Lloyds Bank scraps all bonuses for 2020 after pandemic hammers profit

[LONDON] Lloyds Banking Group is cancelling bonuses for all staff this year as the Covid-19 pandemic weighs heavily on its earnings.

A spokesperson for the bank confirmed it will not pay out any group performance share awards in light of expected profitability in 2020. The news was reported earlier by the Financial Times.

Lloyds expects to set aside at least £4.5 billion (S$8.07 billion) this year for loans likely to fail in the economic turmoil that's accompanied the pandemic. While it swung to a profit in the third quarter, full-year net income is set to be sharply lower at about £1.1 billion, compared to £2.5 billion in 2019, according to data compiled by Bloomberg.

The lender had already said its group executive committee had given up their bonus entitlements for the year.

Last week, the bank and other British lenders were given permission to resume dividends from next year, after scrapping payouts in March at the behest of the Bank of England. The move came with conditions from the regulator, including a "high degree of caution and prudence" on cash bonuses for senior staff.

A spokesperson said most staff will receive above-inflation pay increases in 2021, geared toward colleagues on lower pay.

BLOOMBERG