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Banks and oil lead the way as London-listed companies make big payouts: Investors enjoyed bumper dividends in 2022 as payouts rose by nearly a tenth
Investors enjoyed a peak year of dividends in 2022, with payouts up nearly a tenth.
Dividends among London-listed companies totaled £94.3bn for the year, 8% higher than in 2021 as Covid restrictions eased and companies cut payments.
Much of the increase was driven by a resurgence in payouts from major banks, boosted by rising interest rates. There was also a wave of payments from oil companies, which have made huge profits thanks to rising energy prices.
Surge: Dividends among London-listed companies totaled £94.3bn for the year, 8% higher than in 2021
In addition, companies bought back a record amount of their own shares – another way of returning money to investors. The value of share buybacks reached 2 per cent of the combined value of UK listed companies.
For technology company Link Group, the year ended softer, with payments in the last three months of 2022 only 5 percent higher than a year earlier.
And it warned that shareholders will face a fall in payments this year. Link Group expects total dividends to be £91.7bn – down 2.8% from 2022. Link Group director Ian Stokes said the economic backdrop is ‘definitely gloomier’ than at this time last year.
He added: “Operating margins in most industries are already under pressure. Rising interest rates are now depressing earnings by also increasing the cost of debt. This leaves less money for dividends and share buybacks.’