Investec has upgraded its rating for Lloyds from 'sell' to 'hold' and lifted its target price from 65p to 76p on a more accommodative and targeted political and regulatory backdrop.Analyst Ian Gordon said that the Prudential Regulation Authority's (PRA's) decision to impose an "accelerated" 3% leverage ratio will cause all banks to constrain lending relative to their pre-existing plans. There are now reduced incentives for price-led competition in the mortgage lending market which should support net interest margin (NIM) progression at Lloyds, Gordon said, given that others will begin to price mortgages less cheaply than they would otherwise have done."We do not expect any noticeable behavioural change by Lloyds, as it has, we believe, quite deliberately prioritised margin preservation over volume, and has been unashamedly shrinking its 'core' mortgage portfolio (until now) in order to mend its funding profile. "However, we believe that the 'threat' of more aggressive price-led competition from others has now significantly receded, to the benefit of Lloyds (and to the inevitable detriment of the long-suffering UK consumer)."Gordon also said that he is increasingly hopeful that the European Commission would approve an extension for the planned 2014 Project Verde initial public offering (IPO) to 2015.The stock was up 0.22% at 74.07p by 11:28.BC