Q226 preview: All is well, capital markets upside

Research evidence excerpt

Q226 preview: All is well, capital markets upside

Accessible version

UK Banks

Q226 preview: All is well, capital markets

upside

Price Objective Change

Overall – another good quarter 09 July 2026

Overall, we expect another good quarter for UK banks. For the domestic banks, NII Equity

should be supported by solid volumes especially in lending. The structural hedge should United Kingdom

also benefit from sustainably higher rates, especially in the outer years. For the Asian Banks-Multinational/Universal

banks, deposit flows remain strong, and in addition there are now clear signs of Hong Perlie Mong >>

Kong loan demand inflecting, with loan growth reaching 5-6% in April/ May. Wealth Research Analyst

momentum has also continued, although there would likely be questions around future MLI+44 (UK)20 7996 6717

flows in light of recent regulatory tightening. Barclays and Standard Chartered should perlie.mong@bofa.com

also benefit from a quarter of elevated capital markets activities in the US/ Asia.

Watch Lloyds CMD alongside H1 results

Lloyds will be presenting its new medium term strategy alongside H126 results. We Exhibit 1: Ratings and POs

recently published our views into the event here: Lloyds Banking Group: How much PO changes

growth to compound? 02 July 2026. Our high level expectation is that management will

Old PO New PO Ratingprovide more details around growth, particularly in non-interest income, which has

Barclays 600 615 Buy

already been growing at high single digits consistently every quarter in the last 2-3 Lloyds 130 130 Neutral

years. Key area of focus will likely be CIB and retail wealth and investments. At c.20% NatWest 770 800 Buy

ROTE, we think it would make more sense to compound growth instead of chasing HSBC 1600 1650 Buy

marginal ROTE expansion.