Boost for equity income funds as Lloyds to pay first dividend since bail-out

Lloyds Banking Group is to start paying dividends again for the first time in six years, set to be 0.75p per share for 2014.

In a move long awaited by many investors including equity income managers, the board is recommending dividend payouts of £535m for last year. It said the decision would benefit three million shareholders directly and many others through their pension funds. The largest share, £130m, will go to the government. Lloyds is in this position as it has demonstrated to regulators its profitability and capital position have improved significantly. The group's underlying profit increased by 26% to £7.8bn in 2014, up from £6.2bn in 2013. This was ahead of market expectations for a profit of £7.5...