- Lloyds Banking warned it expected lower returns this year after reporting that profit fell by more than a quarter in 2019 on lower net interest income and costs associated with provisions for payment protection insurance claims.

The bank said it expected to report a return on tangible equity -- a measure of profitability –within a range of 12% to 13% in 2020 compared to its previous targets of 14% to 15%.

For the year ended 31 December 2019, pre-tax profit fell 26% to £4.3bn as net income declined 4% to £17.1bn on the back of a 3% fall in net interest income.

The common equity tier 1 capital (CET1) ratio was 13.8% in 2019, with the bank saying it would target an ongoing CET1 capital ratio of about 12.5%, including a management buffer of 1%.

The bank recommended a final ordinary dividend of 2.25p per share, taking the total dividend to 3.37p a share, an increase of 5% on 2018.

'In 2020, the group will also commence paying dividends quarterly, accelerating payments to shareholders, with the first dividend being paid in June 2020,' the company said.

Lloyds said it would target net interest margin in the range of 2.75% to 2.80% with operating costs to be less than £7.7bn with a lower cost-to-income ratio than in 2019.

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