Lloyds Banking Group PLC on Thursday launched the £2.0 billion share buyback it had announced alongside its annual earnings on Wednesday.
The share buyback programme begins on Thursday and will end no later than December 29.
On Thursday, the Edinburgh-based bank told investors it had entered an agreement with UBS AG to conduct the £2 billion share buyback on its behalf.
It said the sole purpose of the programme was to reduce the ordinary share capital of the company, and that it intends to cancel the shares purchased through the programme.
The buyback announcement had accompanied a cautious outlook for the year ahead on Wednesday, as Lloyds said it expects the benefits of rising interest rates on its net interest margin to begin fading.
Lloyds reported pretax profit of £6.93 billion for 2022, compared to £6.90 billion the previous year. Net interest income was £13.96 billion, up from £9.37 billion, while net income was £18.05 billion, up 14% from £15.76 billion. The bank’s net interest margin rose to 294 basis points from 254 points, in line with its previous guidance.
For 2023 and 2024, it predicted capital generation of around 175 basis points, compared to 245 basis points on a pro forma basis in 2022.
Company shares were trading 1.2% higher at 51.88 pence each in London on Thursday morning.
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