Lloyds bankers stripped of £1.4m bonuses

Monday 20 February 2012

Five current and former bankers at Lloyds will be stripped of about £1.4m in bonuses over their role in the mis-selling of payment protection insurance (PPI).

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The bank is demanding the return of the bonuses over the scandal that cost the part state-owned bank £3.2bn last year, according to the Daily Telegraph.

The bonus withdrawal will be the first time a British bank has used a "clawback" option on executive pay packages since the financial crisis.

The paper has named one of five senior bankers it says have been ordered to return their bonuses: Eric Daniels, Lloyds’ former chief executive, who is set to lose at least £360,000 of his 2010 bonus.

PPI was often sold alongside loans to cover repayments if borrowers fell ill or lost their jobs.

The product was labelled as worthless insurance for many customers by a British consumer group in 2008, which followed compensation claims by buyers.

In April last year, the industry lost a case in the high court to stop customers demanding compensation. Lloyds announced weeks after the decision its intention to set aside £3.2bn for likely payouts.