Lloyds to return 3.1bn to investors as profits surge past forecasts

"Lloyds Banking Group is handing more than £3.1 billion back to shareholders after delivering stronger-than-expected annual profits, underlining the financial firepower of Britain's biggest domestic lender. The FTSE 100 bank reported full-year pre-tax profits of £6.66 billion, up 12 per cent on 2024 and comfortably ahead of the £6.38 billion forecast by City analysts. The performance was supported by lower-than-expected bad loan provisions and growing income from non-lending activities."

"Lloyds announced a final dividend of 2.43p per share, up from 2.11p a year earlier, equating to a £1.43 billion cash payout to investors. In addition, the bank revealed plans for a share buyback of up to £1.75 billion, taking total capital returns for the year to more than £3.1 billion. The lender said it would now review excess capital distributions every six months, alongside its ordinary dividend, reflecting "increasing confidence in our capital generation"."

"Lower impairments helped drive the profit beat. Charges for bad loans totalled £795 million, well below the £920 million expected by analysts. Lloyds has also been pushing to diversify beyond traditional lending, under chief executive Charlie Nunn, expanding fee-based income from areas such as wealth management and insurance. While underlying net interest income rose 6 per cent to £13.6 billion, non-interest income increased by 9 per cent to £6.1 billion, highlighting the growing contribution of these newer revenue streams."

Lloyds Banking Group reported full-year pre-tax profits of £6.66 billion, up 12% year-on-year and above analysts' forecasts. The bank declared a final dividend of 2.43p per share and a share buyback of up to £1.75 billion, taking total capital returns to more than £3.1 billion. Charges for bad loans totaled £795 million, below expectations, supporting the profit outturn. Underlying net interest income rose 6% to £13.6 billion while non-interest income grew 9% to £6.1 billion as fee-based businesses expanded. The bank will review excess capital distributions every six months amid debate over forthcoming capital rule changes.

Read at Business Matters