Lloyds bankers to share £446m bonus pot – largest in four years

Lloyds Banking Group staff will share their largest bonus pot in four years, despite the lender reporting flat profits as it put aside more money to protect against a potential jump in defaults amid ongoing economic uncertainty.

Lloyds, which owns Halifax and is the UK’s largest mortgage lender, said its top performing bankers would share a bonus pool worth £446m for their work in 2022 – up 11% from £399m last year and the largest sum to be distributed among employees since 2018.

The lender also revealed a £3.8m pay packet for its chief executive, Charlie Nunn. However, that is down 31% from the £5.5m he received in 2021, when he was handed a £4.2m buyout to compensate him for shares he gave up when he left HSBC to become Lloyds chief executive in August that same year.

The banking group reported flat profits of £6.9bn, in line with average estimates from analysts, despite recording a near-50% jump in net interest income to £14bn, which accounts for the difference between what the bank pays out to savers and charges its loan and mortgage customers.

A series of interest rate hikes by the Bank of England, compounded by Liz Truss’s disastrous mini-budget in September, have led UK lenders to drastically increase borrowing costs on mortgages and loans. However, Nunn and other high street bank bosses have denied shortchanging savers by failing to increase interest rates on savings accounts at the same pace.

That increase was offset, in part, by a significant drop in other income, which includes its equity investments business. However, Lloyds was also forced to put aside £1.5bn to protect itself against a potential surge in defaults by its borrowers, who could struggle to repay their loans and mortgages in an economic downturn.

That contrasts with a release of £1.4bn a year earlier, when the lifting of Covid restrictions had increased optimism over the UK’s economic prospects.

“Although the macroeconomic outlook remains uncertain, our people, business model and financial strength ensure that we can continue to support our customers,” Lloyds said.