£2bn Share Buyback Planned By Lloyds

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The Financial Times reported that Lloyds Banking Group is currently working on a plan to double the scale of the share buyback scheme of the company in 2019 to £2 billion.

Citing some sources who are familiar with the plan, the paper said that the lender that is based in the United Kingdom is hoping to return £4.5 billion worth of capital to its shareholders through the buyback and by paying a higher dividend.

The potential move would be a sign that Lloyds is feeling confident in its business operations for the coming year despite the economic uncertainty that is encompassing global trade and Brexit. It comes after the bank completed a £1 billion buyback earlier this year amid an improved outlook.

A source informed the FT that the plans were still at an early stage, and that no finalised decision would take place until a meeting of the board of the bank that is scheduled in February.

A spokesperson for Lloyds said that it would not comment on the speculation.

Lloyds had to be bailed out by taxpayers during the financial crisis ten years ago. It is the third-largest bank in term of assets in the United Kingdom. It has exhibited strong results so far this year, including the announcement of a 38 percent growth in year-on-year profits, which stood at £2.3 billion, for the first six months to June.

The bank has also announced its plans to restructure parts of its operations: closing some of its high-street branches while expanding its digital divisions.

Lloyds is set to announce its third-quarter results this coming Thursday, with an uneventful outcome expected. Analysts from UBS have said that the stocks in Lloyds are “in our view, an undervalued, strongly capital generative bank, operating with a cost advantage in a competitive market and with decent medium-term growth opportunities in lending, savings, investments and general insurance.”