Lloyds share price: Lender planning £2bn buyback next year

Plan still at an early stage and could be derailed by hard Brexit

Lloyds share price: Lender planning £2bn buyback next year

Lloyds Banking Group (LON:LLOY) is considering buying back almost £2 billion of its own shares in 2019, doubling this year’s amount, the Financial Times has revealed. The news comes ahead of the bailed-out lender’s third-quarter results this week.

Lloyds’ share price has jumped in London this morning, having gained 1.84 percent to 57.16p as of 08:42 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.26 percent higher at 7,067.90 points. Lloyds’ shares have given up nearly 15 percent of their value over the past year, as compared with about a 6.3-percent dip in the Footsie.

Lloyds mulls over buyback

Sources with knowledge of the matter have told the FT that Lloyds hopes to be able to return about £4.5 billion of capital to investors next year via a higher dividend and a share buyback of almost £2 billion. One person familiar with the plan, however, indicated to the newspaper that the plan was still at an early stage and would not be finalised until a board meeting in February. They further cautioned that the move was contingent on the regulator approving the FTSE 100 group’s capital plan, and could also be derailed by a hard Brexit.

Lender to post Q3 results

The news comes as Lloyds prepares to post its third-quarter results this Thursday, with UBS expecting the update to be ‘uneventful’. City A.M. meanwhile quoted Interactive Investor head of equity strategy Lee Wild as commenting that Lloyds was 22 percent down “from its 2018 peak just below 73p, the shares now trade near a two-year low”.

“But nothing in these numbers is expected to move the needle,” he added.

As of 08:57 BST, Monday, 22 October, Lloyds Banking Group share price is 57.21p.

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