Shares in banking colossus Lloyds (LSE: LLOY) have endured a tumultuous ride during the course of 2016.

From tipping to three-year lows of 56p per share back in February, the stock has bounced resoundingly higher and was recently changing hands around the 70p marker.

Still, the bank is now dealing at a 5% discount to levels seen at the start of the year. Which prompts me to ask: could this be the time to pile into Lloyds?

Risk factors

It certainly can’t be argued that Lloyds doesn’t carry its fair share of risks, with fears over the impact of a potential ‘Brexit’ weighing heavily on investors’ minds.

And with good reason — the result of this month’s referendum is too close to call, with the latest Opinium poll last week showing 43% supporting a ‘leave’ vote versus 40% who wish to remain in the European Union.

A British withdrawal would provoke panic for Britain’s blue chips, prompting huge uncertainty over delayed investment decisions during the two-year ‘separation’ period, not to mention fears over the long-term impact of an exit on GDP growth.

And Lloyds would be particularly susceptible to these issues, of course, given its dependence on the UK high street. Massive de-risking and asset sales in recent years means that the bank’s fortunes are closely tied to the state of the retail banking market.

If this wasn’t headache enough, Lloyds of course also faces the prospect of mounting misconduct bills in the years ahead, primarily thanks to the PPI mis-selling scandal.

The bank has already stashed away £16bn to cover the cost of potential claims. And although a touted 2018 claims deadline provides some peace of mind, the prospect of rocketing bills prior to the cut-off remains a huge worry.

Pukka prices?

However, I believe that these concerns are more than baked into Lloyds’ share price at the present time.

Indeed, the financial giant currently changes hands on a P/E ratio of 9.3 times, comfortably below the watermark of 10 times that is illustrative of stocks with high risk profiles.

And should the UK avoid tumbling out of the Union at this month’s referendum, I reckon this lowly multiple leaves plenty of room for Lloyds to enjoy a share price surge.

Dividend dynamo

And while Lloyds’ narrow domestic focus may limit revenues growth in the coming years, the firm’s subsequently stable earnings outlook makes it a great selection for dividend chasers, in my opinion.

On top of this, a CET1 ratio of 13% as of March is one of the strongest capital ratios across the banking sector, giving Lloyds’ payout potential an extra boost.

A projected dividend of 4.4p per share for 2016 creates a bumper 6.3% yield. And the readout moves to 7.3% for 2017 thanks to a predicted 5.1p reward.

While Lloyds still has to overcome some huge obstacles, I reckon the bank provides exceptional value at current prices.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.