Lloyds hands out bonuses after returning to profit

Lloyds Banking Group paid £395 million in bonuses last year, up 8 per cent on the year before as it returned to profit for the first time since it was rescued by British taxpayers six years ago.

Lloyds, which is 33 per cent owned by the government, awarded a £1.7 million bonus to chief executive Antonio Horta-Osorio, which it said would be in shares and deferred for five years.

The bank reported a statutory profit of £415 million for 2013, up from a loss of £606 million in 2012. Its underlying profit more than doubled to £6.2 billion .

Lloyds has more retail banking customers than any other bank in Britain, but needed a £20 billion bailout in the financial crisis.

Britain sold a 6 per cent shareholding in the bank in September and the bulk of the remainder of its holding is expected to be sold this year.

Lloyds said it expected to apply to the regulator in the second half of this year to restart dividends, which would boost the prospect of further stake sales. It last paid a dividend in 2008.

The bank took £3.5 billion more in provisions last year to compensate customers for past mis-selling, but said its core capital increased to 10.3 per cent.

It said prior to any dividends, it expected to generate core capital of about 2.5 percentage points over the next two years, and after that 1.5-2 percentage points a year.

Reuters