UK bank stocks pay £7bn dividend windfall in April
In a lucrative month for income investors, some very generous FTSE 100 companies will be sending out dividends to shareholders over the next month. Graeme Evans has the details.
27th March 2025 16:02
by Graeme Evans from interactive investor
HSBC, Barclays and NatWest are to pay well over half of April’s £10.7 billion in FTSE 100 dividends as the banking sector continues to demonstrate its income appeal.
The biggest sum by far is from market heavyweight HSBC Holdings (LSE:HSBA), which is handing over £4.9 billion, while NatWest Group (LSE:NWG) has increased its distribution to £1.2 billion. Barclays (LSE:BARC) is paying £788 million.
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The distributions continue the trend of 2024, when UK-listed lenders paid out £873 million more in regular dividends than in 2023.
Their increases have offset lower sums in other traditional income sectors such as mining and housebuilding, meaning banks made the latest contribution to a 2.3% headline rise to £92.1 billion in Computershare’s 2024 dividend monitor.
The HSBC award will see shareholders get a fourth interim dividend of 36 US cents a share, up from the 31 US cents declared for the same period a year ago. The dividend will be paid on 25 April, based on exchange rates on 14 April.
This year’s distribution is likely to be in the region of 27.83p a share, up from 24.82p paid last year. In total for 2024, shareholders have received a total of 87 US cents inclusive of a special dividend of 21 US cents a share.
Dividends paid in 2024, together with a more than 20% increase in the share price, delivered a total shareholder return for the year in excess of 30%.
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HSBC has repurchased 11% of its share count, which combined with sustained levels of profitability have led to greater earnings and dividends per share.
The shares yield dividend income of 5.7%, which compares with 4.6% for NatWest and 2.7% for Barclays.
NatWest’s 15.5p a share distribution is planned for 28 April, representing an increase of about £200 million on the previous year’s 11.5p a share and leaving the total for the year 26% higher at 21.5p. Buybacks increased the overall return to £4 billion in 2024.
For this year, the bank intends to increase the ordinary dividend payout ratio from 40% of attributable profit to 50%.
Barclays has an ambition to return at least £10 billion of capital to shareholders up to 2026, a figure that includes 2024’s £3 billion.
Meeting this target will be driven by the use of buybacks, with growth in the dividend achieved through share count reduction. About £1.2 million was paid to shareholders through dividends in 2024, including the 5.5p a share due to land in accounts on 4 April.
Barclays’ current yield of 2.7% is the lowest of the nine FTSE 100 stocks due to make dividend payments in April.
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The largest at 6.3% is Rio Tinto Ordinary Shares (LSE:RIO), which is also one of the top five dividend payers in the FTSE 100.
Since introducing its returns policy in 2016, the group has consistently delivered cash returns to shareholders at the upper end of the 40% to 60% guidance range. This includes a total of $6.5 billion in relation to 2024, the ninth consecutive year at 60% of earnings.
Shareholders will receive a final dividend of 225 US cents a share on 17 April, leaving the total for the year 8% lower at 402 US cents.
Other big payers in April include drinks giant Diageo (LSE:DGE), which is due to distribute £697 million through an unchanged interim dividend of 40.5 US cents. The amount in sterling is likely to be about 31.31p, subject to the exchange rate on 9 April.
The unchanged GSK (LSE:GSK) fourth-quarter dividend of 16p a share is due for payment on 10 April and is worth £651 million. The award lifted the total for the 2024 financial year to 61p a share or £2.5 billion, up from 2023’s 58p a share worth £2.35 billion.
GSK has already said it expects to pay 64p a share for 2025, which is guided by a 40-60% payout ratio through the investment cycle.
Company | Payment date | Current dividend yield (%) |
04-Apr | 2.7 | |
10-Apr | 4.1 | |
11-Apr | 7.3 | |
15-Apr | 4.3 | |
17-Apr | 6.3 | |
24-Apr | 3.9 | |
25-Apr | 5.7 | |
25-Apr | 2.9 | |
28-Apr | 4.6 |
Source: interactive investor, ShareScope. Data and dividend conversions to sterling from dollars at exchange rate on 27 March 2025.
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