With preparations under way for a sell-off of part of the 33% remaining taxpayer stake, Horta-OsÓrio played down the impact of Scottish independence on the bailed out bank which owns Bank of
The Portuguese banker – who took the helm in
A bonus pool of £395m will be shared between 91,000 staff who on average are to receive £4,500, which the bank insisted had been reduced as a result of the bill for compensating customers for mis-selling payment protection insurance and last year's £28m fine from the
The bank reported a statutory profit of £415m – a loss of £802m after tax. Lloyds reported a £606m loss a year ago after being rocked by a £3bn fine for PPI mis-selling. The bank admitted a week ago that its total bill for PPI mis-selling is now approaching £10bn.
Union officials reacted angrily to the boss's bonus, when they have been offered a 2% pay rise. Staff numbers have been depleted by more than 35,000 since the 2008 bailout and a cost-cutting programme by Horta-OsÓrio.
"The CEO's £1.7m bonus, on top of shares worth millions awarded at the end of October, are a kick in the teeth to the taxpayer and to hard-working staff who don't know if they will be next in line for the chop from one day to the next," said Unite national officer,
"Profits have doubled thanks to ordinary workers doing extraordinary work behind the scenes to turn the bank around but they have been rewarded with an insulting 2% pay deal – the lowest pay deal of the big four banks so far," Macgregor said.
The underlying profit was £6.2bn, double a year ago.
Horta-OsÓrio said he was taking his bonus after the share price rose 70% last year compared with a performance of rivals of between a 12% rise and a 14% fall. The price allowed the government to sell off part of its stake in September and there are expectations that a further share sale could begin after the annual report is published on 6 March. "I came to Lloyds three years ago to fix this bank and help taxpayers get their money back," he said. "We are a normal bank," he said. His counterparts at
The later £1.7m award of shares will only be handed to the Lloyds chief if the targets are met and then he will be required to hold them until 2019.
Horta-OsÓrio has now begun work on a new three strategic plan for the bank, which is being forced to spin off its TSB brand under the terms of its bail out, in a move that could signal branch closures in the future.
A prospectus is already being drawn up as a sales document for prospective buyers of the shares but it is not going to contain any warning about the impact of a potential yes vote to Scottish independence in September. Horta-OsÓrio said: "We will absolutely respect whatever decision the Scottish people will take". The 18-month period before independence for
The shares were down 2% at 82p in early trading. The bank had already warned last week that it would not be able to resume dividends until towards the end of this year, later than some analysts had hoped.
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