Since the financial crisis, Lloyds Banking Group has transformed from being a bank struggling with enormous payment protection insurance claims, high bad debts and funding pressures to being a giant cash machine.
As the UK’s biggest retail bank, Lloyds can use the benefit of its large market share and diversified approach from branches to internet to generate substantial profits. There are growing expectations for those profits next year to turn into share buybacks worth as much as £2 billion, on top of ordinary dividends, up from £1 billion this year.
It has not always been such a rosy picture. The government only sold its last tranche of shares in May last year, bringing to an end a £20 billion taxpayer bailout that at its peak