The Lloyds banking group is expected to announce a bonus pot of Â£365 million today, despite making a loss of over Â£570 million last year.
The bonus figures include an award of over Â£1.5 million to the Chief Executive, Antonio Horta-Osorio – in spite of the bank being forced to raise their compensation provision for PPI mis-selling to Â£6.5 billion, more than half the total sum for the big four banks. The bonus pool is also significantly larger than the Â£4.3 million Lloyds was fined for late payment of PPI compensation.
The Lloyds Banking Group’s total outlay on compensation for mis-sold PPI now stands at Â£5.3 billion, the largest of any of Britain’s banks.
Laura Willoughby MBE, Chief Executive of the campaign group Move Your Money, said:
“Taxpayer-backed Lloyds is responsible for more mis-selling than any other British bank. Yet Horta-Osorio still sees it fit to line his pockets with our money. It's time for Lloyds, Halifax and Bank of Scotland cutomers to hit the bank where it hurts – by moving their money to a more ethical alternative.”
Eric Daniels, the ex-Chief Executive of Lloyds Banking Group, said that PPI sales were “good value” for customers, despite the unprecedented fines levied on the bank. This was because the profitability of PPI “was lower than most of our products”, he said.
Stephanie Robinson, 24, from London, has left the bank because of its executive pay and PPI track record.
“I didn’t want my money being used to pay for bankers' bonuses whilst they rip off ordinary customers.”
The bank defended Horta-Osorio’s pay package, claiming that he will only be paid once shares reach the price the government paid for them. Many analysts are concerned that this will simply lead to more short-termism and risk-taking at the bank, rather than any meaningful structural change.
The bank was also shaken this year by a number of fines and compensation claims, relating to the mishandling of customer complaints, the holding of inaccurate customer records, and late payments of PPI compensation.
In what promises to be another difficult year for Lloyds, the bank is bracing itself for a huge fine for its role in the Libor rigging scandal. Analysts say the penalty could be up to Â£1.5 billion, equivalent to Lloyds' losses for the whole of last year.