Kames Capital has questioned whether Lloyds Banking Group should to restart dividend payments when it still owes bondholders money.
Fixed income manager Alexander Pelteshki says Lloyds accepts the fairness of rewarding long term supporters of the bank now times have improved, but those supporters include 2029 bondholders whose payments were skipped in 2011and 2012 under an EU ban on paying dividends and coupons.
Mr Pelteshki said legally speaking the coupon on the bonds could be deferred until 2029, but went on: "Given that Lloyds has made obvious steps towards recovery and is applying for permission to pay dividends, economic need is now hard to justify."
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