Lloyd's Bank recently announced plans to return excess capital to shareholders via an interim dividend of £0.75 per share or £535million to shareholders. It is not everyday that we hear about banks and dividends in the same sentence in today's capital constrained world, so we should all sit up and take note! Such a payment is a step towards the bank's plans to target a 50% payout ratio over time, are justified given the bank's CT1 ratio of 13%+, and is consistent with still achieving a 14% CT1 ratio by the EOY. Such measures also dovetail into plans by the UK government to sell off part or all of its remaining 15% stake in the high street bank.
The UK government's plans to divest via a potentially discounted retail oriented offering however is throwing up controversy (as reported in Yahoo Finance) over the weekend, suggesting such plans fail to realise best execution for the tax payer. Read more about these plans and resulting controversy at https://uk.news.yahoo.com/lloyds-shareholders-governments-sale-plan-060527919--sector.html#ychrlUg.
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