Lloyds share price: Group to pay more bonuses than bailed-out peer RBS

on Feb 6, 2017
Updated: Oct 21, 2019
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Lloyds Banking Group (LON:LLOY) is set to pay more bonuses than peer Royal Bank of Scotland Group (LON:RBS) for the first time in a decade. The move would underscore the diverging performances of the two UK lenders following their taxpayer-funded bailouts during the financial crisis.

Lloyds’ share price has advanced in London this morning, having added 0.84 percent to 66.40p as of 08:24 GMT, outperforming the broader London market, with the benchmark FTSE 100 index currently standing 0.06 percent higher at 7,192.55 points. The group’s shares have gained six percent so far in 2017, but remain below the government’s break-even price of 73.6p. RBS’ share price meanwhile has fallen deep into the red and is currently 0.96 percent worse off at 226.30p.

The Financial Times reported over the weekend that analysts predict that Lloyds will deliver an almost trebling of net profits when it updates investors on its full-year results later this month, while RBS is braced for its ninth consecutive year of heavy losses. People with knowledge of the matter meanwhile told Sky News that RBS’ bonus pool is set to shrink by eight percent to about £340 million, while Lloyds is expected to boost its bonus pool by nine percent to £390 million.

Sources further told the newswire that UK Financial Investments, the body which manages the taxpayer’s stakes in the bailed-out lenders, is likely to insist again on a £2,000 limit being imposed on cash bonuses for staff at RBS and Lloyds. The FT notes, however, that the bonus of António Horta-Osório, Lloyds’ chief executive, is likely to face extra scrutiny because he was forced to express ‘deep regret’ to staff last year after the Sun newspaper reported that he had conducted an affair while on a business trip.
Lloyds’ is scheduled to update investors on its full-year performance on February 22, while RBS’ results are due out on February 24.
As of 08:55 GMT, Monday, 06 February, Lloyds Banking Group share price is 66.38p.

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