Lloyds CEO says bank can weather spike in bad loans from coronavirus crisis

Supporting customers hit financially by the pandemic ‘the right thing to do’

People  queueing  outside  a Lloyds bank in England. The bank’s first-quarter profit was all but erased after it set aside £1.4bn  for likely bad loans. Photograph:  Getty Images

People queueing outside a Lloyds bank in England. The bank’s first-quarter profit was all but erased after it set aside £1.4bn for likely bad loans. Photograph: Getty Images

 

The chief executive of Lloyds Banking Group said in a statement at the bank’s annual investor meeting on Thursday that the lender was resilient enough to absorb a spike in bad loans through the coronavirus crisis.

Antonio Horta-Osorio said supporting customers hit financially by the pandemic was the “right thing to do”, but that this would come at a financial cost to the bank.

Lloyds faced criticism for a slow start in providing emergency loans to companies left out of pocket following a near-shutdown of the UK economy in March, but has stepped up its support in recent weeks.

It has provided nearly £5 billion (€5.6bn) of state-backed finance through the government’s various relief schemes, as well as one million repayment holidays for individual customers, the bank said.

The bank’s first-quarter profit was all but erased after it set aside £1.4 billion for likely bad loans.

Lloyds could face dissent from shareholders over its executive pay arrangements after influential advisors ISS recommended investors block its pay policy over concerns about a switch to virtually guaranteed long-term bonuses. – Reuters