Lloyds Banking Group has posted a 20.4% drop in statutory profit before tax as it took a hit for potential motor finance claims.
Britain’s biggest mortgage lender and parent of Bank of Scotland and Scottish Widows, said profit came in at £5.97 billion for 2024, compared to £7.5bn a year ago and below expectations of £6.39bn.
There is a £700 million provision for potential remediation costs relating to claims over car loans, adding to a £450m hit taken last year.
It said significant uncertainty remains around the final financial impact.
Despite this, Lloyds is proposing a 15% increase to its dividend for the year to 3.17p. This includes a final payout of 2.11p.
It is also planning a £1.7bn share buyback programme. Lloyds Banking shares have risen over 50% in the past 12 months to almost a six-year high.
Chief executive Charlie Nunn said: “We successfully completed the first phase of our ambitious and purpose-driven strategy, exceeding our revenue target and transforming our propositions and capabilities as we returned the business to growth.
“The group delivered a robust financial performance in 2024. Pleasingly and as expected, income grew in the second half of the year, supported by a rising banking net interest margin and momentum in other income.
“We also maintained discipline in costs, whilst asset quality remained strong. This performance enabled total shareholder distributions of £3.6bn.
“We are confident of generating more than £1.5bn of additional income from our strategic initiatives by 2026 as we build towards higher, more sustainable returns.”
Centrica
British and Scottish Gas owner Centrica has lifted its dividend after full-year profits beat forecasts.
The energy firm reported earnings before interest, taxation, depreciation and amortisation (EBITDA) of £2.3bn for the 12 months ended 31 December. While this was down from last year’s £3.5bn, it was ahead of analyst expectations of £1.6bn.
A proposed 13% rise in the dividend to 4.5p was accompanied by plan for a £500m extenstion to its buyback programme.
Chief executive Chris O’Shea said: “We are investing in the energy transition, ensuring our customers have the energy they need, when they need it at a price they can afford.
“Everything we do must deliver an appropriate return, and and our investments during 2024 demonstrate our ability to invest responsibly and profitably.”
Market report
The FTSE 100 was led lower by Glencore as the miner shed 5% after flagging a drop in profit for last year and a potential listing switch from London.
EasyJet was also among fallers, alongside British Airways owner IAG, after peer Jet2 highlighted growing costs pressures and warned margins could be squeezed ahead.
Housebuilders dropped too, weighed down by dashed hopes for an interest rate cut by the Bank of England next month on figures showing headline inflation rose to 3% in January.
The FTSE 100 closed 54 points lower at 8,712.53.
