Lloyds share price rises as group launches buyback programme

Equities

Bailed-out lender to repurchase up to £1bn of ordinary shares

Shares in Lloyds Banking Group (LON:LLOY) have climbed higher in London this morning, as the bailed-out lender announced the start of its share buyback programme. The blue-chip bank, which returned to full private ownership last year, unveiled plans to return cash to shareholders earlier this year, as it updated investors on its full-year performance.

As of 08:47 GMT, Lloyds’ share price had added 0.80 percent to 67.79p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.04 percent higher at 7,160.79 points. The group’s shares have lost about 0.3-percent of their value over the past year, as compared with about a 2.5-percent fall in the Footsie.

Lloyds kicks off share buyback

Lloyds announced in a statement this morning that it was launching its share buyback programme to repurchase up to £1 billion of ordinary shares. The group has entered into an agreement with UBS to conduct the programme, which starts today and will end no later than February 4.

UBS will purchase Lloyds’ ordinary shares as principal and sell them on to the lender in accordance with the terms of their engagement. The FTSE 100 group intends to cancel the shares it purchases through the programme.

Programme announced with results

The start of the programme comes after the blue-chip lender unveiled plans to repurchase shares alongside its full-year results, when it also recommended a final ordinary dividend of 2.05p per share, taking its total payout for the year to 3.05p per share. At the time, Lloyds noted that the £1-billion share buyback was equivalent to up to 1.4p per share.

Lloyds, which offered some of the highest dividends in Britain before the crisis of 2007-2009, restored its payout to shareholders in 2015, with a dividend of 0.75p per share for the 2014 financial year. 

As of 09:02 GMT, Thursday, 08 March, Lloyds Banking Group share price is 67.45p.