Prepare for UK bank sector dividend windfall

A bumper May for FTSE 100 dividends will be particularly lucrative for NatWest Group (LSE:NWG) and Lloyds Banking Group (LSE:LLOY) shareholders after the lenders made big increases to their payouts.

The UK-focused banks and Standard Chartered (LSE:STAN) will contribute £4 billion to a monthly dividend pot of £10.5 billion from 30 blue-chip companies, with Centrica (LSE:CNA), Aviva (LSE:AV.), British American Tobacco (LSE:BATS) and the 7.2% yielding Standard Life (LSE:SDLF) among other leading names in the calendar.

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One of the standout payments of the month takes place on 5 May when NatWest hands over a dividend of 23p a share for a total outlay of £1.8 billion.

The award is 48% higher than last April’s 15.5p a share and double 2024’s 11.5p after NatWest said in February 2025 that it planned to hike its payout ratio from 40% to 50% of profit.

The dividend total for 2025 rose by 51% to 32.5p, boosted by a strong year that saw NatWest grow its customer base by around one million and its headline profit by 24% to £7.7 billion.

Shares jumped 62% as part of a sector-wide re-rating in 2025 but have since fallen back after NatWest’s £2.7 billion wealth management acquisition and pause in share buybacks compounded worries over the UK economic outlook.

The 11% year-to-date fall means the shares trade with a current dividend yield of 5.7%, compared with 3.7% for its sector peer Lloyds Banking Group.

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Lloyds is due to hand over £1.4 billion, or 2.43p a share on 19 May, an increase of 15% on the previous year’s distribution and lifting the total for 2025 by the same level to 3.65p a share.

The total capital return when including share buybacks amounted to £3.9 billion, which at the time of its annual results in late January was the equivalent to 6% of Lloyds’ market value.

Clarity on motor redress costs means the shares have been more resilient, while the potential catalyst of a strategy update at half-year results on 30 July is an additional help.

With HSBC Holdings (LSE:HSBA) and Barclays (LSE:BARC) having paid their dividends in April and March respectively, the sector’s other big payment takes place on 14 May when Standard Chartered hands over £800 million.

The 49 US cents a share is equivalent to about 36.28p and represents a 75% jump on a year earlier after a strong 2025 that saw the Asia-focused lender exceed its three-year plan for return on tangible equity one year early.

The financial sector’s dominance of May’s dividend calendar also includes high-yielding Aviva, which is due to pay 26.2p a share on 14 May.

This is 10% above last year’s distribution after the insurer bolstered its usual mid-single digit increase with an additional 5% uplift relating to the acquisition of Direct Line.

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The £790 million award brings the amount returned to shareholders through buybacks and dividends to £10.4 billion since 2020. Guidance for mid-single digit growth in the cash cost of the dividend remains in place for this year.

Aviva trades with a current dividend yield of 6.3%, which compares with May’s best of 7.2% at Standard Life. The retirement and savings business has increased its award for payment on 20 May by 2.6% to 28.05p a share, an outlay of £281 million.

The former Phoenix Life business has doubled annual free cash flow to £1 billion since 2023, giving it financial flexibility in addition to comfortably covering its total dividend of £548 million.

Among other income stocks, the 5.7% yielding British American Tobacco is due to make the first of four quarterly payments of 61.26p a share on 7 May. The others will take place in August, November and in February 2027.

The company, which ranked third in Computershare’s list of biggest FTSE dividend payers in 2025, recently announced dividend growth of 2% to 245.04p for a ratio on 2025 adjusted diluted earnings per share of 69.6%.

Among other popular stocks in the calendar, British Gas owner Centrica is due to hand over 3.67p a share on 14 May. This compares with last June’s payment of 3p a share and lifts the total for 2025 by 22% to 5.5p.

Source: interactive investor, ShareScope. Data and dividend currency conversions correct as at 28 April 2026.