Lloyds cheers investors with £2.1bn pay-out

Lloyds, which bought Halifax Bank of Scotland at the height of the banking crisis, said it would pay a special dividend of 0.5​p and an ordinary dividend of 2.25​p a share. ​Lloyds has around 240,000 investors in Yorkshire who owned shares in HBOS. The £2.1bn pay-out is a steep jump from last year’s £535m dividend.

Lloyds posted an 11 per cent fall in annual profits after revealing another £2.1​bn hit for payment protection insurance (PPI) mis-selling.

The lender said the extra charge for PPI took its total bill for the scandal last year to £4​bn.

This left bottom line pre-tax profits at £1.6​bn in 2015, but Lloyds ​said underlying profits rose ​five per cent​ to £8.1​bn. It confirmed it ​i​s sharing out a £353.7​m bonus pot among staff, paying out around £4,600 per employee. Lloyds ​said its annual staff bonus pot fell from £369.5​m in 2014.

​Market strategist Richard Hunter ​said: “Lloyds has provided a bright spot within a notoriously difficult sector, with a set of results underlying the swift progress it is making in an effort to return to former glories.

​“​The announcement of a special dividend could also augur a return to the more traditional view of Lloyds as a stable and generous dividend play. Less positively, PPI provisions remain a drag and have been a bane to Lloyds in particular over recent years.​“

Russell Galley, managing director of Halifax, said Halifax made “a significant contribution” to Lloyds’ 2015 results.

He pointed to the progress the former building society has made to ensure customers can bank online using a laptop, tablet or smartphone.

“We also made a number of innovative digital developments that helped us pass the five million mark for online banking customers,” he said.

​Halifax ​saw a 3.5 per cent increase in ​mobile users ​to ​2.95 million​ customers and a four per cent increase in ​online banking users​ to 5.1 million. Between Oct​ober​ and Dec​ember​, Halifax customers made 116 million online visits through their mobiles​,​ more than double the visits made on desktop​.

​Halifax lent mortgages to​ 70,000 first time buyers last year, lending them £10bn, and claimed first-time buyers saved an average of £1,200.

“Following significant demand from first-time buyers, Halifax was instrumental in helping the ​g​roup to achieve its commitment of supporting one in every four buyers to get on the housing ladder,” said Mr Galley.

In current accounts, Halifax attracted more than one in every five switchers in 2015 and in the fourth quarter it was the most switched to UK Bank.

​Lloyds’ chief executive​ Antonio Horta-Osorio “We continue to attract new customers through positive switching activity, particularly through the Halifax challenger brand.”

The​ Halifax Savers Prize Draw ​paid out over​ £8​m to more than 13,500 winners in 2015​ and it​ opened over 350,000 children’s savings accounts​.