Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Lloyds eyes dividend as PPI bill nears £10bn

Lloyds eyes dividend as PPI bill nears £10bn

Lloyds Banking Group has unveiled plans to restart paying dividends for the first time since it was bailed out in October 2008.

In a Stock Exchange announcement this morning the bank said it expected to apply to the Prudential Regulatory Authority in the second half of 2014 to restart dividend payments.

Lloyds said it expected initial dividends to ‘be at a modest level’ but thereafter ‘to have a progressive dividend policy with the aim of moving…to a dividend payout ratio of at least 50% of sustainable earnings.’

António Horta-Osório (pictured), Lloyds chief executive, said: ‘We expect to apply in the second half of 2014 to restart dividend payments and to deliver progressive and sustainable payments to shareholders thereafter. This will be another important step in our journey to rebuild trust and confidence in our group.’

The dividend plans come as the bank prepares to unveil a £6.2 billion underlying profit for 2013, more than double the equivalent figure for 2012.

However, the lender will set aside another £1.8 billion to cover legacy payment protection insurance (PPI) mis-selling and £130 million to pay redress over mis-sold interest rate swaps. This takes the bank's PPI redress bill to nearly £10 billion.

Lloyds also confirmed that it was working on the further sale of the government-owned stake in the lender.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Kames' Ennett: Trump good for US high yield, but beware Europe

Kames' Ennett: Trump good for US high yield, but beware Europe

Kames Capital’s head of high yield David Ennett believes the changing political landscape will be a positive for the US, but negative for Europe in 2017.

Play Philip Milburn: why inflation won't run out of control

Philip Milburn: why inflation won't run out of control

Kames bond fund manager views inflation as more of 'scare' than a 'problem' and is positioning his portfolios accordingly.

Play Henderson's Lofthouse on merger boost and political risk

Henderson's Lofthouse on merger boost and political risk

Ben Lofthouse talks through where he is finding income and what surprises await the global economy in the new year.

Read More
Your Business: Cover Star Club

Profile: why Patronus Partners' founder left the only job he ever knew

Profile: why Patronus Partners' founder left the only job he ever knew

'There was a definite idea of how things would work out over 12 months. When we look back, that was inaccurate'

Wealth Manager on Twitter