We recently compiled a list of the 13 Best Performing Bank Stocks So Far In 2025. In this article, we are going to take a look at where Lloyds Banking Group plc (NYSE:LYG) stands against the other bank stocks.
The banking sector seems to be performing well in 2025 as the economy has been stronger than expected. Banking and financial services companies are taking more chances and investing in growth, especially in AI. At the same time, central banks around the world continue to lower interest rates, which is further helping the banks.
READ ALSO: 10 Unrivaled Stocks of the Next 5 Years and 10 Best Low Priced Technology Stocks To Buy Now.
In December 2024, Seana Smith, the anchor of Yahoo Finance’s morning show, pointed out that it might be a good time to buy bank stocks. Heading into 2025, that was the overwhelming consensus among well-known strategists. The reasons for optimism around bank stocks included a strong economy, expected deregulation under President-elect Donald Trump, attractive stock prices, and lower interest rates.
Brian Belski, Chief Investment Strategist and leader of the Investment Strategy Group at BMO Capital Markets, noted in his 2025 outlook that financial stocks are still “drastically unloved,” despite compelling valuations and strong earnings growth expectations. Aadil Zaman from Wall Street Alliance Group mentioned that the Federal Reserve’s expected drop in interest rates would result in greater investment banking activity.
Another reason for the sky-high enthusiasm was that historically, financial stocks have performed well under Republican administrations because of expectations for looser regulation, which creates a more favorable environment for banks.
Methodology
To compile our list of the 13 best-performing bank stocks so far in 2025, we used the Finviz stock screener to look for bank companies with the best year-to-date performance. We narrowed down our list by looking for the best-performing stocks with a market capitalization of more than $2 billion. The 13 best-performing bank stocks so far in 2025 were then ranked in ascending order based on their year-to-date performance as of February 14, 2025.
Additionally, we mentioned the hedge fund sentiment surrounding the best-performing stocks, which was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An aerial shot of a business district with the company’s headquarters towering above its competitors.
Lloyds Banking Group plc (NYSE:LYG)
Year-to-Date Performance: 19.81%
Number of Hedge Fund Holders: 10
Lloyds Banking Group plc (NYSE:LYG) is a leading UK-based financial services group that is primarily focused on retail and commercial customers. The group provides a wide range of banking and financial services through a portfolio of 16 unique brands that includes Lloyds Bank, Bank of Scotland, and Halifax. Lloyds Banking Group plc (NYSE:LYG) ranks among the top-performing stocks in the banking sector.
The corporation is strategically investing in digitization, advanced technologies, and AI to improve customer experiences and overall efficiency. Lloyds Banking Group plc (NYSE:LYG) has established an AI Centre of Excellence that brings together specialists from various fields like data science, advanced analytics, and AI ethics. To strengthen its AI capabilities, Lloyds Banking Group plc (NYSE:LYG) appointed Magdalena Lis as Head of Responsible AI as of February 3, 2025. Previously, in August 2024, the group appointed Dr. Rohit Dhawan as Director of AI and Advanced Analytics. With over 15 years of experience in AI, Lis will oversee responsible development and use of AI to enhance Lloyds Banking Group plc’s products and services.
Previously, in September 2024, Lloyds Banking Group plc (NYSE:LYG) announced that Lloyds Bank partnered with Cleareye.ai, an AI specialist in the trade finance space. Cleareye.ai’s advanced technology would help automate and simplify processing and compliance reviews of trade documents for Lloyds Bank’s customers.
Overall, LYG ranks 10th on our list of the best-performing bank stocks so far in 2025. While we acknowledge the potential of LYG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LYG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
