Lloyds has more than £4bn in surplus capital and rivals Barclays, HSBC and Standard Chartered all bought back shares last year
Lloyds Banking Group PLC (LSE:LLOY) is expected to announce a £1bn share buyback programme that will start next month, according to a news report.
The buyback will be announced alongside the bank’s full-year results, the Daily Mail reported.
In October last year, Lloyds said it had more than £4bn in surplus capital, and rivals Barclays PLC (LSE:BARC), HSBC PLC (LSE:HSBA) and Standard Chartered PLC (LSE:STAN) all bought back shares last year.
Banks are sitting on surplus capital after they were forced by the Bank of England to halt dividend payments in 2020 during the pandemic to shore up their balance sheets.
In a presentation seen by The Mail on Sunday, Lloyds director of investor relations Edward Sands said: “We have a very strong capital position that is likely to lead the board into a conversation around surplus capital distributions over and above the ordinary dividend.
“The market is expecting a buyback of circa £1bn – so a reasonably meaningful buyback programme.”
Analysts are forecasting a dividend of 1.99p per Lloyds share, totalling £1.41bn, for 2021, rising to £1.59bn for 2022 and £1.79bn for 2023.
Chief executive Charlie Nunn, who replaced Antonio Horta-Osorio last summer, is expected to unveil his new strategy for the bank alongside the results. His plans are believed to include the expansion of wealth management, insurance, corporate banking and its role as a landlord, the Mail said.
Read More: Lloyds poised to begin £1bn share buyback