Lloyds Banking Group PLC (LON:LLOY) is working on a plan to double the scale of its share buyback scheme next year to £2bn, the Financial Times has reported.
Citing sources familiar with the plan, the newspaper said the FTSE 100-listed lender hopes to return £4.5bn of capital to shareholders through the buyback and by paying a higher dividend.
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The possible comes after the bank completed a £1bn buyback earlier this year amid an improved outlook.
The source told the FT that the buy-back plans were at an early stage and that no finalised decision would take place until a meeting of the bank’s board in February.
Lloyds is due to announce its third-quarter results this Thursday and analysts at UBS expect an “uneventful set of numbers despite the trees to be felled and ink spilt poring over the figures”.
In the first half, Lloyds took a fresh £460mln provision for its compensation scheme for the payment protection insurance (PPI) mis-selling scandal but pre-tax profit still increased 23% to £3.1bn on the back of higher income and lower costs.
For the third quarter, UBS predicts pre-tax profit of £1.96bn, including remediation costs of £100mln, compared to a profit of £2.08bn last year. Lloyds is expected to generate a total income of £4.68bn for the period, up from £4.62bn last year.