Britain’s Lloyds Bank profit rose 24% and announced 1.75 billion pound ($2.28 billion) share buyback

Britain’s biggest mortgage lender Lloyds Banking Group posts 24% profit rise, unveils $2.3 billion buyback

The bank posted net profits of 4.4 billion pounds for 2018, below expectations of 4.6 billion pounds.

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LONDON (Reuters) – shrugged off mounting concerns over Brexit to unveil a 4 billion pounds dividend and share buyback bonanza for investors on Wednesday, despite booking weaker-than-expected growth in profits for 2018.

Britain’s biggest mortgage lender posted a 24 percent rise in net profits to 4.4 billion pounds, below expectations of 4.6 billion pounds, according to a company-provided average of analyst forecasts.

It pledged to pay a 3.21 pence total dividence and unveiled a 1.75 billion pound ($2.28 billion) share buyback, which would still leave the bank’s core capital ratio – a key measure of financial strength – at 13.9 percent.

The bank also said it had made 1 billion pounds of strategic investment in digitising its business and bulking up its wealth management operations.

Chief executive Antonio Horta Osorio insisted Britain’s economy remained fundamentally strong despite widespread warnings of potential economic turmoil ahead sparked by Britain’s withdrawal from the European Union.

“Over 2018 the UK economy has proven itself to be resilient with record employment and continued GDP growth,” he said.

“Although the near term outlook for the UK economy remains uncertain, our strategy continues to deliver for our customers.”

Despite Lloyds’ bullish tone on the economy, impairments for the year increased by 18 percent to 937 million pounds but it did not make a provision for a potential hit from Brexit, unlike its rivals HSBC and Royal Bank of Scotland.

Lloyds also set aside a further 200 million pounds to compensate customers missold payment protection insurance, taking its total provision to 750 million pounds in 2018.

Source: Reuters

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