Dividends

Note:

Interim 2020 - In order to help the Group serve the needs of businesses and households through the extraordinary challenges presented by the COVID-19 pandemic, the Board decided that until the end of 2020 we would undertake no quarterly or interim dividend payments, accrual of dividends, or share buybacks on ordinary shares.

Final 2019 - In response to a request from our regulator, the Prudential Regulation Authority, and to preserve additional capital for use in serving our customers, the Board agreed to cancel payment of the final 2019 dividend in relation to ordinary shares.

Interim 2009, Final 2009, Interim 2010, Final 2010, Interim 2011 - The Group was prevented from paying dividends on its ordinary shares as a result of the European Commission state aid review.

Final 2008 - The Group was prevented from paying dividends on its ordinary shares whilst the HM Treasury preference shares issued as part of the HM Treasury recapitalisation scheme were in existence.

Lloyds Banking Group plc (the ‘Company’) makes available a dividend reinvestment plan (‘DRIP’) to shareholders who wish to use their cash dividend to purchase shares in the Company.

What is the DRIP?

The DRIP is a low cost way to use your dividend payments to purchase additional shares in the Company, enabling you to increase your shareholding in a convenient and cost-effective manner.

The DRIP is operated by Equiniti Financial Services Limited (‘EFSL’). Rather than receiving a dividend cheque or having a bank account credited with a cash dividend payment, EFSL will use the dividends payable to DRIP participants to purchase shares on their behalf in the market, under a special low-cost dealing arrangement.

The fees and charges are located in the DRIP Terms & Conditions.

Joining the DRIP

Any shareholder wishing to join the DRIP should contact EFSL for an application form, using the contact details provided below.

Leaving the DRIP

Any shareholder who is a participant in the DRIP and who wishes to withdraw from the plan should contact EFSL for a revocation form, using the contact details provided below.

DRIP Invitation Booklet

The DRIP Invitation Booklet explains how the DRIP works and what it means for shareholders, including some frequently asked questions.

DRIP Terms & Conditions

The DRIP Terms & Conditions can be accessed here. They are also available in hardcopy through EFSL using the contact details provided below.

Online: www.shareview.co.uk/info/drip

Tel: +44 871 384 2990

Textphone: +44 871 384 2255

Calls to 0871 numbers are charged at 8p per minute from a BT landline, calls from mobiles and other networks may vary.

Each of these documents should be considered by shareholders before making any decision regarding the DRIP. Participation in the DRIP is optional and these documents do not constitute advice to join, continue to participate in, or withdraw from the DRIP. If you have any doubt about the action you should take, it is recommended that you consult your stockbroker, solicitor, accountant or other independent professional adviser authorised under the Financial Services and Markets Act 2000.

How does your final ordinary dividend of 1.60 pence per share relate to your progressive dividend policy?

• With our 2022 results the Board announced a final ordinary dividend of 1.60 pence per share, resulting in a total ordinary dividend for 2022 of 2.40 pence per share, which reflects an increase of around 20% on prior year and is in line with our progressive and sustainable ordinary dividend policy.
• This represents a yield of over 4% and was in line with the market’s consensus expectations, which are available on our website.
• The Board will maintain its progressive and sustainable ordinary dividend policy going forward.

When will your shares be quoted ex-dividend, and when will the final ordinary dividend be paid?

• Our UK shares will be quoted ex-dividend on 13 April 2023, with final ordinary dividend paid on 23 May 2023.
• Important dates for our UK dividend can be found in our financial calendar.

Given your excess capital position, why a wasn’t a special dividend paid?

• With our 2022 results the Board announced a final ordinary dividend of 1.60 pence per share, resulting in a total ordinary dividend for 2022 of 2.40 pence per share, which reflects an increase of around 20% on prior year and is in line with our progressive and sustainable ordinary dividend policy.
• Given the Group’s strong capital position, the Board also announced its intention to implement an ordinary share buyback programme of up to £2.0 billion.
• Given the total ordinary dividend of 2.40 pence per share and the intended ordinary share buyback, the total capital return in respect of 2022 is equivalent to £3.6 billion, over 10% of the Group’s market capitalisation value at close of business 17 February 2023.
• The Board remains committed to future capital distributions and the Group has stated that it expects to pay down to its capital target by 2024.
• As usual, the Board will continue to give due consideration at each year end to the return of any surplus capital.

Why are you buying back shares?

• The effect of a buyback is to reduce the total number of shares in issue. It is expected that shareholders who retain their shares in the company will benefit from the share buyback programme as they will own an increased proportion of the total shares in the company and should therefore see an increase in the dividend per share going forward given the reduced number of shares in issue.
• The 2022 share buyback programme was successfully completed on 11 October 2022, in accordance with its terms. In aggregate between 25 February 2022 and 11 October 2022, the Group repurchased 4,529 million ordinary shares for an aggregate consideration of £2.0 billion. As a result, our issued share capital fell from 71,023 million to 67,288 million shares in 2022.
• Given the Group’s strong capital position, the Board announced with our 2022 results its intention to implement a further ordinary share buyback programme of up to £2.0 billion.
• In the event of future share buybacks, you would generally expect our share count to reduce. Share buybacks can be an effective use of excess capital.