Lloyds share price rises as group unveils buyback and lifts dividend

on Feb 20, 2019
Updated: Oct 21, 2019

Shares in Lloyds Banking Group (LON:LLOY) have climbed higher in early morning trade in London, even as the bailed-out lender’s full-year profits fell short of estimates. The company, however, unveiled plans to spend £4 billion on dividends and a share buyback.

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As of 08:48 GMT, Lloyds’ share price had added 2.76 percent to stand at 59.98p. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.32 percent higher at 7,201.88 points.

Lloyds updates on performance

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Lloyds announced in a statement this morning that its statutory profit after tax had climbed 24 percent to £4.4 billion last year, with a six-percent increase in underlying profit to £8.1 billion.  Reuters noted in its coverage of the news that the net profit had come in below expectations of £4.6 billion, according to a company-provided average of analyst forecasts.

Net income meanwhile rose two percent to £17.8 billion, with net interest margin higher at 2.93 percent. The group further reported  CET 1 ratio of 13.9 percent post dividends and share buybacks.

Lloyds, however, booked a further £750 million for the payment protection insurance (PPI) scandal last year, with £200 million in the fourth quarter, taking the lender’s total bill for the scandal to £19.43 billion.

“2018 has been a year of strong strategic and financial delivery,” the FTSE 100 bank’s chief executive António Horta-Osório commented in the statement, adding, however, that the near-term outlook for the UK economy remained uncertain.

Group to return £4bn to investors

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Lloyds unveiled total ordinary dividend of 3.21 pence per share, up five percent on 2017, and a proposed share buyback of up to £1.75 billion representing a total capital return of up to £4 billion, marking a 26-percent rise on the prior year’s £3.2 billion payout to shareholders.

As of 09:17 GMT, Wednesday, 20 February, Lloyds Banking Group share price is 59.98p.

Finance & Banking Stock Market