Shareholders in Lloyds Banking Group (LSE: LLOY) have had a good run since 2020/21’s Covid-19 crisis. The Lloyds share price has soared over five years, as higher interest rates have turbo-charged British banks’ profits.
Lloyds leaps
As I write, Lloyds shares trade at 87.36p, valuing the Black Horse bank at £51.7bn. This places it fourteenth among the FTSE 100‘s largest companies by market value. However, the shares are roughly where they were in mid-2015, over 10 years ago.
This Footsie stock is up 19.8% over six months and has leapt 60% in 2025. Furthermore, it has jumped by 56.2% over one year and a whopping 212.7% over five years.
Dividend delight
The above returns exclude dividends — regular cash payouts from some companies to shareholders. Here are Lloyds’ dividends over the past four full years:
| Year | 2024 | 2023 | 2022 | 2021 |
| Total dividend | 3.17p | 2.76p | 2.4p | 2p |
| Increase | 14.9% | 15% | 20% | N/A |
Over four years (excluding 2025), Lloyds has paid 10.33p per share in dividends, worth 11.8% of the current share price. These yearly payments have risen by a juicy 58.5% from 2021 to 2024.
Of course, future dividends are not guaranteed, so they can be cut or cancelled at short notice. Still, Lloyds lifted its 2025 interim dividend by 15%, continuing the trend of rising payouts since the coronavirus pandemic.
Here’s an interesting fact for growth and US investors. The Lloyds share price has almost matched the number-one meme stock — Elon Musk’s Tesla –over the past five years. Tesla stock has soared by 254% in half a decade, in line with the returns from Lloyds shares with dividends invested. (Tesla has never paid a dividend).
No rough ride from Reeves?
With the share price surging in recent years, Lloyds stock now trades on around 13.3 times trailing earnings, delivering an earnings yield of 7.5%. This comfortably covers the dividend yield of 3.8% a year almost twofold. To me, this suggests that the shares are not as cheap as when my family portfolio bought them in mid-2022 for 43.5p a share.
Also, I am slightly concerned about a possible hit to the share price from a potential tax grab by the chancellor, Rachel Reeves. Last year, Reeves caused a headache for British businesses by increasing the rate of National Insurance employers had to pay to HMRC.
This year, the City of London is swirling with rumours that Reeves has plans to increase the special tax applied to the UK’s biggest banks. Introduced in 2011, this levy is expected to raise £1.3 billion for HM Treasury in 2025/26.
If Reeves were to, say, double this levy, then it might boost government receipts by over £1bn a year going forward. However, in the second half of 2024, the current bank levy cost Lloyds only £147m. Even if this did double, it would still be a modest extra burden for the bank to bear.
Therefore, to answer the question in my title — no, I do not expect the Budget on 26 November to crash the Lloyds share price.
