British banking group, Lloyds Bank plc, is reportedly reintroducing bonuses for staff, amounting to £399 million ($534 million) in total, after annual profits jumped up by more than fivefold in 2021.
For the uninitiated, a year earlier the bank has scrapped payouts for employees due to the pandemic. Lloyds stated that the decision is a testament to the bank’s stronger economic outlook as well as higher profits, and also confirmed that higher bonuses will be awarded to staff who deal with customers.
The group also disclosed that on its payroll, there were now 21 bankers earning over €1 million ($1.1 million) annually, up from 17 in the previous year. Meanwhile, one banker had earned between €4.5-5 million ($5-5.6 million) last year, which is more than the £2.5 million ($3.3 million) Lloyds paid to former CEO, António Horta-Osório.
Charlie Nunn, the new CEO who took over the reins after Horta-Osório stepped down last April, was paid £1.3 million ($1.7 million) with a £349,000 ($467,311) bonus.
The bank had frozen the unpaid bonuses of three of its former bosses citing charges associated to HBOS Reading scandal charges, for which the bank had to re-review the compensation for victims through a scheme called Foskett Panel after the original scheme was found unfair and unreasonable.
The bank ended up taking a total charge of £790 million ($1 billion) in relation to the controversy, wherein business customers were shoved into failure or distress after they were bombarded with unmanageable fees and debts, between years 2003 and 2007.
In total, the remediation charge, related to past misconduct dealings, came up to £1.3 billion ($1.7 billion) for last year.
Lloyds stated that while many uncertainties remained in relation to the total financial impact of the HBOS Reading scandal, it continued supporting the dual set of reviews, which are the Foskett Panel re-review and the independent review by Dame Linda Dobbs, and the way it handled the overall controversy.
However, despite these woes, the group reported an annual profit of £6.9 billion ($9.2 billion) for 2021, a steep rise from its 2020 profit of £1.2 billion ($1.6 billion).
The high amount can be credited partially to higher income, along with the reversal of loan loss charges through the year.
The news came as Nunn outlined a new strategy for Lloyds, which included focusing on areas of wealth management, increasing its market share in business banking, expanding its consumer products range, and increasing income from its corporate clients.
Source credit: https://www.theguardian.com/business/2022/feb/24/bonuses-return-at-lloyds-as-profits-surge-fivefold-to-69bn