For each mis-sold PPI policy that Lloyds is refunding, its employees are losing up to £1,500 in salary and bonuses.
According to Lloyds’ recently released annual report, without the legal and regulatory costs from PPI, the bank could have recouped £124 million in profits. The figures show that management improvements of underlying assets could’ve improved the fortunes for the bank.
The staff would’ve received an average bonus of £6,126, which would equate to about £1,500 per employee and this has been lost due to the PPI scandal.
Despite better results in 2015, the group’s total bonus outlay has reduced to £353.7m. This includes a 26% collective performance adjustment being applied to the total bonus outcome.
Cash bonuses are capped at £2,000 with the remainder in shares. Those share payments are delayed for several years, with the size of the final payout dependent on performance.
Other banks have also hiked their PPI provisions, in part because the City regulator is planning an advertising campaign followed by a deadline on claims, measures which are expected to lead to a surge in claims.