News - PPI Enforces Bonus Clampdown At Lloyds
Lloyds Banking Group has been forced to set aside £3.57bn as compensation for mis sold PPI, with top bosses expected to see some of their £375m in bonuses clawed back.
The bank’s senior independent director, Anthony Watson, told the Treasury Select Committee that they will have to “consider” such as move due to such a significant loss for the year, and said: “I can assure you it will be part of our deliberations.”
Only in February, Lloyds, which is 41% owned by the UK tax payer, announced that £1.5m in bonuses was being reclaimed in order to release funds expecting to be reserved for PPI claims. Without the huge PPI bill, the bank would have made a £663m profit.
Lloyds was the first bank to make the commitment to fund PPI compensation by clawing back bonuses from executives, including its former boss Eric Daniels. Lloyds Banking Group was also recently revealed to be one of the most complained about banks, with over 240,000 grievances against it, many of which relate to mis sold PPI.
“This is clearly a good move as it demonstrates the banks intent to pay back millions to people they have mis sold PPI to over the past decade,” said a spokesperson for leading Claims Management Company missoldppiclaims.info. “The huge sum that they are expecting to have to pay out just goes to show how regularly the policies were illegally sold to their unsuspecting customers.
“Of course, the fact that multi-million pound bonuses are expected to be used to make up the compensation kitty will make the whole situation all the more sweeter for the many critics of recent banking practice.”
Indeed, a recent survey indicated that bonuses paid to blue-chip bosses actually rose last year by 12% to an average of £4.8m, compared to a modest 1% pay rise for the average employee.
Critics of such a move include Labour MP George Mudie who questioned why bankers were paid big bonuses for just doing their job, while nurses, for example, work just as hard for a basic salary. Mudie went on to suggest that employees should take their seat on remuneration committees, as it would “bring some reality from the outside world”.
“The combination of big bonuses for executives, the recent rate-fixing scandal and the whole PPI mis selling fiasco, means consumers have never been more determined to get their money back,” added missoldppiclaims.info. “That’s why claims management companies like ours are being inundated with requests from clients to help them process their applications so that they can be refunded every penny that they are entitled to.
“With it now being abundantly clear that banks and credit card companies are preparing themselves to pay out big sums – given the billions of pounds they have set aside – then there should be no reason why anyone who has taken out a loan, mortgage or credit card in the past 10 years shouldn’t make the effort to find out whether they were once mis sold PPI.”