May 23, 2026, 3:02 AM EDT. Lloyds Banking Group shares have seen dividend growth since the Covid-19 pandemic, recovering from a cut in 2020 with annual payouts rising from 2p to 3.65p. The dividend yield peaked above 6% in 2023 but has now dropped to 3.8%, just above the FTSE 100 average. Analysts forecast Lloyds' dividend to increase to 5.9p by 2028, potentially pushing the yield above 6%. However, competitors NatWest and HSBC offer stronger yields currently-7.8% and 5.7%, respectively-with expected dividend increases and earnings growth. NatWest looks particularly attractive for income investors. Lloyds faces notable domestic risks, including exposure to the UK housing market and an ongoing motor-finance scandal with significant potential redress costs. Investors should weigh yield against risks before deciding.
