Lloyds Hikes Dividend 30%, Rolls Out £1B Buyback

Lloyds Banking Group PLC, a UK retail and commercial lender, raised its interim dividend 30% and announced a £1 billion share buyback on Wednesday. The moves came alongside a half-year results presentation in which Chief Executive Charles Nunn said the bank is on track to hit its 2026 financial targets and unveiled a new strategy running through 2030.

Nunn described the plan as “ambitious” and said it builds on “strong foundations” from the current five-year plan, which runs out this year. The dividend increase and buyback are the most concrete signals in the presentation so far. They suggest management sees enough capital headroom to return cash to shareholders while still funding the next phase of growth.

The interim dividend rose to 1.60 pence per share from 1.23 pence a year earlier. The £1 billion buyback adds to the roughly £1.5 billion the bank had already returned through buybacks in the first half. William Chalmers, the chief financial officer, is expected to provide more detail on capital ratios and the dividend policy when the full results are released.

Lloyds did not publish specific profit or revenue figures in the opening remarks. Nunn said the bank is “on track” to deliver its 2026 targets, without elaborating. The full half-year report will include net interest income, impairment charges and the common equity tier 1 ratio, which investors watch closely as a buffer for dividends and buybacks.

Nunn said the new 2030 strategy will focus on “sustained strength” in financial performance and will be detailed in the coming months. The bank did not outline specific growth priorities or revenue targets for the new plan on Wednesday.

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Analysts on the call pressed for more detail on the strategy. Guy Stebbings of BNP Paribas asked about the bank’s cost trajectory and revenue growth assumptions. Benjamin Toms of RBC Capital Markets queried the outlook for net interest margin in a falling rate environment. Nunn and Chalmers are expected to address these questions in the Q&A session.

The bank’s share price has risen roughly 12% this year, outperforming the FTSE 350 banks index. Much of that gain came after the bank’s first-quarter results in April, which showed net interest income holding up better than some peers.

Lloyds is the UK’s largest mortgage lender and a dominant player in current accounts and savings. The new strategy will need to address revenue diversification beyond mortgage lending, where margins are under pressure from competition and rate cuts. The bank has been building its wealth and insurance businesses, but those segments remain a small share of total income.

Nunn said the bank will provide further detail on the 2030 strategy in the coming months. The market will be watching for specific cost-income targets, revenue growth ambitions and capital return commitments when the full plan is released.