Lloyds Bank to give £4bn back to shareholders

It came as Lloyds reported a 24 per cent increase in net profits to £4.4 billion, which missed market expectations for £4.6 billion, on net income that rose by 2 per cent to £17.8 billion.

Its chief executive, António Horta Osório, said: "We are planning for a deal and a smooth Brexit transition that should lead the economy to grow at around the same pace you have now of about 1-1.5%".

Lloyds hiked the dividend by 5% to 3.21p per share and a proposed share buyback of up to £1.75 billion, which represents a total return of up to £4 billion to investors.

Lloyds Banking Group has revealed a bumper return to shareholders by pledging to buy back up to £1.75 billion of shares and increasing its dividend despite posting weaker than expected annual profits.

Charges related to the PPI mis-selling scandal fell to £750 million from £1.65 billion in 2017, although the company did book an additional £200 million charge in the fourth quarter of 2018.

Despite an uncertain near-term outlook, he said Britain's economy was resilient, with record employment and low interest rates, and wage growth outstripping inflation.

Lloyds is seen as hugely exposed to any downturn through its billions of pounds of lending to British consumers and businesses. Pre-tax profits were up 13 per cent to nearly £6 billion.

Lloyds expects to increase return on tangible equity by 14% to 15% this year with strong profits and lower charges as well as a net interest margin of about 2.9%.

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He added that in 2018 the group "made significant progress" in its three-year strategic plan.

"2018 has been a year of strong strategic and financial delivery, as we build on our unique capabilities to transform the group to succeed in a digital world".

Pay details were also released alongside Lloyds' results and showed that Mr Horta-Osorio saw his base salary rise 1.6% in 2018 to £1.24 million.

Horta-Osorio's total pay package for the year slipped to 6.3 million pounds from 6.4 million pounds the previous year, but remains significantly higher than his counterparts at RBS and HSBC.

The bank's gender pay gap narrowed by 1.3% a year ago to 31.5%, which it claims is better than the average for financial services firms.

"With the claims deadline looming in August, that's going to be a millstone the bank will be glad to leave behind", said Laith Khalaf, a senior analyst at Hargreaves Lansdown.

The boss of Lloyds Banking Group, Britain's biggest high street bank, said he believes the United Kingdom economy will continue to grow after Brexit "assuming there is a deal" as the bank unveils a £4bn dividend for investors.

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