Lloyds Banking Group (LON:LLOY) has moved to appoint Deloitte as its new auditor, the blue-chip lender has said. The lender has been forced to replace PricewaterhouseCoopers (PwC) under EU rules requiring the ‘mandatory rotation’ of auditors.
Lloyds’ share price has climbed higher in today’s session, having gained 2.16 percent to 57.21p as of 10:03 GMT. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.29 percent higher at 6,980.45 points. Lloyds’ shares have given up just under 13 percent of their value over the past year, as compared with a near six-percent drop in the Footsie.
Bank chooses Deloitte
Lloyds announced in a statement yesterday that its board had approved the proposed appointment of Deloitte as its auditor with effect from the year ending December 2021. The lender noted that PwC will continue to audit the group until the year ending December 31, 2020, and on completion of the 2020 audit they will stand down. The company further said that a formal handover process would “ensure a smooth and effective migration between Deloitte and PwC”.
Only viable option
Deloitte’s appointment comes after Sky News reported in August that conflicts involving the other ‘big four’ accountancy firms have had left Deloitte as the only viable option for the bailed-out lender. The newswire revealed at the time that KPMG was a ‘non-starter’ because of its role as the auditor of HBOS, which Lloyds bought during the financial crisis, while EY would be unlikely since it supervises the accounts of RBS (LON:RBS) the Co-operative Bank, Standard Chartered (LON:STAN) and several other major British-based lenders.
Earlier this week, a senior lawmaker demanded an investigation into the way Lloyds’ chief executive handled information related to fraud at the group’s HBOS Reading unit.