Economy

Lloyds hail 'landmark year' as profits surge by 24% to £5.3 billion

Lloyds hail 'landmark year' as profits surge by 24% to £5.3 billion

The bank posted a statutory profit of £5.3bn for the year to the end of December 2017, up 24% on 2016 and the highest level since 2006 - but below analysts' expectations of £5.7bn. Additionally, it said that it also intends to buy back £1bn worth of shares.

Revenues at the group increased nearly 6% to £18.5bn, while costs rose slightly to £8.1bn.

António Horta-Osório, Lloyds' chief executive, said in a statement: "The external environment is evolving rapidly and I am confident that this exciting and ambitious plan, with the significant additional investment, will mean we remain at the forefront of United Kingdom financial services, and continue to deliver our mission of helping Britain prosper".

The bailed-out lender is preparing to update investors on its full-year performance on Wednesday when the group's chief executive António Horta Osório will unveil his new three-year strategy for the bank which returned to full private ownership last year. The lender had to pay £600m in the fourth quarter, after weekly complaints rose from 9,000 to 11,000.

Britain's biggest high street bank delivered a 41pc jump in net profits to £5.3bn for 2017, prompting it to raise its dividend by 20pc to 3.05p per share and announce a share buyback of up to £1bn - equating to a total return to investors of up to £3.2bn.

The bank's planned £3 billion pounds in strategic investment will be spent largely on digital technology and staff, although the bank said it remained committed to its branch network, which has seen scores of closures since the financial crisis.

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Yet Lloyds continues to be haunted by its past conduct, with a total of more than £2.5bn set aside for "legacy" issues for the year, up from £2.1bn the year before.

Lloyds's overall bill for the scandal now stands at £18.7bn. JPMorgan Chase & Co. upped their price target on Lloyds Banking Group from GBX 83 ($1.15) to GBX 85 ($1.17) and gave the stock an "overweight" rating in a report on Thursday, October 26th.

Laith Khalaf, senior analyst at Hargreaves Lansdown stockbrokers, said: "There's a lot to like in Lloyds' numbers, with profits rising, costs under control, and prodigious amounts of cash being thrown off to shareholders".

Lloyds Banking Group PLC (LON:LLOY)'s share price traded up 0% on Monday.

"With more rate rises waiting in the wings, this looks like a tailwind that's going to be blowing behind Lloyds for the foreseeable future".


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