Lloyds axes staff bonuses despite return to profitability
Lloyds Bank is set to scrap bonuses for all of its employees after it saw profits plunge due to the pandemic.
The bank returned to profit in the third quarter reporting a pre-tax profit of £1bn, well ahead of the average £588m forecasted by analysts.
But its pre-tax profit for the first nine months of the year remains 85 per cent lower after booking a surprise loss in the first half.
“Given our expected levels of profitability for 2020, we are unable to pay Group Performance Share (or bonus) awards to our people for this year,” a spokesperson for Lloyds said.
In October the bank announced it had rewarded its junior employees with a one-time cash reward of £250.
In a memo seen by the Financial Times, Lloyds’ people and property director Matt Sinnott told employees the bank would not meet the minimum threshold to make payouts.
“Despite the good news about the vaccine rollout, like most of our peers our year-to-date business performance continues to be challenging,” Sinnott said. “While we have returned to profit, we are not where we expected to be and are short of the commitments we made to ourselves and our shareholders.”
Unlike its peers Lloyds does not have an investment banking division to offset some of the losses in retail banking.
The bank also said it was considering offering its employees “recognition shares”. “This decision on bonuses in no way reflects the hard work and commitment our people have made throughout this extraordinary year,” the spokesperson added.
The decision to cancel payouts comes after Lloyds announced plans last month to axe over 1,000 jobs as part of cost-cutting measures.