Lloyds Banking Group PLC (LSE:LLOY) is not making headlines, but that might be its greatest strength in 2025.
In a research note on Tuesday, Deutsche Bank reiterated its bullish view on the group, maintaining a 'buy' rating and 88p price target.
Analyst Robert Noble expects the UK lender to deliver consistent improvements across key financial metrics this year, with momentum building into 2026 and 2027.
Following a solid first quarter, Deutsche forecasts sequential quarterly gains in revenue, cost control, loan provisions, profit and capital generation.
The bank's return on tangible equity and capital returns are also expected to strengthen, with Lloyds seen as relatively insulated from wider global volatility.
Lloyds is trading at 71.29p (up 1% on Tuesday), but Noble believes the shares offer compelling long-term value.
The Deutsche analyst projects a capital return yield of more than 15% by 2027, reflecting sustained earnings growth and excess capital distributions.
While UK banks remain out of favour with some global investors, Deutsche’s note suggests that Lloyds’ low-risk model and improving fundamentals may be starting to stand out. The shares, it argues, still have room to run.