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Lloyds Bank set to to join dividend payout jamboree

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The full-year dividend is expected to be 2.07p and accompanied by a bumper share repurchase programme

Britain’s high street banks have been falling over themselves to hand out money over the past couple of weeks and tomorrow it is Lloyds’ turn to open the dividend taps.

Dividend and buyback payments so far have been huge and Lloyds is likely to be no different to its peers.

A big retail investor favourite, the full-year dividend is expected to be 2.07p and accompanied by a bumper share repurchase programme, say analysts. 

A dividend of that level would imply a yield of around 4%, but it is what the bank might indicate for the coming year where the City will be looking.

Deutsche Bank predicts Lloyds could target a return on tangible equity of greater than 12% from 2024. 

Going forward,  that means a 40%-45% dividend payout ratio supplemented by an annual buyback of £1bn – the equivalent to an annual yield of 8%-9%.

On an earnings basis, UBS expects fourth-quarter underlying profit before tax of £1,805mln to be announced tomorrow, up 26% year-on-year (YOY). 

Net interest income is expected to rise 7% YOY and non-interest income to advance 8%. 

The CET1 ratio – a measure of balance sheet strength – is seen rising one percentage point from a year earlier to 17.2%, a huge number and underling how much cash the banks have to hand out at present.

Shares today were up 1.5% at 52.1p.



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