RBC Expects Lloyds Banking Group to Bid for Aldermore, Calls Potential Acquisition 'Good Fit'

12:38 PM EDT, 09/11/2026 (MT Newswires) -- RBC Capital Markets expects UK-based Lloyds Banking Group (LLOY.L) to be among potential bidders looking to acquire local specialty lender Aldermore, which focuses on buy-to-let mortgages and motor finance. In June, Sky News reported, citing sources, that Lloyds is weighing a potential takeover of Aldermore, a unit of South African financial services group FirstRand (FSR.JO). Analysts noted that nonbinding bids for Aldermore are due September-end, while binding offers are expected by December. "The acquisition would be a good fit, and financials are compelling (ROI >30%). Our updated LLOY M&A model values ALD at c.GBP1.4bn. There are second order implications to consider for ALD's SMID peers," the research firm wrote in a Friday note. "The BTL market is increasingly being dominated by professional landlords, a segment where LLOY would like to build out its capabilities, and the motor market is consolidating (although LLOY feel that they already have meaningful scale)." RBC values Aldermore at 1.45 billion pounds sterling, including its motor finance division, based on its updated mergers and acquisition model. Excluding motor, the lender is valued at 1.35 billion pounds. "We estimate that the EPS accretion for LLOY from this transaction would be 5.3% (inc motor) and 3.9% (ex motor) and the ROI would be compelling at 35% (inc motor) and 31% (ex motor). The attractiveness of this deal is driven by significant cost and funding synergies," RBC added. Lloyds' stock is rated at outperform, with a price target of 1.24 pounds.