Lloyds Banking Group reported a sharp fall in profits for 2020 but resumed paying a dividend, as outgoing CEO António Horta-Osório set out fresh targets to expand the bank’s insurance and wealth business and further cut costs.
Britain’s biggest domestic lender reported pretax profits of 1.2 billion pounds ($1.70 billion), well down on 4.4 billion pounds the previous year, after pandemic lockdowns shrank household spending and drove up provisions for bad loans.
The profit figure nonetheless beat an average of analyst forecasts of 905 million pounds.
Among the targets set out, Lloyds said it would increase funds from customers in insurance and wealth by 25 billion pounds by 2023 and cut office space by 20% within three years.
Costs overall would be cut below 7.5 billion pounds this year, the lender said.
Lloyds set aside 4.2 billion pounds to cover loans expected to sour, below a 4.5 – 5.5 billion pound range previously given.
The bank said it would pay a 0.57 pence dividend per share, the maximum allowed by the Bank of England and above a forecast of 0.53 pence.
Horta-Osório is leaving Lloyds after a decade running the bank to stand for election as chairman of Credit Suisse in April, with HSBC executive Charlie Nunn set to replace him on August 16.
Similar to rivals HSBC, NatWest and Barclays in recent days, Lloyds’ profits were dented by a dip in customer spending and wafer thin central bank interest rates.
Lloyds was forced like other banks to suspend payouts last year at the behest of the Bank of England to shore up its finances in the pandemic.
The bank’s core capital ratio – a key measure of financial resilience – increased to 16.2%, compared to 15.2% in September.
($1 = 0.7048 pounds)