Lloyds Scraps Staff Bonuses as Covid-19 Hits Profits -- Financial News

By David Ricketts

Of Financial News

Lloyds Banking Group PLC won't pay bonuses to any staff this year after the onset of the Covid-19 pandemic dealt a severe blow to its profits.

The U.K. lender, which in November announced Charlie Nunn as its next chief executive, has told employees that it is unable to meet the minimum profit level needed to pay out bonus payments to workers in 2020.

The decision, which was first reported by the Financial Times, comes despite Lloyds posting a pretax profit of 1 billion pound ($1.36 billion) during the third quarter--comfortably beating analyst expectations. The profit was a turnaround from the more than GBP670 million loss Lloyds Banking Group reported during the previous three month period.

A spokesperson for Lloyds Banking Group said: "Given our expected levels of profitability for 2020, we are unable to pay group performance share awards to our people for this year."

"This decision on bonuses in no way reflects the hard work and commitment our people have made throughout this extraordinary year to keep our businesses operating strongly and to provide support and help to our consumer and business customers."

Lower profit levels at Lloyds Banking Group comes after a recent report by McKinsey, the consultancy, warned the banking sector could lose as much as $3.7 trillion in revenues over the next three years as a result of the pandemic.

The Lloyds Banking Group spokesperson added that the bank would be making "above inflation pay increases" for most of its staff in 2021, which will be targeted toward those on lower pay.

The bank published its first ethnicity pay gap report on Dec. 11 where it revealed that its black employees are paid 20% less than their colleagues.

Overall, using the median figure, BAME employees at the bank are paid 15% less than their colleagues. However, the bank said that on an average basis, BAME colleagues aren't paid less than their white colleagues at any individual grade within the group.

Website: www.fnlondon.com

(END) Dow Jones Newswires

December 18, 2020 10:09 ET (15:09 GMT)

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