Stripping out the effects of PPI, Lloyds said underlying profits grew 5.0 percent to £8.1 billion past year.
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Despite the drop in earnings, the lender – in which the United Kingdom taxpayer owns a stake of about 9 per cent – proposed a final dividend of 1.5p a share, taking the total payout for 2015 to 2.25p, along with a special dividend of 0.5p as part of a distribution of “surplus capital”. Even with Osborne’s promise of a 5% discount and up to £200 of loyalty bonus shares, the dividend makes Lloyds shares attractive at this price.
It was dragged down by a further £2.1-billion provision incurred in the fourth quarter to compensate customers who were mis-sold payment protection insurance (PPI).
15,500 Scots staff in line for bonus.
The government-backed bank was trading 9.8% higher at 68.3p a share despite revealing annual pre-tax profits had fallen to £1.6bn from £1.8bn, following a hike in PPI provision in the fourth quarter. The bank also charged £745m in relation to the disposal of TSB.
Lloyds added its annual staff bonus pot was down from £369.5 million in 2014. Lloyds also announced a one-off special dividend of 0.5p a share.
According to data compiled by Thomson Reuters, Lloyds Banking Group (LON:LLOY)’s stock is covered by 23 equity analysts across the Street, with 4 analysts giving it a Sell rating, 18 a Buy rating, while 5 consider it a Hold.
The results were also hit by a £837m charge to cover other potential fines and compensation claims, including packaged bank accounts, which offer insurance alongside current accounts.
The government has been gradually cutting its stake in the bank, from 43% at the time of the HBOS takeover in 2008 to less than 10% now. Lloyds Banking Group has a 52 week low of GBX 55.84 and a 52 week high of GBX 89.35. Over time, Lloyds expect to generate around 200bp of additional Common Equity Tier 1 capital each year, before dividends and to reach a cost:income ratio of 45% by the end of the decade.
Executive directors Horta-Osorio, Chief Financial Officer George Culmer and Chief Risk Officer Juan Colombas earned a combined 18 million pounds in 2015, down from 22.4 million pounds a year earlier, the report shows.
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Lloyds said its liquidity position “remains strong, with our total wholesale funding of £120 billion at the end of 2015 more than covered by our liquid assets of £123 billion”.
