Bonuses return at Lloyds as profits surge fivefold to £6.9bn
Bonuses are back for Lloyds bankers, after annual profits jumped more than fivefold last year.
The banking group said it was reintroducing bonuses for staff with a pool worth £399m, having scrapped payouts due to the impact of the pandemic a year earlier.
The decision reflected the stronger economic outlook and the bank’s higher profits, Lloyds said. It also confirmed that higher bonuses would be handed to staff who deal with customers.
The bank posted a £1.3bn charge linked to dealing with previous misdeeds, which covered £790m related to the HBOS Reading controversy, which saw business customers pushed into distress or failure after they were loaded with unmanageable debts and fees between 2003 and 2007.
Lloyds said “significant uncertainties remain” and that it continued to support a dual set of reviews, including into how customers were treated and compensated by the bank. “We continue to support the independent Foskett Panel re-review and Dame Linda Dobbs’ independent review process as we work to bring this matter to a conclusion,” Lloyds said.
But the group, which owns Halifax and is the UK’s largest mortgage lender, still reported annual profits of £6.9bn, significantly higher than the £1.2bn reported for 2020. While the increase was partially due to higher income, the biggest impact came from the reversal of loan loss charges throughout the year.
Lloyds also released a total of £1.2bn worth of loan loss charges throughout 2021. That is compared with the £4.2bn it had been forced to put aside in order to offset a potential jump in loan defaults during the pandemic.
Commenting on the results, chief executive Charlie Nunn said: “2021 has been a year of solid financial performance with successful strategic execution,
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