Lloyds Bank Group cancels staff bonuses after profits slump. Profits were already down 85% to £434m in first nine months of the year
Lloyds Banking Group has scrapped bonuses for this year due to the impact of the pandemic on its balance sheet. Britain's biggest high street lender has put aside billions to cover the cost of loans and mortgages that might not be paid back, slashed jobs and had its profits squeezed by record-low interest rates. In a memo sent to staff this week, Lloyds said that despite the vaccine rollout business performance remains tough and bonuses must be ruled out, although most staff will get above-inflation pay rises. The move was first reported by the Financial Times. The bank warned last year that bonuses would be cut if underlying profit fell more than 20pc below target. Lloyds had a £310m bonus pot to distribute last year. After the Bank of England's warning about cash bonuses last week it was expected that retail banks would hold back on any big rewards to staff. Sources at Lloyds' rival NatWest said they expect bonuses to be down this year but that decisions have not yet been made. The bank formerly known as Royal Bank of Scotland usually tells staff their bonus figure in February, with only about half eligible for a payout.
Llyods' (LYG) latest plan to resume branch closures is part of the bank's restructuring efforts to reduce costs and improve operating efficiency amid the pandemic-related uncertainties.