Lloyds Bank's staff bonus pool increases by 12 per cent to £446m due to 'strong performance'

The group saw its net interest income surge by nearly a fifth to £13.2bn in 2022 as it benefited from higher borrowing costs and a boost to its net interest margin – which shows the difference between what a bank charges for loans and pays for savings. Its loan book surged by £6.3bn to a mammoth £475bin over the year. But the lender revealed it had put aside £1.5bn in credit provisions as it cautioned over an uncertain economic outlook and an uplift in borrowers defaulting on loans this year. It said in the fourth quarter it had observed a small increase in defaults, but that credit performance was generally strong despite the cost-of-living crisis.

Nevertheless, the group’s chief executive, Charlie Nunn, took home a total pay packet worth £3.8m for 2022, including a £1.3m shares bonus. Lloyds’ annual report also showed the bank’s staff bonus pool increased by 12 per cent to £446m “as a result of the group’s strong performance in 2022”.

Mr Nunn said: “While the operating environment has changed significantly over the last year, the group has delivered a robust financial performance with strong income growth, continued franchise strength and strong capital generation, enabling increased capital returns for shareholders. We know that the current environment continues to be challenging for many people and have mobilised the organisation to further support our customers.

“Our purpose-driven strategy is more relevant now than ever before. We remain committed to helping Britain prosper and helping the country recover from the current economic uncertainties.”

Richard Hunter, Head of Markets at interactive investor, commented: “Lloyds has brought the curtain down on the banks’ reporting season in some style, exhibiting its traditional strengths of efficiency, profits and generous levels of shareholder returns.

He added: “The challenge is now for Lloyds to maintain the momentum, particularly from a set of fourth quarter numbers which lift expectations.

"The group’s own outlook comments are notably understated and conservative, and may be a nod to the challenging UK economic backdrop which remains very much in evidence.

"Indeed, the tendency to tar Lloyds with the brush as a UK economy barometer may have impacted the share price performance.

"In line with each of its peers, the group has enjoyed a recent spike with the shares having risen by 12 per cent over the last three months.

"For Lloyds, however, the shares are flat over the last year, as compared to a gain of 6.5 per cent for the wider FTSE100 and investors will now need to decide whether the pace of change is enough to drive further measurable growth. Reaction to the numbers was mixed in early trade and set against a weaker wider opening, but the market consensus of the shares as a buy reflects some optimism that further efficiency, profitability and returns are all within reach.”