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Lloyds to unveil £1bn share buyback in annual results

Lloyds's plan is understood to include a £2.6bn investment as well as £415m in bonuses for staff - PA Wire/PA Images
Lloyds's plan is understood to include a £2.6bn investment as well as £415m in bonuses for staff - PA Wire/PA Images

Lloyds is planning to unveil a £1bn share buyback in its results tomorrow, in what could mark the first in a series of cash returns from Britain’s biggest bank. 

The move, which was first reported by Sky News, had been forecast by Credit Suisse late last month, in a research note in which it estimated Lloyds could return up to £15bn between this year and 2020 thanks to its healthy cash generation.

Lloyds itself had signalled to a potential cash return at its interim results in October, saying its capital generation increased to between 225 and 240 basis points, with its core capital ratio standing at 14.1pc, ahead of its benchmark of 13pc.

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The payout would come in stark contrast to HSBC, which in its annual results earlier today said any extension to its share buyback scheme will be delayed after warning that it will have to raise up to $7bn (£5bn) towards its capital buffer over the first half of 2018.

Along with its own set of results tomorrow, Lloyds will be laying out its three-year strategy.

The plan has been highly anticipated and comes almost ten months after the Government offloaded its remaining shareholding in Lloyds, returning it to full private ownership. 

The strategy is understood to include a £2.6bn investment as well as £415m in bonuses for staff.

Just over two weeks ago, Lloyds chief executive António Horta-Osório announced the bank was axing 930 roles across six of its divisions. This followed its decision to slash 49 branches in December as more customers were switching to online banking.