LLOYDS is in late stage talks with regulators to allow it to resume paying a dividend, City A.M. understands.
A decision is expected to be made by 13 February when the bank reports its full-year results.
Lloyds returned to profit in the first half of the year and expects to report stronger figures in the fourth quarter.
Over the year, each area of lending has increased, particularly small business and mortgage lending.
A key factor in the way of a dividend is the bank’s capital levels.
However, Lloyds reported a capital ratio of 9.9 per cent in the third quarter and is expected to have risen above 10 per cent in the fourth quarter, an important threshold which may enable it to pay out to shareholders.
Last year chief executive Antonio Horta Osorio said he wanted Lloyds to become a high dividend stock over the coming years.
Any return to dividends could also help the government sell off its stake in the bank – it sold a six per cent stake for £3.2bn in September but still holds more than 30 per cent of the lender.
Lloyds declined to comment.