Lloyds shares at highest level since Brexit vote

Lloyds Banking Group Plc jumped to the highest level since the Brexit vote after it boosted the dividend and said lending margins would hold up amid record-low UK interest rates.

Shares in Britain’s largest mortgage lender climbed as much as 4.1 per cent to their highest price since June 23rd. Excluding one-time charges, pretax profit rose 2 per cent to £1.79 billion (€2.21 billion).

Chief executive officer Antonio Horta-Osorio is looking to protect Britain’s largest consumer bank from the pressure of record-low interest rates by eliminating jobs and expanding in higher-margin lending with the acquisition of Bank of America’s MBNA UK credit-card business. Lloyds said its net interest margin would be more than 2.7 per cent in 2017 before the MBNA purchase, higher than many analysts had forecast.

Dividends

Lloyds said it would pay an ordinary dividend of 2.55 pence per share and a special dividend of 0.5 pence, up from total payouts of 2.75 pence per share a year earlier. The firm’s core Tier 1 capital ratio, a measure of financial strength, rose to 13.8 per cent from 13.4 per cent at the end of September, while the lender said it would probably generate between 170 and 200 basis points of capital each year.

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Pretax profit including restructuring and conduct charges was £973 million, compared with a loss of £507 million a year earlier. – (Bloomberg)