Lloyds Banking Group has revealed a 12% increase in its bonus pool for 2022 despite pre-tax profits remaining flat on the previous year.
The bank – Britain’s biggest mortgage lender – revealed earnings of £6.9bn for the 12 months, matching the sum achieved in 2021.
The results statement showed that a leap in earnings from higher interest rates were largely offset by a £1.5bn provision for bad loans that was booked by the bank over the course of the year – £500m of it in the final quarter.
The charge reflects mounting concern that more customers are at risk of defaulting on their obligations because of higher interest rates amid the cost of living crisis.
The 12% rise in the bonus pool to £446m, revealed separately in the bank’s annual report, is above the peak rate of inflation seen over the year as soaring energy costs associated with Russia‘s war in Ukraine intensified the squeeze on household budgets.
Chief executive, Charlie Nunn, would take £1.33m of that sum, the document said, plus a long-term share plan award of 150% of salary.
It took his total awards to £3.8m.
The bank, which incorporates Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows, also announced it would pay a 1.6p per share final dividend and a share buyback of up to £2bn.
It amounts to £3.6bn of shareholder returns.
The group said rising interest rates and additions to its loan book helped profits almost double over the final three months of 2022.
The latter rose by £6.3bn to £475bn over the year.
