LLOY Lloyds Banking Group Plc

By Adam Clark

Lloyds Banking Group PLC's (LLOY.LN) 2018 profit missed analyst expectations but the U.K. lender set out plans for a major share buyback and brought forward its cost-cutting targets.

The U.K.'s largest domestic bank said Wednesday that it made a pretax profit of 5.96 billion pounds ($7.73 billion), up from GBP5.28 billion in 2017. Analysts had forecast Lloyds to make a pretax profit of GBP6.4 billion.

Lloyds' net income of GBP17.77 billion matched analyst expectations, rising 2% from the prior year. The bank's net interest margin, the difference between the money it earns on lending and pays out on deposits, rose to 2.93%.

Lloyds proposed a share buyback of up to GBP1.75 billion. The lender also proposed a final dividend of 2.14 pence a share, bringing its total dividend for 2018 to 3.21 pence a share.

Lloyds' common equity Tier 1 capital ratio--a measure of a bank's financial strength--stood at 13.9% at the end of the year, after pro forma adjustments for dividends and share buybacks.

For 2019, Lloyds said it continues to expect an increased return on tangible equity of between 14% and 15%, and a net interest margin of 2.90%. The bank also said its operating costs are now expected to be less than GBP8 billion in 2019, a year ahead of its original target.

Write to Adam Clark at adam.clark@dowjones.com; @AdamDowJones

(END) Dow Jones Newswires

February 20, 2019 02:38 ET (07:38 GMT)

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