Dividends to rise for Barclays and Lloyds TSB

by Richard Kilner

Story link: Dividends to rise for Barclays and Lloyds TSB

This week Barclays and Lloyds TSB are predicted to increase their dividend payouts.

The move would be seen as a ray of sunshine in a distinctly overcast banking sector.

It would also been seen as a sign that both banks, amongst the largest in the UK, believe they suffered the worst of the fallout from the US subprime mortgage crisis.

Although Barclays is thought to have lost around £1.5bn, it is nevertheless expected to almost match its highest ever profits of £7bn, which will see its dividend rise by a tenth.

Lloyds TSB is also thought to have performed strongly despite the recent economic turbulence, with predicted profits of £4.4bn.

All of the nation’s top five banks (including HSBC, Royal Bank of Scotland and HBOS) are expected to post strong profits, in defiance of the sombre mood that has accompanied the credit crunch and US subprime mortgage crisis.

The five top British banks are expected to have a combined profit of around £38bn.

Next week RBS and HBOS will report their situations.