Lloyds Banking Group PLC on Thursday reported a rise in pretax profit for the fourth quarter of 2021 that fell short of market views as it booked high fraud-related costs, and said it intends to launch a share buyback program of up to 2 billion pounds ($2.71 billion).
The U.K. bank posted a pretax profit for the period of GBP968 million compared with GBP792 million for the same period a year earlier and with an expectation of GBP1.28 billion, according to its compiled consensus.
For the full year, Lloyds said it benefited from a return to net impairment credit in the year and higher income given the improved macroeconomic outlook for the U.K. compared to the prior year.
However, the bank added that in the fourth quarter, its pretax profit suffered a reduction on the run rate in the first three quarters due to increased remediation and restructuring costs.
Operating costs for the full year rose 1% to GBP7.6 billion, with remediation charges of GBP1.30 billion. These charges included GBP775 million booked in the fourth quarter, with GBP600 million of them being booked in the quarter to compensate the victims of HBOS Reading firm scandal, which took place between 2003 and 2007.
HBOS was acquired by Lloyds Banking Group in 2009.
Operating costs for the quarter, therefore, increased to GBP2.03 billion from GBP1.87 billion for the previous quarter of the year.
The FTSE 100-listed bank’s net income rose to GBP4.12 billion from GBP3.59 billion for the year-earlier period and came in higher than a company-compiled consensus of GBP3.88 billion.
The bank closed the year with a common equity Tier 1 ratio–a key measure of balance-sheet strength–of 16.3%, in line with market expectations.
Lloyds’s return on tangible equity stood at 13.8%. The bank last said it expected to close the year with a return RoTE of more than 10%.
The board raised its full-year dividend to 2.0 pence from 0.57 pence a share for 2020. It was anticipated to be 2.07 pence, according to the bank’s compiled forecasts.
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