Lloyds Banking Group PLC (LSE:LLOY) announced a new £1.75 billion share buyback and upgraded guidance for 2026 as it generally met or beat expectations in results for the final quarter of 2025.
A statutory profit before tax of £1.98 billion for the quarter beat the average City analyst's forecast of £1.72 billion.
Net interest margin for the final quarter of the year was 3.1%, up 11 basis points year-on-year and 4bps on the third quarter, and only slightly below market estimates.
Net interest income came in at £3.5 billion, up 2%, even though operating costs rose 12% to £2.6 billion.
Return on tangible equity was 12.9% for the year, or 14.8% excluding a motor finance commission charge booked in the third quarter. Fourth-quarter return on tangible equity was 15.7%.
With the new buyback, total shareholder distributions for the year amounted to roughly £3.9 billion.
Going forward, Lloyds said it will "review excess capital distributions in addition to the ordinary dividend every half year".
For this coming year, it expects underlying net interest income of about £14.9 billion, with operating costs under £9.9 billion and a cost:income ratio of less than 50%. Return on tangible equity is forecast above 16%.
Chief executive Charlie Nunn said: “In 2025, we entered the second phase of our five year strategy and continued to deliver for customers, shareholders and wider stakeholders."
He said the strategic transformation "accelerates into 2026", with the culmination of the five-year strategy and a "sustained strength in performance means [that] we are well positioned for 2026 and beyond".
Management will share more detail on the next stage of the strategy in July.