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I prefer banks like Lloyds to give out extra cash as dividends to shareholders. The bank has declared that it has a progressive dividend policy, implying that it intends to increase its distribution in the future. That, however, is never certain.
Who else benefits from share buybacks?
Well, senior managers and executives on long-term incentive plans (LTIPs) who are set to receive shares – sometimes for free, sometimes at the cost of exercising options – also benefit without really lifting a finger if the share price increases as a result of the share buyback.