This post was originally published on this site.
Lloyds (LLOY.L) has launched a £1.75bn share buyback after reporting a jump in annual profits to £6.7bn, comfortably ahead of market expectations.
The FTSE 100 (^FTSE) lender said pre-tax profit rose 12% in 2025, beating the £6.4bn forecast by analysts, as income proved resilient despite accelerating interest rate cuts. The Bank of England reduced its base rate by a full percentage point over the year. It also came in above the £5.97bn profits of 2024.
Net interest income increased 6% to £13.6bn compared with 2024, when rates were at a post financial crisis high of 5.25%. Overall income climbed 7% to £18.3bn.
The bank said it would return further capital to shareholders through a £1.75bn buyback, taking total distributions for the 2025 financial year to about £3.9bn. Lloyds (LLOY.L) also raised its ordinary dividend by 15% year on year to 3.65p a share.
Read more: UK dividends forecast to grow to £88.8bn in 2026
Chief executive Charlie Nunn said: “Looking ahead to 2026 and the culmination of the five year strategy we set out in 2022, our continued business momentum and strategic delivery enable us to upgrade guidance.”
“The sustained strength in performance means we are well positioned for 2026 and beyond.”
Nunn said the group intended to outline the next phase of its strategy in 2026.
The results showed remediation costs of £968m, including £800m set aside for the potential impact of motor finance commission arrangements.
Underlying impairment charges rose to £795m from £433m a year earlier, which Lloyds (LLOY.L) described as reflecting strong and stable credit performance. Impairments were broadly flat at £177m in the fourth quarter.
The bank said it would pay a final dividend of 2.43p a share, taking the total payout for the year up 15% to 3.65p.
The bank also lifted its profitability target, saying it now expects to make a return on tangible equity greater than 16% in 2026, having forecast just 12% for 2025.
Read more:
Download the Yahoo Finance app, available for Apple and Android.