10 Best Bank Penny Stocks to Buy According to Hedge Funds

5. Lloyds Banking Group plc (NYSE:LYG)

Share Price as of the close of January 3: $2.69

Number of Hedge Fund Holders: 10

Lloyds Banking Group plc (NYSE:LYG) is a UK-based financial services company that provides a range of banking and financial services within the country and internationally. It is one of the best bank penny stocks to buy according to hedge funds.

The company has been looking for ways to make the banking experience more flexible for its customers. On January 9, it announced that it would let customers do in-person banking at any of its three brands – Halifax, Bank of Scotland, and Lloyds – irrespective of which bank they had accounts with.

This was a move many saw coming, especially after Lloyds Banking Group plc (NYSE:LYG) introduced standardized uniforms for staff across the three banks last year. According to a report in The Guardian, some staff already move between different brands for work. The shake-up, however, has sparked concerns among unions who fear closures and job cuts ahead, because about 25% of these banks’ branches are located within proximity of one another.

Lloyds Banking Group plc (NYSE:LYG) has also been taking measures to cut costs and push customers toward digital and mobile banking, as part of its five-year strategic plan. In September, the company announced plans to shut another 55 branches, which would mean the group will have closed nearly 300 branches between January 2024 and December 2025. LYG cited a decline in transactions in these branches as the reason for their closures.

During its recent Q3 2024 earnings call on October 24, the group reported £3.8 billion in statutory profit after tax for the first nine months of 2024, with a return on tangible equity of 14%. Year-to-date, the net income stood at £12.7 billion. Lloyds Banking Group plc (NYSE:LYG) saw a significant improvement in sequential income in Q3, aided by a 2% increase in net interest income during the quarter.

Wall Street analysts are bullish on the stock, with a consensus Buy rating and an average share price upside potential of 4%.