RE: Share buy-back13 Jun 2018 21:43
Dividend
The Board has recommended a final ordinary dividend of 2.05 pence per share. This is in addition to the interim ordinary dividend of 1.0 pence per share
that was announced at the 2017 half year results. The total ordinary dividend per share for 2017 of 3.05 pence per share has increased by 20 per cent from
2.55 pence per share in 2016.
The Board continues to give due consideration at each year end to the return of any surplus capital and for 2017, the Board intends to implement a share
buyback of up to £1 billion, equivalent to up to 1.4 pence per share. This represents the return of capital over and above the Board’s view of the current
level of capital required to grow the business, meet regulatory requirements and cover uncertainties. The share buyback programme will commence in
March 2018 and is expected to be completed during the next 12 months.
Given the total ordinary dividend of 3.05 pence per share and the intended share buyback, equivalent to up to 1.4 pence per ordinary share, the total
capital return for 2017 will be up to 4.45 pence per share, an increase of up to 46 per cent on the prior year, equivalent to up to £3.2 billion.
In prior years, the Board has distributed surplus capital by means of a special dividend. The Board’s current preference is to return surplus capital by way
of a buyback programme given the amount of surplus capital (£1 billion in 2017 versus £350 million in 2016), the normalisation of ordinary dividends, our
return to full private ownership and the flexibility that a buyback programme offers.
The Group intends to maintain a progressive and sustainable ordinary dividend policy. The rate of growth of the ordinary dividend will be decided by the
Board in light of circumstances at the time and, having grown very significantly in the last three years, going forward the ordinary dividend is likely to grow
at a more normalised rate, whilst being supplemented by buybacks or special dividends.
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