Out of the red? Lloyds to pay first dividend for six years

The bank, which is now 24 per cent-owned by the government, said it would pay a dividend of 0.75p for the 2014 financial year. The bank said it intends to pay out at least 50 per cent of its sustainable earnings in the medium-term.

The landmark in the lender’s recovery, resulting in payments totalling £535m, came as it announced a fourfold rise in annual profits to £1.8bn.

Lloyds was rescued after a £20bn taxpayer injection in 2008 at the height of the financial crisis led to it being 40 per cent owned by the government.

‘Major milestone’

Chancellor George Osborne said the pay-out, which required regulatory approval, was good news for millions of savers who hold Lloyds shares or have money invested in Lloyds through their pensions.

He added: “Today’s results are another major milestone in the recovery of the British economy from the great recession and the bank bailouts.”

Chief Executive Antonio Horta-Osorio said despite the positive results, there was still “more to do”. Mr Horta-Osorio said the capital position of the group has improved significantly, enabling the resumption of dividend payments.

While we recognise we have more to do, we enter the next phase of our strategy from a position of strength. Antonio Horta-Osorio

He said: “Over the last four years we have transformed Lloyds Banking Group into a low cost, low risk UK focused retail and commercial bank. This is due to the hard work of everyone at the group.”

The bank disclosed an annual bonus pool of £369.5m, a decline of 3.6 per cent on the previous year, and said its chief executive received £11.5m for 2014. Mr Horta-Osorio said he will take shares worth about £7m awarded under a plan set out in 2012, but he would not sell the shares until the government’s stake was significantly sold down.