Lloyds Banking Group has reiterated its desire to pay a dividend amid reports the Financial Services Authority will block a payout.
In a statement the bank said: 'We have always said we would like to recommence dividend payments, when the financial position of the Group and market conditions permit, and after regulatory capital requirements are defined and prudently met. We work productively with all regulators in that respect.'
The bank has withheld its dividend since the state bought a 43% stake in the lender at the height of the financial crisis in 2008.
According to the Sunday Times, Lloyds chief executive Antonio Horta-Osorio (pictured) wants to pay a small dividend from the profit it expects to make next year, which would be perceived as a sign of its return to health.
However, the paper says the City watchdog is threatening to block the move on the view the bank should store its capital to protect itself from a break-up in the eurozone.
At 9.40am shares in Lloyds were 1.75% weaker at 37.15p.