Lloyds takes another £2bn hit for PPI

'‹Lloyds Banking Group has posted a drop in annual profits after revealing another £2.1'‹bn hit for payment protection insurance (PPI) mis-selling.
Lloyds rewards shareholders with special dividendLloyds rewards shareholders with special dividend
Lloyds rewards shareholders with special dividend

The high street lender said the extra charge for PPI took its total bill for the scandal last year to £4​bn.

This left bottom line pre-tax profits 11​ per cent​ lower at £1.6​bn in 2015.

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But Lloyds​, which owns the Halifax, ​said underlying profits rose ​five per cent​ to £8.1​bn and confirmed it ​i​s sharing out a £353.7​m bonus pot among staff, working out at £4,600 per employee on average.

​Chief executive​ Antonio Horta-Osorio has also been awarded a deferred shares bonus worth £449,000.

Lloyds said shareholders w​ill​ get a special dividend of 0.5​p a share, demonstrating its recovery from the financial crisis​.

The bank, rescued during the financial crisis at a cost of ​£​20.5​bn to taxpayers, said it would ​also ​pay an ordinary dividend of 2.25​p a share, giving a total payout to shareholders of ​£​2​bn.

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Mr Horta-Osorio has also secured a ​six per cent​ pay rise to £1.13​m - his first since joining the group in January 2011.

But ​four per cent​ of the salary rise will only be paid in shares, which will be awarded when the Government sells its final ​nine per cent​ stake in the group.

Lloyds ​said its annual staff bonus pot was down from £369.5​m in 2014.

Mr Horta-Osorio shrugged off recent sharp falls in the group's share price amid a wider sell-off in the banking sector on concerns over the impact of a global economic slowdown.

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He said: "Our differentiated, UK-focused, retail and commercial business model continues to deliver, with our financial strength, cost leadership and lower risk focus positioning us well in the face of current market uncertainty."

He remained tight-lipped on the bank's position on Britain's vote on European Union membership, saying it was a "matter for the British people".

The group will discuss the June 23 referendum at its upcoming board meeting, he said.