Lloyds Banking Group: Strategy looks sensible with digital/AI the key enabler; c20% ROTE target in 2030 broadly in line

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Lloyds Banking Group: Strategy looks sensible with digital/AI the key enabler; c20% ROTE target in 2030 broadly in line

C A Z E N O V E Europe Equity Research

30 July 2026

Lloyds Banking Group Neutral

LLOY.L, LLOY LN

Strategy looks sensible with digital/AI the key enabler; Price (29 Jul 26):111p

c20% ROTE target in 2030 broadly in line Price Target (Dec-27):121p

Lloyds’ strategic update outlined a ROTE target of c20% in 2030, which looks European Banks

ACslightly conservative against consensus expectations of 21.3%, with CIR expected Sheel Shah, CFA

to decline annually and be <45% by 2030 (in line). The strategy will focus on: 1) (44-20) 7134-8455

growth in the core business with market share gains; 2) further innovation with sheel.shah@jpmorgan.com

increased cross-sell – both to drive MSD% total revenue growth (vs cons 5.8%) and Venkat Madasu

HSD% Other income growth (vs cons 6.2%) across the plan; and 3) further (44-20) 3493-9041

simplification with c£2bn of gross cost savings expected across the plan, venkat.madasu@jpmorgan.com

underpinned by AI. Capital generation is expected to improve towards c225bps by Kian Abouhossein

2028 (vs JPMe 270bps) and >225bps by 2030 (vs JPMe c290bps), which we see (44-20) 7134-4575

kian.abouhossein@jpmorgan.com

supporting the outlook for continued growth in distributions. Whilst we expect J.P. Morgan Securities plc

limited changes to consensus expectations, we view the strategy as sensible and

allowing the Group to further grow into its core competencies with digital/AI a key Specialist Sales contact details:

enabler to unlock greater cross-sell and deeper customer penetration. We see this Gigi Sparling - Specialist Sales -

driving strong Fee income growth and sustainable returns into the future. 2Q European Financials