LONDON (ShareCast) - (Sharecast News) - Lloyds Banking Group's bosses told shareholders that supporting customers during the coronavirus crisis would have a financial impact on the bank's results.
At the bank's annual meeting Chairman Norman Blackwell said Lloyds, Britain's biggest bank, had a responsibility to support customers and the wider economy during the crisis.

Blackwell said: "This support will of course have a cost, but we see this social contribution as a type of social dividend - recognising both our obligations as a responsible business and the benefit we gain from operating in communities that we can help return to prosperity."

Chief Executive Antonio Horta-Osorio said the bank had approved more than £3.6bn of "bounce-back" loans for smaller businesses and £1.1bn of so-called CBIILS loans under government programmes. Other measures include 1m payment holidays for personal customers with mortgages, credit card and other debts and more than 45,000 fee-free overdrafts, repayment holidays and deferred payments for commercial customers.

"As the chairman has said, this of course has come at a cost and we will clearly see a financial impact from the steps we have taken to support customers in our future results," Horta-Osorio said. "However, we believe it is the right thing to do."

Lloyds' first-quarter profit fell 95% to £74m as the bank set aside £1.4bn for bad debts in its existing loan book and potentially in new loans to support customers during the Covid-19 crisis. The UK is now in its worst recession since the second world war after coronavirus measures shut down most of the economy for two months.

Lloyds and Britain's other banks have come under intense pressure from the Bank of England to keep lending support households and businesses through the Covid-19 emergency. Lloyds, which has the biggest small shareholder base in the UK, scrapped its 2019 final dividend and suspended dividends and share buybacks for 2020 at the request of the BoE.

Blackwell told shareholders: "These were decisions we did not take lightly. The board fully understands the decision on the dividend will be disappointing to you, our shareholders, but we believe it was appropriate to agree to this in the current exceptional circumstances.

"However, while we have held back on the payment of dividends, I am well aware that any surplus capital in the business still belongs to you as shareholders. I would like to reassure shareholders that the board remains committed to returning surplus capital to shareholders in due course both through future dividends and potential share buybacks as appropriate and we will continue to keep this under review."

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE