Lloyds hopes for a 2013 dividend

Tim Wallace
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LLOYDS hopes to pay a dividend for this year after returning to profit, chief executive Antonio Horta Osorio revealed yesterday.

The bailed out bank began its privatisation last month when the government sold a £3.2bn stake in the lender, and resuming dividend payments would be another key step on the return to normality for Lloyds.

The bank reported an underlying profit of £1.5bn in the third quarter, up 83 per cent on the year.

And its CRD4 fully loaded capital ratio increased from 8.1 per cent to 9.9 per cent, just shy of its 10 per cent target and the level at which it hoped to start paying dividends.

Net interest margins are on course to hit 2.11 per cent, above the 1.98 per cent the bank had previously forecast and driving profits up.

And Lloyds said it has just £66bn of non-core assets left after selling its Australian arm, meaning its push to slim down the units is complete.

Horta Osorio said the bank is in talks with regulators about restarting the dividend and hopes to know when this is possible by the end of the year.

The bank’s core loan book is growing in all segments, including £6.7bn of mortgage loans for first time buyers in the year to date, up from £4.4bn a year earlier. And lending to small firms increased five per cent as part of a plan to lend £6.3bn.

However, Lloyds reported a statutory loss of £1.3bn in the quarter, with PPI bills, restructuring costs and a deferred tax writedown all hitting the bottom line.

The £750m hike in its PPI compensation provisions particularly stung as the bank thought it had finished hiking its redress bills.

The increase takes its total redress provisions to more than £8bn.

Lloyds’ shares fell 2.02 per cent on the day.