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Lloyds to scrap staff bonus despite Q3 profits

Lloyds Bank (LON: LLOY) has announced plans to scrap the staff bonus due to the plunge in profits over the pandemic.

Despite returning to profit in the third quarter, the lender said on Friday that it would axe the bonus as pre-tax profit for the first nine months of the year is 85% lower.

In the latest quarter, Lloyds profits were well ahead analyst expectations of £588m and hit £1bn in profits.

In a memo seen by the Financial Times, Matt Sinnott told employess: “Despite the good news about the vaccine rollout, like most of our peers our year-to-date business performance continues to be challenging. While we have returned to profit, we are not where we expected to be and are short of the commitments we made to ourselves and our shareholders.” 

A spokesperson for the group said: “Given our expected levels of profitability for 2020, we are unable to pay Group Performance Share (or bonus) awards to our people for this year.”

In November, Lloyds named Charlie Nunn as the new the next chief executive. Current chief executive Antonio Horta-Osorio will be stepping down next year and said on the news: “Charlie will find a warm welcome at Lloyds Banking Group and a deep commitment from all of our people to deliver on our purpose and to help Britain recover. I am sure that he will find his time here as fulfilling and fascinating as I have done and I wish him the very best.”

Nunn said: “Lloyds’ history, exceptional people and leading position in the UK means it is uniquely placed to define the future of exceptional customer service in UK financial services. I look forward to building on the work of António and the team and their commitment to helping Britain prosper.”

Lloyds shares (LON: LLOY) are trading 2.03% lower at 35.48 (1407GMT). In the year to date, shares have fallen from highs of 64.51.

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