If you rewind to five years ago, Lloyds (LSE: LLOY) shares closed the day on 11 June 2021 at a lowly 48.4p each. That means 10,000 of them could have been bought with £4,840.

As I write ahead of Wednesday’s market open (10 June), those same 10,000 shares are worth £9,914. That’s a gain of more than 100%, meaning investors that bought and held would have more than doubled their money.

It’s also more than double the 43.4% return posted by the FTSE 100 index over the same time period.

That’s all well and good for those who did manage to buy five years ago. But does the investment case for the bank still hold up today? 

How do the numbers stack up?

Here is how that same £4,840 investment in Lloyds five years ago would stack up versus simply tracking the Footsie over the same period:

It’s worth pointing out the Footsie is no slouch, either. A 43.4% return over five years is a solid performance from a diversified index of the UK’s largest companies.

But Lloyds has delivered an impressive 104.8% over the same period. For investors who can do their research and back individual companies, I think that gap illustrates what patient stock selection can deliver, even in a diversified portfolio.

But what actually drove the recovery, and importantly for investors like you and me, what are the key opportunities and risks of investing from here?

From pandemic low to FTSE stalwart

With a market cap of £57.8bn and a price-to-earnings (P/E) ratio of 12.9, the banking stock remains one of the most significant and widely debated income stocks in the Footsie.

Five years ago the shares were depressed by pandemic uncertainty, the suspension of dividends, and deep scepticism about the UK economic outlook.

Things have improved since. The dividend was reinstated and has grown from 0.57p in 2021 to 3.65p in 2025, a more than sixfold increase.

A £1.75bn share buyback programme is reducing the share count and supporting earnings per share. The bank has also been focused on cost control as part of righting the ship.

In the first quarter of 2026, the Group delivered sustained strength in financial performance, growing our income, maintaining our cost discipline and delivering strong profitability. Our differentiated business model remains resilient in the context of the current economic uncertainties.

Charlie Nunn, Group Chief Executive, Lloyds Banking Group

So, what are there risks that could hold the shares back from here?

What could hold it back?

There are a few risks to consider. The bank is heavily exposed to the UK economy so any signs of weakness could move the price significantly.

Investors might remain cautious despite more clarity on the motor finance mis-selling scandal. More broadly, interest rate cuts could put net interest margins under pressure and squeeze profitability.

My verdict

In my view, Lloyds has many strengths that position it well in the sector. However, I think there are more interesting opportunities for my own portfolio. Which names I’m looking to add to my portfolio first is the key question for me right now.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

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Ken Hall does not hold any positions in the companies mentioned.