Lloyds Declares Dividend; Buys Retirement Platform

Lloyds Banking Group sees £2 billion profit in last quarter and will issue a dividend

July 30, 2021
Lloyds Declares Dividend; Buys Retirement Platform
CompareBanks is reader-supported. When you click through some links on our site, we may earn an affiliate commission. Learn more

Lloyds Banking Group has announced its latest financial results, with a £2 billion profit in the three months to the end of June. As a result, the banking institution has declared it will be making dividend payments for the first time since the Bank of England removed its cap.

Alongside these positive financial results, the group has also stated that it is buying the investment and retirement platform Embark Group for £390 million.

A positive swing

The £2 billion profit for the April to June period contrasts heavily with the £676 million losses for the same period in 2020, when of course the bank had to set aside £2.4 billion to cover the potential losses caused by defaults as a result of the COVID-19 pandemic.

Of that fund set aside, the bank has said it can now release £333 million of the emergency fund due to the increased success of this year, and the improved financial outlook of the UK’s economy as a whole.

The reported profits far exceeded expectations – analysts had predicted that the company would report a profit figure closer to £1.2 billion. For the actual profit to exceed that by 66% shows a very positive outlook for the banking industry as a whole.

The group has also declared that mortgage lending has increased by 2% – around £6.6 billion – since the end of March, which means that the home loan portfolio of the group now stands at around £300 billion, despite a lot of competition and low rates from competitors

The dividends being reintroduced are payments at 0.67p per share. It follows the temporary ban on dividend payments placed on all banks by the Bank of England at the start of the pandemic. The restrictions were relaxed in January and fully removed in early July.

“The group has delivered a solid financial performance with continued business momentum, bolstered by an improved macroeconomic outlook for the UK… while we are seeing clear progress in the vaccine rollout and emergence from lockdown restrictions, the coronavirus pandemic continues to have a significant impact on the people, businesses and communities of the UK.”

Lloyds’ interim chief executive, William Chalmers

Embarking on a new investment

The new investment in Embark Group by the Lloyds Banking Group is an indication that it is secure enough to begin growing its portfolio and potential earnings. The lender has said that Embark’s technology will allow it to complete its offering in the growing self-directed wealth management market, giving customers with Lloyds a better choice for retirement investments.

It’s seen as a significant investment, and analysts are calling it the most important deal for the banking group since the 2008 bailout by UK taxpayers that gave the bank a £20 billion injection of capital.

Embark was formed in 2021 by Phil Smith, the current chief executive. It has around 500,000 existing customers and has itself already invested in acquisitions, most notably Zurich’s investment and retail platform.

Andrew Cook
Andrew Cook
Hi, I'm Andrew and I am a news writer for CompareBanks. My main focus is on digital and online banks and looking at the banking landscape is changing within the UK and around the world.

Related Articles

71% rise in bank transfer fraud this year
71% rise in bank transfer fraud this year
A new report from trade association UK Finance shows that bank transfer fraud losses...
September 22, 2021
JPMorgan’s Chase Bank Launches This Week
JPMorgan’s Chase Bank Launches This Week
JPMorgan’s new UK digital bank Chase will launch this week, hoping to make a dent...
September 20, 2021
HSBC Issues OTP Fraud Warning
HSBC Issues OTP Fraud Warning
HSBC has issued a warning to its customers after scammers have started using a new...
September 16, 2021
Lloyds Launches New Switching Offer As Share Prices Dip
Lloyds Launches New Switching Offer As Share Prices Dip
Lloyds Bank has announced a new switching offer to entice customers to the bank,...
September 11, 2021

Mentioned Banks

About Lloyds Bank Lloyds Bank is a British retail and commercial bank. One of the ‘Big Four’ clearing banks, it was founded in Birmingham in 1765. It is the largest retail bank in...
Learn More

Comments

Leave a Comment