Lloyds Banking Group (LLOY.L) is paying its first dividend in more than six years after reporting a rise in profit and improvements in its capital strength, a milestone in the bank's recovery after it was bailed out during the financial crisis.
The bank, which was rescued at a cost of 20 billion pounds to British taxpayers, said it would pay a dividend of 0.75 pence for the 2014 financial year.
Chief Executive Antonio Horta-Osorio said Lloyds, which offered some of the highest dividends in Britain before the crisis of 2007-2009, intended to pay out at least half of its sustainable earnings in the medium term.
Lloyds reported an underlying profit of 7.8 billion pounds, up from 6.2 billion the year before and ahead of the market expectations for a profit of 7.5 billion pounds.
The bank said its core Tier 1 ratio, a key measure of its financial strength, rose by 250 basis points to 12.8 percent.
"Today's results are another major milestone in the recovery of the British economy from the great recession and the bank bailouts," said Britain's finance minister George Osborne.
The government will receive a dividend of 130 million pounds which Osborne said would be used to reduce the national debt. It has already raised nearly 8 billion pounds from the sale of shares in the bank, reducing its stake to below 24 percent.
