London - Lloyds Banking Group, Britain’s largest mortgage lender, said it will resume dividend payments after reporting its first annual profit in five years.
Net income was 1.5 billion pounds ($2.3 billion) compared with a 838 million-pound loss a year earlier, the London-based lender said on Friday. That missed the 1.8 billion-pound average estimate of 16 analysts surveyed by Bloomberg. Lloyds will pay a dividend of 0.75 pence a share, its first payout since taking a bailout in the financial crisis.
Lloyds Chief Executive Officer Antonio Horta-Osorio, 51, has been cutting thousands of jobs and shrinking the bank’s retail network to help return the lender to full private ownership since taking over in 2011. While strengthening economies in the UK and Ireland helped bolster earnings, the CEO’s efforts have been hampered by record provisions for insurance products that customers didn’t want or need.
“Our profitability and capital position have improved significantly,” Horta-Osorio said in the statement. “While we recognise we have more to do, we enter the next phase of our strategy from a position of strength.”
The bank took a 700 million-pound charge for improperly sold payment protection insurance products in the fourth quarter.
Annual underlying profit, which excludes items such as customer redress and restructuring charges, rose 26 percent to 7.8 billion pounds from a year earlier.
The UK government said earlier this month it had sold 500 million pounds of Lloyds shares under a plan to reduce its stake in the lender ahead of general elections in May. It now owns about 24 percent of the lender.
Bloomberg