Lloyds bonus pot ¢G365 million; losses ¢G1.4b
(03-01 18:01)
Britain's state-rescued Lloyds bank posted a 2012 net loss of ¢G1.43 billion, rocked by huge compensation for insurance mis-selling, but awarded its boss and staff a large round of bonuses.
The bank added that staff would share a total bonus pot of ¢G365 million despite the losses. That was 3 percent lower than in 2011, but will give each employee about ¢G3,900 on average. Cash bonuses are capped at ¢G2,000.
The loss after taxation, compared with a shortfall of ¢G2.79 billion in 2011, Lloyds Banking Group said, AFP reports.
The lender, which is 39-percent owned by the taxpayer, added that pre-tax losses narrowed sharply to ¢G570 million, from ¢G3.5 billion last time around.
In the fourth quarter, it set aside another ¢G1.5 billion to cover compensation for mis-selling payment protection insurance, taking its annual provision to a vast ¢G3.575 billion.
The group's total bill now stands at ¢G6.775 billion, which makes Lloyds the worst affected bank by the mis-selling scandal. It also set aside ¢G400 million to compensate clients who were sold interest rate hedging products.
However, stripping out exceptional items, underlying profit surged to ¢G2.6 billion in 2012, from ¢G638 million in 2011, as the bank cut bad debts, costs and non-core assets. It shed 7,000 jobs last year.
Lloyds also revealed that chief executive Antonio Horta-Osorio would receive a 2012 performance bonus of ¢G1.485 million that will be deferred in shares until 2018, and will be dependent on its share price level.
Chairman Sir Winfried Bischoff defended the bonus move, arguing that Lloyds had showed ¡§restraint¡¦¡¦ in its bonus policy.
¡§Whilst Lloyds Banking Group continues to show restraint in its annual bonus awards, we believe our employees should be rewarded for their contribution to the further strengthening of the business in 2012,'' Bischoff said.
¡§The group continues to make sure that its remuneration structure places the focus on strong customer service and the long-term sustainability of the business.''
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