Lloyds share price: MPs slam lender’s overdraft charges

MPs have slammed a move by Lloyds Banking Group (LON:LLOY) to impose more expensive and complex overdraft fees on customers, Reuters has reported. The bailed-out lender’s move comes a few months ahead of a regulatory clampdown.

Lloyds’ share price has been steady in London this morning, having gained 0.52 percent to 63.87p as of 08:55 GMT, marginally underperforming the benchmark FTSE 100 index which currently stands 0.64 percent higher at 7,120.35 points. The group’s shares have lost more than six percent of their value over the past year, as compared with about a one-percent dip in the Footsie.

MPs criticise Lloyds

Reuters reported this morning that Nicky Morgan, chair of the powerful Treasury Select Committee, had said that Lloyds’ overdraft charges ‘fly in the face’ of clarity and transparency. The comments came as the lender, bailed out by the UK government during the financial crisis, began rolling out a tiered system of overdraft charges from last month, increasing charges for anyone borrowing less than about £4,100.

Reuters reported that Lloyds’ CEO Antonio Horta-Osorio had defended the charges in a letter to Morgan, saying that the bank had already moved to help customers by removing higher charges on unplanned overdrafts, in line with recent proposals by the Financial Conduct Authority. The newswire further quoted a spokesman by the bank as saying that the group would reflect on the points raised by the Treasury Select Committee.

Group launches buyback

In a separate development, Lloyds announced this morning that it was launching a share buyback programme to repurchase up to £1.75 billion of ordinary shares. The move came after the bailed-out lender said in its full-year results last month that it would spend  £4 billion on dividends and a share buyback.

As of 09:13 GMT, Friday, 01 March, Lloyds Banking Group share price is 63.87p.