Lloyds Banking Group (LON:LLOY) expects compensation payouts for victims of a scheme run by two former HBOS bankers to reach £100 million, the FTSE 100 lender has said. The fraud, which took place before the FTSE 100 group acquired HBOS, saw the two corrupt employees of the bank impose a firm of turnaround consultants on their small business customers in exchange for bribes.
Lloyds’ share price has been subdued in London in today’s session, having lost 0.68 percent to 63.16p as of 10:23 BST, slightly underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.02 percent lower at 7,301.67 points. The group’s shares have lost more than two percent of their value over the past year, but are up by a little over one percent in the year-to-date.
Lloyds announced in a statement today that following the conclusion of the HBOS trial, it would provide “fair, swift and appropriate compensation” for the fraud at the hands of former staff of the unit in Reading. The lender, which had to be rescued by the British government after it acquired HBOS in January 2009, expects that compensation for economic losses, distress and inconvenience will be in the region of £100 million. The company will include the provision in its first-quarter results due out on April 27.
“We take responsibility for putting right the wrongs that were committed at HBOS Reading at the time,” Lloyds’ chief executive António Horta-Osório commented in the statement. “That is why today we are providing an additional package of measures to ensure that customers have all the help they need as we resolve their cases as quickly as possible.”
Lloyds noted that it had already set aside at least £250 million to cover other costs related to the HBOS fraud.