Lloyds Banking Group posted a 36 per cent decline in full-year profit after taking a £4 billion charge for wrongly sold payment protection insurance, more than half of which came in the fourth quarter.

Net income fell to £956 million from £1.5 billion a year earlier, the London-based bank said in a statement on Thursday.

Pretax profit for 2015, excluding PPI charges and other restructuring costs, rose to £8.11 billion.

That matched the £8.11 billion average estimate of 14 analysts surveyed by Bloomberg.

Chief executive officer Antonio Horta-Osorio is eliminating jobs, closing branches and investing in technology to reduce costs as record-low interest rates threaten the bank’s profit margins and revenue.

He increased the dividend to 2.25 pence a share from 0.75 pence and introduced a 0.5 pence special payment as a way to lure investors.

“We made a strong start in 2015 to the next phase of our strategy and have delivered a robust financial performance, enabling increased dividend payments,” Mr Horta-Osorio said in the statement.

Half a decade of charges to compensate customers for wrongly sold PPI now total about £16 billion, the most among the UK banks.

Lloyds has slumped 15 per cent this year in London trading, falling below the 73.6 pence average price the UK paid in its £20.5 billion bailout of the bank at the height of the financial crisis.

The government postponed the sale of its 9.2 per cent stake in Lloyds last month amid turbulent market conditions, pledging to offer stock to consumers when the situation improves.