Shares in Lloyds Banking Group (LON:LLOY) have advanced this morning as the lender unveiled plans to return £1 billion to investors. The news came as the bank, which returned to full private ownership last year, updated investors on its performance and unveiled plans to invest £3 billion in a digital push.
As of 08:23 GMT, Lloyds’ share price had added 1.50 percent to 68.87p. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index having slipped into the red and currently standing 0.18 percent lower at 7,233.89 points.
Lloyds updates on performance
Lloyds updated investors on its full-year performance this morning, announcing that its statutory profit before tax had climbed 24 percent to £5.3 billion, with a return on tangible equity of 8.9 percent. Reuters, however, noted that the result fell short of average analyst expectations of £5.73 billion.
The payment protection insurance scandal continued to weigh on the group’s performance, with Lloyds booking a provision of £1.7 billion for the year. The lender explained that the increased charge reflected increased complaint levels including the impact of the first Financial Conduct Authority advertising campaign for the August 2019 industry deadline.
Lloyds, which returned to full private ownership last year, recommended a final ordinary dividend of 2.05p per share, taking its total payout for the year to 3.05p per share. The lender further announced that it was planning to implement a share buyback of up to £1 billion, equivalent to up to 1.4p per share.
The group’s chief executive Antonio Horta-Osorio unveiled in a separate statement Lloyds’ 2018-2020 strategic plan which will see the company invest more than £3 billion in strategic initiatives, marking an increase of more than 40 percent on the previous strategy, to further enhance customer propositions and digitise the group.
Lloyds’ results follow those of peer HSBC (LON:HSBA), with Barclays (BARC) and RBS (LON:RBS) due to report tomorrow and on Friday, respectively.