Lloyds resumes dividend payments as annual profits hit £1.8bn
- Credit: PA
Lloyds Banking Group is to pay a dividend to its three million shareholders for the first time since it was rescued by the taxpayer in 2008.
The landmark in the lender’s recovery, resulting in payments totalling £535million, came as it announced a fourfold rise in annual profits to £1.8billion.
Lloyds was rescued after a £20billion taxpayer injection in 2008 at the height of the financial crisis led to it being 40% owned by the Government. That stake has since been reduced to 24%, meaning the Treasury will pick up £130m from the company’s 0.75p a share dividend payment.
Chancellor George Osborne said the pay-out, which required regulatory approval, was good news for millions of savers who hold Lloyds shares or have money invested in Lloyds through their pensions.
He added: “Today’s results are another major milestone in the recovery of the British economy from the great recession and the bank bailouts.”
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The bank disclosed an annual bonus pool of £369.5million, a decline of 3.6% on the previous year, and said its chief executive Antonio Horta-Osorio received £11.5m for 2014. This includes more than £7m from a long-term share-based plan which was linked to the bank’s performance for the three years since 2012.
Mr Horta-Osorio said the capital position of the group has improved significantly, enabling the resumption of dividend payments.
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He said: “Over the last four years we have transformed Lloyds Banking Group into a low cost, low risk UK focused retail and commercial bank. This is due to the hard work of everyone at the group.”
The improved annual profit for the Halifax owner came despite a £2.2billion hit to cover the mis-selling of payment protection insurance (PPI).
Total PPI costs for the final quarter of 2014 amounted to £700m and took the total set aside for the scandal to more than £12bn.
The bank also incurred £925m of charges from regulatory and conduct related issues, including its £217m fine for the fixing of the Libor rate.