The Lloyds Banking Group has once again been savaged in the press, this time for taking £260bn from the taxpayer with one hand and paying £80m in bonuses with the other. The latest state bail-out, offering asset protection from the bank's toxic investments, will see the Government take a controlling stake of 65-77 per cent in the group. Lloyds shareholders are furious about the HBOS debacle as Lloyds shares lurch lower.
- The reaction?
Lloyds and new majority owner UK Financial Investments (UKFI) said the bonuses were 'for junior staff', but the press were not placated. The Times and The Daily Telegraph talked of 'new anger' over the bonuses, while Liberal Democrat Vince Cable said there was 'no justification' to pay any bonuses. The reaction to the latest cash injection was similarly damning - exemplified by the Daily Mail's Alex Brummer, who lamented the 'disastrous' merger with the 'battered and badly run' HBOS. Furious shareholders are reportedly planning to oust chairman Sir Victor Blank and CEO Eric Daniels.
- PR players
Lloyds director of group comms Shane O'Riordain has been a visible presence through the latest crisis. The group also uses Finsbury for its financial comms.
- What next?
UKFI and Lloyds management face the unenviable task of meeting shareholders to gauge their level of anger and persuade them of the merits of the latest government intervention. Lloyds bosses have a lot of explaining to do to outline exactly how a formerly solid institution has fallen so spectacularly, seemingly as a direct result of the controversial merger. The bonus row is just a taster of the new challenges public ownership brings.
83% - Assets in the protection scheme that were HBOS'