27th February 2015
Lloyds has announced it will resume dividend payments to shareholders for the first time since the financial crisis.
The bailed-out bank, which is just under a quarter owned by taxpayers, announced a dividend payment of 0.75p per share will be paid to its three million shareholders this year. The total cost of the payment will be £535 million and the largest share of £130 million will go to the government.
Dividends were stopped in 2008 at the peak of the financial crisis when the government ploughed £20 billion into propping up the bank, with the government taking a 41% share in the bank.
The announcement was made in its 2014 full year results, which revealed pre-tax profits of £1.8 billion, up from £415 million in 2013.
Shares were up 1.1% this morning on the news.
The bank has improved its profits and capital position which means the Bank of England was able to give permission for a dividend payout.
e bank has won permission to pay a first dividend since 2008 from the Bank of England, after improving profits strengthened its capital position significantly.
However, the bank also announced it had made a further £700 million provision in Q4 to settle payment protection insurance mis-selling cases – meaning it has now set aside £2.2 billion to repay consumers.
Chancellor George Osborne said: ‘Today’s results are another major milestone in the recovery of the British economy from the Great Recession and the bank bailouts.
‘This is good news not only for taxpayers, who will get at least another £100 million from the dividend, but also for millions of savers who hold Lloyds shares or have money invested in Lloyds through their pensions.
‘Thanks to the strengthening economy and the turnaround at Lloyds, we have already recovered almost £8 billion of taxpayers’ money, reducing our shareholding below 24%.’