LLOY Lloyds Banking Group Plc

--Lloyds Banking Group's fourth-quarter pretax profit and net income fall was better than the market expected

--The bank has resumed dividends by declaring a distribution of 0.57 pence a share

--Lloyds expects to reduce operating costs further in 2021.

By Sabela Ojea

Lloyds Banking Group PLC reported Wednesday a nearly halved pretax profit for the fourth quarter of 2020 and resumed paying dividends.

The FTSE 100 lender made a pretax profit of 792 million pounds ($1.12 billion) compared with GBP1.45 billion for the same period a year earlier. It was expected to post a pretax profit of GBP471 million, taken from a compilation of 23 analyst models. Pretax profit was hit by lower income and an increased impairment charge.

Net income fell to GBP3.59 billion from GBP4.13 billion for the year-earlier period. Net income was anticipated to reach GBP3.43 billion, according to analysts.

The bank booked impairments of GBP128 million for the period, when it was anticipated to book impairment charges of GBP586 million.

The board declared a dividend of 0.57 pence a share, down from 3.37 pence a share for 2019. The amount was the maximum allowed under the U.K. Prudential Regulation Authority's temporary framework on 2020 distributions. The board was expected to declare a dividend of 0.53 pence a share.

Lloyds' common equity Tier 1 capital ratio --a measure of a bank's financial strength-- stood at 16.2% from 13.8% at Dec. 31, 2019. The bank was expected to reach a ratio of 15.4%, according to a compilation of 23 analyst models.

For 2021, the lender said operating costs will be reduced further to around GBP7.5 billion, adding that it also expects to improve profitability with a return on tangible equity of between 5% and 7%. Its 2020 RoTE stood at 3.7%, it added.

Regarding the appointment of Charlie Nunn as chief executive and executive director of the bank, Lloyds said he will start the role on Aug. 16. Mr. Nunn is joining from HSBC Holdings PLC, where he is head of personal banking and wealth management, to replace current Lloyds CEO Antonio Horta-Osorio.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

February 24, 2021 03:09 ET (08:09 GMT)

Lloyds Banking (LSE:LLOY)
Historical Stock Chart
From Mar 2024 to Apr 2024

Lloyds Banking (LSE:LLOY)
Historical Stock Chart
From Apr 2023 to Apr 2024