to improved profitability, Berenberg said in a July 31 note. "Lloyds' strategy update is building on the bank's existing strengths, in our view, targeting further revenue improvement while controlling the cost base inflation. Consequently, profitability is set to continue improving, with management's confidence reflected in the rebasing of the interim [dividend per share] 30% higher for 2026. We raise our outer-year earnings estimates and our price target to GBp121 [from GBp117] to reflect the higher revenue potential; however, with the shares trading on c2.0x TNAV on our numbers, we believe valuation adequately captures the expected profitability improvement. Hold," the research firm wrote. The British lender aims for mid-single-digit compound annual net revenue growth through 2030, anchored by high-single-digit CAGR in noninterest income and mid-single-digit CAGR in net interest income. Analysts also noted that Lloyds delivered better-than-expected underlying pretax earnings, 2% above consensus estimates. Meanwhile, the banking group's revenue aligned with expectations, growing 19% year over year, due to net interest income growth and momentum in other operating income. Against this backdrop, Berenberg boosted its EPS forecasts for 2026 through 2028 by 2.8%, 4.8% and 5%, respectively.