Lloyds £446million bonus pot is largest in four years
By Laura Enfield | 22nd February 2023
Lloyds Banking Group staff will share a £446million bonus pool for their work in 2022- their largest in four years, reports The Guardian.
The money giant- which has headquarters in Barnwood, Gloucester- will hand its chief executive Charlie Nunn a £3.8m share of the awards.
The bonus pot figure is up 11% from £399m last year and is the largest sum to be distributed among employees since 2018. It is also above the peak rate of inflation seen over the year.
The increase comes despite the lender reporting flat annual profits as it put aside more money to protect against a potential jump in defaults amid ongoing economic uncertainty.
Lloyds, which owns Halifax and is the UK's largest mortgage lender, has reported earnings of £6.9billion for 2022, in line with average estimates from analysts.
This is despite recording a near-50% jump in net interest income to £14bn, which accounts for the difference between what the bank pays out to savers and charges its loan and mortgage customers.
A series of interest rate hikes by the Bank of England, compounded by Liz Truss's disastrous mini-budget in September, have led UK lenders to drastically increase borrowing costs on mortgages and loans. Those charges led to a substantial increase in net interest income for Lloyds in the final three months of the year, helping fourth-quarter profits surge 80% to £1.8bn.
Mr Nunn has said a "mortgage shock" is awaiting around 200,000 of its home loan customers.
He told Sky News that 10% of its mortgage customers were due to exit a fixed rate deal this year and it was actively speaking to many households about affordability given hikes to rates over the past year.
He said: "Where we're really focused on as a bank is looking at those customers that are going to have an increase in their mortgage payments which is going to increase their interest they pay as a percentage of their income.
"There's less than 1% of our customers that we think are going to have a mortgage interest shock like that and what we've been doing is quietly reaching out to them."
The group fears defaults could rise as a result of higher interest rates - mostly a consequence of Bank of England efforts to combat inflation - combined with the squeeze created by the wider cost of living crisis.
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