Wealth Manager - Essential news for investment professionals

Register to get unlimited access to all of 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 Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Play Tesco, Japan and the rise of the central banker

Tesco, Japan and the rise of the central banker

 Libby Ashby and leading wealth managers scrutinise the food retail sector, Japan’s consumption tax hike and political risk in the markets.

Play Colin McLean's mid-cap picks

Colin McLean's mid-cap picks

The SVM director and fund manager on his pick of the UK mid-caps.

Your Business: Cover Star Club

Profile: Psigma's Edinburgh boss on why he is in Scotland long term

Profile: Psigma's Edinburgh boss on why he is in Scotland long term

When Tim Wishart agreed to launch an Edinburgh office for Psigma he was not expecting to  head the company’s first overseas team

Wealth Manager on Twitter