Lloyds Banking Group said it won't ask Britain's financial regulator to allow it to start paying dividends again until the second half of the year, disappointing investors who had hoped for a payout on 2013 earnings.
The state-backed bank pushed back its dividend prospects on Monday after taking a further £1.8bn charge for the mis-selling of loan insurance.
Most analysts and investors had expected the bank to announce a small dividend for 2013 alongside its full-year results later this month and Lloyds shares traded lower, down 2.1pc, at 0830 GMT.
"The dividend guidance is worse than expected," one of Lloyds biggest 50 institutional investors told Reuters.
The bank also said it had started preparing for a possible second sale of government-owned shares to the public, the next step in its privatisation after it was rescued by the state during the 2008 financial crisis.
The government raised £3.2bn in the sale of a 6pc stake in the bank in September. This marked a significant milestone in Britain's recovery from the crisis, when taxpayers pumped a combined £66bn into Lloyds and Royal Bank of Scotland.
Lloyds, which last paid a dividend in October 2008, said it will apply to regulators in the second half of 2014 to restart payouts.
The bank said it is aiming for a payout ratio in the medium term of at least 50pc of sustainable earnings.
Lloyds said it had set aside a further £1.8bn in the fourth quarter to compensate customers mis-sold payment protection insurance, and £130m relating to the sale of interest rate hedging products.
These new provisions largely reflect what the bank said were "revised expectations for complaint volumes," and bring the total put aside for compensation to £9.8bn.
Lloyds said underlying profit was £6.2bn in 2013 and it expects to announced a "small statutory profit before tax" when it publishes full-year earnings on Feb. 13.