Lloyds to resume dividend payments as it pledges £1.8bn more for PPI
Lloyds Banking Group has just announced that it’s set aside a further £1.8bn as compensation for so-called payment protection insurance misselling. That’ll mean the state-owned bank will have laid aside a total to the tune of almost £10bn.
It's also made further provision of £130m regarding the sale of interest rate hedging products to some small and medium-sized businesses.
Moreover, Lloyds says that, despite the payout, it still expects to report “substantial progress” and an underlying profit of £6.2bn for 2013, ahead of analysts’ consensus expectations and over double that of 2012.
And given the progress, it has begun discussions with the Prudential Regulatory Authority on resuming dividend payments.
From the statement:
…the Board expects that it will apply to the PRA in the second half of 2014 to restart dividend payments, commencing at a modest level. The Board expects thereafter to have a progressive dividend policy with the aim of moving, over the medium term, to a dividend payout ratio of at least 50 per cent of sustainable earnings.
Shares are down over three per cent on the news:
(Google)