The Great Covid bounceback: Lloyds boss applauds Britain’s economic recovery

The Lloyds Banking Group boss praised Britain’s economic recovery after a huge gain in profits flooded investors with dividends.

William Chalmers, the financial head of the lender who will act as chief executive before Charlie Nunn starts next month, said the outlook was “more promising” as the country recovers from the pandemic.

And to give shareholders a boost, Lloyds reduced its dividend, which was canceled last year when the Bank of England imposed a strict ban on payouts in light of the pandemic.

Flush: Lloyds reduced its dividend, which was canceled last year when the Bank of England imposed a strict ban on payouts

Lloyds will pay out £475 million as a six-month reward, and Chalmers said it should now be able to resume regular payouts twice a year.

The bank was just one of many companies at home and abroad to report huge profits as the global economy recovers from the coronavirus crisis. Yesterday alone, UK-listed companies announced more than £7 billion in dividends and share buybacks. promising prospects for the future.’

The lender expects the economy to grow 5.5 percent this year and the same in 2022, up about 0.5 percent from previous projections, and the unemployment forecast has been revised down from a peak of 7.5 percent. this year to 6 percent.

Chalmers added: “We are mistaken on the more conservative, the more cautious side, of what other market commentators might say about the outlook. But we are building in some room for uncertainties about the rollout of vaccines, about the mutation of the coronavirus, about policy adjustment, and so on.’

The sunnier forecasts allowed Lloyds to release £656million of the £4.2bn it had set aside last year to cover loans that could turn sour. As a result, the bank’s profit rose to £3.9 billion in the first half of the year, from a loss of £602 million in the same period in 2020.

Delight: Lloyds boss William Chalmers

Delight: Lloyds boss William Chalmers

The mortgage business thrived, although Lloyds also set aside a further £150m to compensate victims of the historic HBOS Reading fraud.

The bank has also acquired Embark Group, an investment and pensions firm, for £390 million as it seeks to build up its wealth management business.

Chalmers said, “We see a huge opportunity in this area.”

Lloyds has seen customer deposits rise by almost £24bn in the first half of this year alone, and would rather have this money leave the bank when invested, Lloyds wants to keep it under its wing.

The lender already had a partnership with the blue-blooded asset manager Schroders, for clients who wanted advice about their investments. Now Embark provides the bank with a platform where clients want to make their own investment decisions.

New figures from the Bank of England showed yesterday that households stashed a further £9.8 billion in June and have now saved nearly £223 billion since the start of the pandemic.

Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said it suggested “households remain cautious due to the pandemic and continue to save excessively.”

Dickens added: ‘Household spending will increase if they spend even a portion of this savings, but we don’t expect a major drop anytime soon.’

  • TSB posted a profit of £42.9 million in the first half of the year, compared to a loss of £65.5 million last year. The high street bank has a six-month record for mortgages, receiving £5.8bn in applications.

Record payout at Anglo American

Anglo American will pay out record amounts to shareholders after profits rise on a commodities rally. t

The value of many of the Anglo metal mines saw prices soar in the first six months of the year as demand for commodities exploded. This included iron ore – a key ingredient in steel production that is being picked up by China as it ramps up its economy – platinum metals and diamonds.

Anglo will return an additional £1.4bn to shareholders in the first half – £700m in a special one-off dividend and £700m through share buybacks. Investors will receive £2.9 billion including the regular dividend.

The miner reported the best half-year profit in its 104 year history, from £7.3bn in 2020 to £15.6bn.

£6.4bn for Shell investors

Savers and retirees got a big boost when Shell increased its dividend by nearly 40 percent and launched a £1.4 billion share buyback programme.

The FTSE100 energy supermajor will hand investors a total of £6.4 billion for the second quarter.

Shell was able to increase the amount it will give to shareholders after oil prices bounced back to above $75 a barrel as the global economy began to recover. It made a profit of £3.9 billion – slightly higher than the city’s projections. Shares rose 3.9 percent, or 54p, to 1438p on the news.

In April 2020, the company cut its dividend by two-thirds to 12.6 pence per share after the Covid crisis led to a drop in oil demand and prices.

It was the first reduction in Shell’s payout since World War II. Bosses said the decision was ‘cautious’, but it was labeled a ‘devastating’ blow to the British whose pension funds, stock market-linked savings accounts and mutual funds all invest in Shell and benefit from its division.

Rival BP also made drastic cuts last year, but has since increased them. It will reveal in its second quarter results next week whether it is now in a similar position to Shell.

Shell CEO Ben van Beurden said yesterday that he is increasingly confident that oil prices will remain strong for the foreseeable future.

BAE’s futuristic jet released for takeoff

BAE Systems has raised £250m in taxpayers’ money to develop the futuristic British fighter jet Tempest.

The defense group announced the deal with the Ministry of Defense as it increased its half-year dividend from 9.4 pence to 9.9 pence.

Flying high: BAE Systems has raised £250m in taxpayers' money to develop the UK's futuristic Tempest fighter jet (pictured)

Flying high: BAE Systems has raised £250m in taxpayers’ money to develop the UK’s futuristic Tempest fighter jet (pictured)

To give investors another boost, BAE also said it would launch a £500m share buyback program after profits jumped two-thirds to £1.2bn.

The Tempest project aims to design a successor to the Typhoon jets currently in use.

In early plans for the plane, BAE said the plane could fly unmanned and have radar that can capture “a city’s data” in a second.

Diageo cheers to cocktail culture

Diageo posted record sales thanks to recovering consumer demand and the return of cocktail culture during the Covid19 pandemic.

The FTSE100 drinks maker, which makes Gordon’s gin and Smirnoff vodka, revealed net sales rose 16 percent in the year to June to £12.7 billion.

The jump helped boost profits by 81.3 percent to £3.7 billion. It increased the final dividend by 5 percent to 44.59 pence per share, equivalent to £1 billion.

In Britain, sales rose 7 percent, boosted by a 16 percent increase in spirits as shoppers bought more whisky, Baileys, vodka and gin. However, beer sales fell 16 percent due to the ‘significant impact’ of forced on-trade closures in the UK.

SALES ASTRAZENECA STIMULATED BY COVID-19 JAB

Astrazeneca has posted a massive increase in sales, boosted by its Covid19 vaccine.

The British pharmaceutical group said yesterday that revenues are up 18 percent to £11.1 billion in the first half of 2021.

That included £838 million of the Covid-19 vaccine the company was co-developing with the University of Oxford, of which £640 million came in the second quarter.

By comparison, US rival Pfizer expects to make £24 billion in sales – meaning it can share £7 billion in profits with partner BioNTech.

Unlike rivals, Astra’s deal with Oxford stipulates that it must sell the jabs at cost during the pandemic. Controversies surrounding Astra’s Covid jab have prompted Astra to weigh up options for the future of its vaccine business.

Yesterday, Ruud Dobber, head of Astra’s biopharmaceutical division, said the company was exploring “various options” for the company.

The company’s strong growth in the first half included a 19 percent jump in sales of cancer drugs such as Tagrisso, Imfinzi and Lynparza, as well as a 26 percent jump in emerging markets, primarily driven by China.

The company announced a dividend of 64.8 pence per share.

Astrazeneca shares rose 0.1 percent, or 11p, to 8277p.

Matt Oliver

Some links in this article may be affiliate links. If you click on it, we can earn a small commission. That helps us fund This Is Money and use it for free. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

.