RE: CEOs pay7 Dec 2018 21:59
Lloyds Banking Group plc (LYG) Q3 2018 Results - Earnings Call Transcript
Q3: 10-22-18 Earnings Summary
Joseph Dickerson
Hi, good morning George, thanks for taking the question. Just a quick question on the capital return ambitions. On my arithmetic if you have accrued a one-third, two-third interim versus full year dividend, and you generate the type of capital you expect and certainly we expect you to generate in Q4, what was generated in Q3. If I pay you down to a 14% common equity Tier 1 ratio, I get around a £2 billion excess. Could you just discuss the appetite to distribute that number down to that level if you agree with the maths and if there are any hindrances to that? I know that there seemed to be a newspaper article over the weekend about a £2 billion buyback which seems to have taken tie with that arithmetic, but I just wanted to see what your ambitions were around excess capital return? Many thanks.
George Culmer,
Hi Joseph. Yeah there is nothing wrong with the math in simple speak, yeah 200 basis points is £4.5 billion in pounds terms and if you were to put into p, it is about 6p type stuff. So that is the basic maths and you see I am currently paying out for the ordinary was just a bit over 3p. So that is the maths. What I would also say, the affirmation of two things. One in terms of confidence around capital generation. You have seen that in the 162, you have seen that in 41. And we are confident of delivering the 200 basis points for the full year. We are also confident in terms of our capital position and our capital requirement. So we have got the 13 plus 1, in terms of management buffer. So those pieces together say that I will come to the end of the year and that 200 basis points will be over and above that which I need to meet my capital requirement. So therefore are eligible for distribution. What I will say and I would stress, the Board will make its determination early next year, it will make that in that, we have updated our plan; we have seen various stress tests et cetera, come through and the Board will decide at that point. But as you know, the current board position is that we will look to distribute any surplus that we have and at the moment we have a requirement of 14, and as you have said, we have a capital position that will take us significantly in excess of that. So there has been reaffirmed confidence in capital contribution, continued confidence in requirement and absolutely no change in terms of how the Board will look at our capital position and surplus usage when we come to that time in early January-February of next year.
https://seekingalpha.com/article/4215643-lloyds-banking-group-plc-lyg-q3-2018-results-earnings-call-transcript?page=7
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