Let's be honest, this was not the announcement that Lloyds boss AntÓnio Horta-OsÓrio wanted to make. The Portuguese banker had wound up City analysts to such an extent that they had started to believe that the bailed out bank could start paying out dividends as soon as the full-year results in a fortnight's time. But another staggering provision for payment protection insurance mis-selling has put an end to any hopes of such a quick resumption of payouts to shareholders, which had been banned until last year under the terms imposed by the EU on the banks' £20bn 2008 bailout. The latest £1.8bn for PPI takes the total now set aside by Lloyds to almost £10bn. To put that into perspective it is as if Lloyds had paid for the entire nation to have a 2.5p reduction in the basic rate of income tax for a year. That is a quite a bill from a bank whose previous boss Eric Daniels insisted Lloyds had been "on the side of the angels" when it came to PPI sales. Daniels might be history but this management team also has some explaining to do. One moment Lloyds says the number of claims will start to wind down, now the bank says it expects another 550,000 complaints to be made. The latest provision is larger than many analysts had been expecting. It is amazing how the discipline of putting together a prospectus for a share sale to retail investors can focus the mind. While the bank is now six months behind on its dividends hopes, it is still rattling along in the process of getting the taxpayer off its shareholder register. After the formal results on 13 February the next big date to watch is 6 March – the day the annual report is published. Aside from spelling out what bonuses are being clawed back from Daniels and other former executives, the fully audited results are an obvious moment for big city investors to be offered another tranche of shares – as they were in September – and shortly afterwards to push the button on the retail offering to small investors. Lloyds already has 2.7m private investors thanks to its rescue of HBOS (many of its investors had "free" Halifax shares) and it could get millions more through a retail offering. Then Horta-OsÓrio's promises on the dividend will become an even more important story.
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