But on balance, things remain pretty bleak for the bank as the UK economy struggles and more misconduct costs loom large. You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more.

​The bank’s strategic focus on growing its wealth management and insurance businesses aims to diversify income streams beyond traditional banking. Success in these areas could potentially enhance dividend sustainability by reducing reliance on interest income in a volatile rate environment. ​When comparing Lloyds’ forecast dividends to its UK banking peers, the group currently offers one of the more attractive dividend yields in the sector.

Here’s how investors could target £5,174 a year in passive income from £5,000 in savings invested in this FTSE 100 gem…

Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. They may have other tax implications, and may not provide best mt4 indicators, best free indicator forex download the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin.

LLOY Dividend Yield Over Time

However, recent developments, including regulatory challenges and financial provisions, have prompted a reassessment of its dividend outlook for the coming years. The Motley Fool UK has recommended Aj Bell Plc, Barclays Plc, HSBC Holdings, Lloyds Banking Group Plc, and Standard Chartered Plc. The higher the net interest margin (NIM) — that is, the difference between what they charge borrowers and what they pay savers — the better. Today its forward dividend yield is 4.6%, and for 2025 it rises to 5.5%. And yet while these figures comfortably beat the Footsie average of 3.4%, I’m not tempted to touch the Black Horse Bank with a bargepole. As a retail bank, Lloyds enjoys a steady flow of income through account fees, loan interest and transaction charges that allows it to pay a consistent dividend.

How much does Lloyds Banking Group pay in dividends?

It can keep its progressive policy going even when revenues fall and credit impairments increase during economic downturns. Lloyds shares offer some of the most reliable dividend yields on the FTSE 100. I’m not just concerned about bank earnings if (as I expect) Britain’s economy remains under pressure.

The most recent change in the company’s dividend was an increase of GBX 1.05 on Thursday, February 20, 2025. Get a better understanding of how the markets work with our easy to ready “how-to” guides. Quickly compare vetted accounts to see which providers are most appropriate for you.

Should I buy Lloyds shares for the income?

• Any performance statistics that do not adjust for exchange rate changes are likely to result in inaccurate real returns for sterling-based UK investors.
• During such a situation, banks are the first to receive the blow with increased loan defaults and a decline in profits.
• It’s even possible that if another economic disaster struck, dividends could be once again cancelled outright.
• By contrast, both of those other blue-chip operators have significant exposure to fast-growing Asia.
• In the last year, the dividend yield of Lloyds Banking Group (LLOY) was 5.43%, with an average of 4.63% over the last 5 years and 4.15% over the last 10 years.

At the end of 2024, its CET1 capital ratio (a measure of solvency) rang in at 14.2%, well ahead of its targeted minimum of 13%. As you can see, the yields on Lloyds’ predicted dividends all sail above the FTSE 100 long-term average of 3%-4%. That’s because with the country’s finances in such a dreadful state, I fear the government will see the banking sector as an easy target for raising additional tax receipts. Also, with an estimated 18% share of the UK mortgage market, the bank is heavily exposed to the domestic economy. The average of their predictions is for a FY24 total dividend of 3.26p, offering yield of 5.5%.

As a consequence, it faces a struggle to increase profits as the UK economy faces a prolonged period of low growth. By contrast, both of those other blue-chip operators have significant exposure to fast-growing Asia. I’m also concerned about Lloyds’ long-term growth prospects versus other FTSE 100 banks. On the plus side, BoE rate reductions could stimulate loan demand and lessen bad loans.

This means they tend to pay a greater proportion of their excess capital out in dividends compared to many other UK shares. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The Motley Fool UK has recommended Barclays Plc, HSBC Holdings, Lloyds Banking Group Plc, and Standard Chartered Plc. Between 2009 and 2013, no dividend was paid before it was eventually restored in 2014. As the bank’s bottom line continuously fluctuated due to its dependence on its investment banking arm to turn a profit, dividends have moved similarly. Looking at the latest full-year results for 2023, Lloyds has paid a total ordinary dividend of 2.76p per share.

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• The average of their predictions is for a FY24 total dividend of 3.26p, offering yield of 5.5%.
• However, despite these concerns, the stock appears to offer good value.
• That’s why, personally, I think it may be best to keep this stock on my watchlist for now until a clearer picture forms of what lies in store for the British economy.
• This provides a decent margin of safety in case profits are indeed blown off course.
• The higher the net interest margin (NIM) — that is, the difference between what they charge borrowers and what they pay savers — the better.

Their exposure to Asian markets creates alternative growth and yield dynamics that domestic investors should consider when evaluating banking dividends. If I only focus on the dividend yield, the Lloyds share price looks like an attractive investment for my portfolio. After all, not many businesses can offer a sustainable 6% dividend yield. ​NatWest Group and Barclays, Lloyds’ main competitors, maintain different dividend profiles. NatWest has focused on capital returns through substantial share buybacks, while Barclays balances its dividend approach with its more diversified business model including investment banking.

Lloyds Dividend Forecast: 2023, 2024, 2025, 2026, 2027, 2028 Analyst Predictions

Based on a current share price of 59.5p, this implies a yield of 4.6%. Aviva shares are currently trading at the lowest rate since the pandemic, but is this a buying opportunity? Some investors would still consider looking at the Lloyds dividend forecast for 2023 to further support their decision. But in my opinion, when the economy is giving clear signs of a potential recession, it’s critical to take a step back. To avoid a meltdown in the car loans market, the Treasury has said it will express concerns over potential sector costs to the Supreme Court when it reviews the case. Compare Lloyds Banking Group’s annual dividend, yield, and 3-year growth rate with averages for Financial and LON companies to evaluate its performance against the market.

In other words, Lloyds has a high level of exposure to this investigation. Consequently, management has already put aside £450m to cover any potential penalties. Yet more bearish analysts believe the true cost could be significantly higher if the investigation finds wrongdoing. Views expressed on the companies and assets mentioned in this article are those of the writer and, therefore, may differ from the opinions of analysts in The Money Cog Premium services. Assuming management can continue to execute its long-term strategy successfully, patient income investors could be well-rewarded in the coming years.

​Ex-dividend dates are crucial to understand – you must own Lloyds shares before this date to qualify for the upcoming dividend payment. These dates are typically set a few weeks before the actual payment date and are clearly communicated in the bank’s financial calendar. ​The dividend calendar for Lloyds typically follows a semi-annual payment structure, with announcements usually accompanying the bank’s interim and full-year results. Marking these dates in your investment calendar helps you anticipate potential income flows.

​Lloyds has complemented its dividend strategy with substantial share buyback programmes, most recently announcing a £1.7 billion repurchase plan. These buybacks represent an alternative method of returning capital to shareholders by reducing the number of outstanding shares. ​Payment dates represent when dividends are actually distributed to eligible shareholders. Lloyds typically pays its interim dividend in September and its final dividend in May, though exact dates can vary and should be confirmed through official announcements. ​For instance, Lloyds has recently set aside an additional £700 million to address potential costs related to a probe into historical mis-selling of car finance. This provision impacted the bank’s fourth quarter (Q4) results, with pre-tax profits reported at £1.528 billion, down from £1.775 billion in the previous year.