Lloyds shares have performed marvellously over the past few years. In fact, January saw the Black Horse bank break through the £1 per share barrier for the first time in nearly two decades.
However, with fears about a UK recession rising, I think this pair of bank stocks is worth looking at before Lloyds in May.
Caucasus region
Georgian lender Lion Finance (LSE:BGEO) only joined the FTSE 100 last month, but it’s already up 16% since then. This puts the five-year return at a breathtaking 904%, with loads of dividends on top.
Despite this, the lender (formerly Bank of Georgia) is trading at just 6.6 times forward earnings. And there’s a 3.5% forecast dividend yield.
Just writing all this makes me regret selling this stock in 2024. But the reasons I did so — political risk from contested elections and sanctions from the EU and US — haven’t gone away. These could still cause problems for the bank and its share price.
However, economic growth in Georgia is still expected to be around 5% in 2026, driven by high consumption, robust tourism, and credit growth. And Lion Finance, which is part of a banking duopoly in the country, continues to grow profits strongly.
The lender also owns Ameriabank, one of Armenia’s largest banks. This is another strong economy, with GDP growth of about 7.2% in 2025.
Still trading cheaply and now in the bright lights of the FTSE 100, the stock’s run could be set to continue.
Latin America
Turning to Latin America now, we have Nu Holdings (NYSE:NU). This is the region’s largest digital bank, with an astonishing 131m customers in three countries (Brazil, Mexico, and Colombia) at the end of 2025.
Since Nu is a digital bank with no physical branches, it doesn’t have to rent more buildings and hire branch managers to serve extra customers. As such, the asset-light company is growing revenue and profits very quickly.
One impressive metric worth highlighting is that Nu’s monthly average revenue per active customer reached $15 in Q4, up from $11 a year earlier. But the cost to serve each customer was very low, at just $0.80.
Last year, the lender’s return on equity reached a record 33%. Even for a digital bank, that’s very impressive.
Founder and CEO David Vélez commented: “As we enter 2026, we remain fully focused on winning in Latin America, while building the capabilities that will allow Nubank to evolve into a global digital banking platform over time.”
Of course, there’s no guarantee the firm will enjoy success in the US and Europe. And there’s even a chance international expansion could significantly increase customer acquisition costs and therefore profitability. Expansion overseas always comes with execution risk.
However, the long-term growth opportunity just in Latin America appears massive. Nu serves roughly 15% of the adult population in Mexico, where it’s now the leading issuer of new credit cards, and just 11% in Colombia.
It still has Chile, Argentina, and Peru to enter, and possibly Panama and Costa Rica in Central America.
True to its origins as a tech-focused disruptor, the company is investing heavily in AI. The CEO says Nu will “continue putting AI directly into customers’ hands, moving closer to our long-term vision of an AI-powered personal banker in every customer’s pockets“.
The post 2 bank shares to consider buying before Lloyds in May appeared first on The Motley Fool UK.
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Ben McPoland has positions in Nu Holdings. The Motley Fool UK has recommended Lloyds Banking Group Plc and Nu Holdings. 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.
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