Lloyds takes fresh £600m hit to cover compensation costs of the HBOS scandal in Reading
Lloyds Bank has set aside another £600million to cover the cost of compensating victims of a fraud at the Reading branch of HBOS.
The lender has now spent £1.2billion on clearing up the scandal, which it took responsibility for after buying HBOS in 2009.
The HBOS Reading debacle occurred between 2003 and 2007, when six bankers and advisers milked millions of pounds from struggling business customers and used the cash to go on luxury holidays and pay for prostitutes.
Compensation costs: Lloyds has now spent £1.2bn on clearing up the HBOS scandal, which it took responsibility for after buying the banking and insurance firm in 2009
Almost 200 business owners saw their livelihoods destroyed, and their total losses have been estimated at more than £1billion. The perpetrators were jailed in 2017.
Lloyds launched a scheme to compensate victims, but a review by retired High Court judge Sir Ross Cranston found it had ‘serious shortcomings’ as it paid out just over £100million.
Since then, another former judge Sir David Foskett has been leading an independent panel which is reviewing all of the cases, and deciding what redress is actually due.
As it revealed its 2021 results yesterday, Lloyds said the Foskett review was awarding much higher levels of compensation in the few cases it had assessed so far.
Lloyds posted pre-tax profits of £6.9billion for 2021, missing forecasts but up from £1.2billion a year ago.
It announced a dividend of 1.33p per share, bringing the total to £1.4billion for the year, and a £2billion share buyback.
The bank also reinstated its bonus pot, which was axed last year, doling out £399million to top staff.