Lloyds Banking Group Plans 2027 Rollout of Tokenized Deposits
Written by Emily J. Thompson, Senior Investment Analyst
Source: Benzinga
- Blockchain Application Prospects: Lloyds Banking Group successfully piloted tokenized deposits in December 2025, with plans for a full rollout by the first half of 2027, a move that could fundamentally reshape financial services in the UK, enhancing customer experience and accelerating transaction processing.
- Mortgage Processing Innovation: CEO Charlie Nunn stated that combining tokenized deposits with artificial intelligence could reduce mortgage processing times from weeks to days while eliminating intermediaries, significantly improving efficiency and lowering costs.
- Asset Tokenization Growth: In July 2025, Lloyds completed a landmark transaction with Aberdeen Investments, using tokenized money market fund units as collateral for foreign exchange trades, marking a significant milestone for regulated digital assets and driving rapid growth in asset tokenization.
- Convergence of Traditional Finance and DeFi: Lloyds' blockchain strategy indicates that traditional financial institutions are taking Web3 technology seriously, and the planned rollout of tokenized deposits in 2027 could serve as a template for modernizing retail banking, enhancing both efficiency and compliance in financial services.
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About LYG
Lloyds Banking Group plc is a United Kingdom-based financial services company. The Company provides a range of banking and financial services that are focused primarily on retail and commercial customers. The Company operates through three segments: Retail, Commercial Banking, and Insurance, Pensions and Investments. The Retail segment offers a range of financial services products to personal customers, including current accounts, savings, mortgages, credit cards, unsecured loans, motor finance and leasing solutions. The Commercial Banking segment serves small and medium businesses, as well as corporate and institutional clients, providing lending, transactional banking, working capital management, debt financing and risk management services. The Insurance, Pensions and Investments segment offers insurance, investment and pension management products and services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Lloyds Banking Reports Q4 2025 Earnings Highlights
- Earnings Beat: Lloyds Banking reported a Q4 2025 GAAP EPS of 2.20p, exceeding expectations by 0.20p, indicating sustained profitability despite slight revenue shortfall.
- Revenue Growth: The fourth quarter revenue reached £5.12 billion, an 8.7% year-over-year increase, although it missed expectations by £10 million, reflecting the company's robust market performance.
- Dividend and Buyback Plan: The Board recommended a final ordinary dividend of 2.43p per share, totaling 3.65p for 2025, a 15% increase, while announcing a share buyback program of up to £1.75 billion, showcasing strong capital position.
- 2026 Guidance: For 2026, the Group expects underlying net interest income of approximately £14.9 billion, a cost:income ratio below 50%, and an asset quality ratio of around 25 basis points, demonstrating confidence in future financial performance.
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Lloyds Banking Group Shares Undervalued by 37.4%
- Stock Performance: Lloyds Banking Group's shares recently closed at £1.02, reflecting a 72.7% increase over the past year, yet a 4.8% decline over the last 30 days indicates a contradiction between short-term volatility and long-term growth.
- Valuation Analysis: The Excess Returns model estimates Lloyds' intrinsic value at approximately £1.63 per share, suggesting a 37.4% undervaluation compared to the current price, indicating that the market may not fully reflect its profit potential.
- P/E Ratio Comparison: With a P/E ratio of 17.27x, significantly above the banking industry average of 11.13x, this suggests that the market holds optimistic expectations for Lloyds' future growth, but it may also imply that the current share price is overvalued.
- Investor Sentiment: Simply Wall St assigns Lloyds a valuation score of 2 out of 6, reflecting a cautious market outlook on its future performance, prompting investors to be aware of potential risks and opportunities.
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