Shares of Lloyds Banking Group (LYG) surged almost 4% in Monday morning trading after report circulated that it plans to return a substantial portion of earnings to its investors.
According to a report in the Financial Times, Lloyds will issue dividends of up to 70% of its annual profits within three years. The company’s CEO predicts that the bank will become a “high dividend” stock, paying out a proportion of its earnings well above domestic and international competitors, Reuters notes.
Before the bank can begin paying out any dividends, it will need to get the permission of British regulators.
Lloyds stopped issuing dividends in 2008 after the British government intervened to stop the bank’s collapse. The U.K. government still owns 39% of Lloyds shares, but is planning to sell the shares now that they have risen to a level that would make the sale profitable.