5,000 LLOYDS SHARES COULD PAY THIS MUCH PASSIVE INCOME…
Now at 91p, Lloyds (LSE:LLOY) shares are fast approaching that almost-mythical £1 level. The last time they were above this was all the way back in 2008!
This follows an incredible 235% surge in five years, far outpacing the returns from the FTSE 100 and many US tech stocks. And this is before dividends — not bad for a supposedly ‘boring’ dinosaur stock.
But what are the income prospects like with Lloyds currently at a 52-week high? Let’s take a closer look.
Passive income potential
At the current share price, 5,000 shares of the Black Horse Bank would cost about £4,585. With the 12-month forecast rolling dividend yield at 4.5%, that means these shares would pay out roughly £206 per year.
This yield is higher than Barclays (2.4%) and Standard Chartered (2.4%), but below HSBC (5.2%) and NatWest (5.6%). So I’d say the income prospects are solid rather than juicy.
As always though, it’s important to remember that dividend forecasts can change quickly, especially if some sort of crisis were to engulf the global financial system. This always appears unlikely until it happens. And one could come from anywhere at anytime.
Based on what we know though, Lloyds seems to be in a pretty good spot right now. Last month, it slightly increased its full-year underlying net income interest guidance to around £13.6bn (from £13.5bn).
CEO Charlie Nunn commented: “Strong capital generation was supported by income growth, cost discipline and strong asset quality in the first nine months of 2025, despite the impact of the additional motor finance charge in the third quarter. Our strategic progress combined with this financial performance gives us confidence in our performance for the year and our 2026 guidance.â
Rumbling on
The motor finance charge, of course, relates to the car loans commission scandal. This keeps rumbling on, and Lloyds has so far put aside £1.95bn for this.
The amount is higher than other banks because its Black Horse division is the UK’s largest car lender.
In Q3, Lloyds’ pre-tax profit took a 36% hit due to this issue. Investors will be hoping the motor finance scandal will be in the rear-view mirror by this time next year.
What about fintechs?
Is the stock still worth considering around the 91p mark? I think it is if an investor is after a solid blue-chip income stock. Lloyds is well-run and forecasts point to steady dividend increases in future.
Personally, I own HSBC shares because I find the Asia growth story more attractive than the UK over the long run. But Asia brings risks as well as rewards, as we’ve seen in recent years with the property crisis in China and President Trump’s tariffs placed on the region’s key exporters.
What about the fintech threat from the likes of Monzo, Revolut, and Starling? Well, Revolut recently raised a load of cash at a meaty $75bn valuation. So this is a potentially serious rival as it moves into banking.
However, these names have been about for years now and not really impacted Lloyds in any meaningful way. Meanwhile, the bank will offer the UKâs first agentic AI financial assistant early next year to its 21m mobile app customers. So it’s committed to digital innovation.
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HSBC Holdings is an advertising partner of Motley Fool Money. Ben McPoland has positions in HSBC Holdings. The Motley Fool UK has recommended Barclays Plc, HSBC Holdings, Lloyds Banking Group Plc, and Standard Chartered Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
2025-11-09T07:58:41Z