Lloyds Banking Group announced that it will return up to £4 bn to shareholders as it reported a 13% increase in profits.
The banking giant posted pre-tax profits of £5.96bn for 2018 compared with £5.28bn the previous year.
On an underlying basis, profits rose 6% to £8.07bn.
Lloyds hiked the dividend by 5% to 3.21p per share and proposed a share buyback of up to £1.75bn, which represents a total return of up to £4bn to investors.
Operating costs were relatively steady in 2018 at £8.17bn and the company now expects costs to be less than £8bin this year, which is 12 months ahead of its initial target.
Lloyds expects to increase return on tangible equity by 14%-15% this year with strong profits and lower charges as well as a net interest margin of about 2.9%.
Although the near-term outlook for the UK economy remains uncertain, our strategy continues to deliver for our customers
“I remain confident that, with our unique business model and market-leading efficiency, we can continue to increase investment in customer propositions and grow our leading digital bank, whilst at the same time delivering strong financial performance and market-leading returns.”
He added that in 2018 the group “made significant progress” in its three-year strategic plan.
“2018 has been a year of strong strategic and financial delivery, as we build on our unique capabilities to transform the group to succeed in a digital world.
“We have made significant progress against the priorities we set out at the start of the year when we launched the third stage of our strategic plan, which is supported by investment of more than £3bn over the plan period,” he said.
Pay details have been released alongside Lloyds’ results and showed that Mr Horta-Osorio saw his base salary rise 1.6% in 2018 to £1.24m.
His total remuneration, however, fell 2.5% to £6.2m from £6.43m.
Lloyds’ gender pay gap narrowed by 1.3% last year to 31.5%, which the bank claims is better than the average for financial services firms.
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