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Feb. 24, 2021, 2:37 a.m. EST

Lloyds's profit nearly halves, resumes dividend

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By Sabela Ojea

Lloyds Banking Group PLC reported Wednesday a nearly halved pretax profit for the fourth quarter of 2020 and resumed paying dividends by declaring the maximum allowed under the Prudential Regulation Authority's temporary framework on 2020 distributions.

The FTSE-100 listed lender posted a pretax profit of 792 million pounds ($1.12 billion) compared with GBP1.45 billion for the same period a year earlier. It was expected to post a pretax profit of GBP471 million, taken from a compilation of 23 analyst models. Pretax profit was hit by lower income and an increased impairment charge.

The U.K. bank's net income fell to GBP3.59 billion from GBP4.13 billion for the year-earlier period. Net income was anticipated to reach GBP3.43 billion, according to analyst models.

The bank booked impairments of GBP128 million for the period, when it was anticipated to book impairment charges of GBP586 million. This compares with an impairment charge of GBP341 million for the fourth quarter of 2019.

The board has declared a dividend of 0.57 pence a share, down from 3.37 pence a share for 2019. The board was expected to declare a dividend of 0.53 pence a share.

Lloyds' common equity Tier 1 capital ratio--a measure of a bank's financial strength--stood at 16.2% from 13.8% at Dec. 31, 2019. The bank was expected to reach a ratio of 15.4%, according to a compilation of 23 analyst models.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

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