Lloyds Bank resumes dividend despite 72% drop in profits
Bank of Scotland owner Lloyds Banking Group has resumed dividend payments despite reporting a 72% drop in profits.
For the year ended 31 December 2020, the bank’s profits dropped to £1.2 billion, down from £4.39bn last year. Lloyds Banking Group has also allocated £4.bn to cover future bad loans provided during the COVID-19 crisis.
The bank will resume dividend payments with a 0.57 pence a share payout.
Lloyds reported a net income of £14.4bn, down 16% from 2019 with a net interest income of £10.8bn, a decrease of 13% from the previous year.
The bank’s total costs for the year reached £8bn, 4% lower than in 2019, which Lloyds dais would enable continued investment in digital projects and enhanced support for customers during the ongoing pandemic.
Lloyds Bank also announced it had lent over £12bn to businesses during the pandemic through Government-backed schemes, including Bounce Back Loan, Coronavirus Business Interruption Loan and Coronavirus Large Business Interruption Loan schemes.
Around 1.3 million payment holidays were granted to the bank’s retail customers and 34,000 capital repayment holidays to small businesses and corporates to alleviate temporary financial pressures whilst also supporting a number of Corporate and Institutional clients with Covid Corporate Financing Facility advances.
António Horta-Osório, Lloyds Bank chief executive, said that the impact of the coronavirus pandemic on the people, businesses and communities in the UK and around the world in 2020 has been ‘profound’.
He said: “The Group’s unique business model, customer-focused strategy and transformation in recent years positioned us well to respond effectively to the needs of our customers in 2020. At the same time, the Group’s financial performance in the year has been impacted by the pandemic.
“Looking forward, significant uncertainties remain, specifically relating to the coronavirus pandemic and the speed and efficacy of the vaccination programme in the UK and around the world.
“I remain confident that the Group’s clear purpose, unique business model, significant competitive advantages and the customer focused evolution of our strategy we have announced will ensure that the Group is able to Help Britain Recover and in so doing, help transition to a sustainable economy.”