Lloyds To Claw Back Pay As Libor Fine Looms
Lloyds Banking Group is to examine whether it can claw back millions of pounds paid to former executives who will next week be implicated in the global Libor rate-rigging scandal.
Sky News understands that the taxpayer-backed lender's board will discuss the scope for bonus clawbacks shortly after it announces settlements with regulators in the UK and US, which could take place as soon as Monday.
Insiders said that up to 15 Lloyds employees would face investigations as part of disciplinary proceedings to be launched by the bank once the fines, which could be as high as £300m, are confirmed.
Several managers who were involved in Lloyds'†Libor rate submissions have already been suspended.
The clawback move by Lloyds, which is 25% owned by the taxpayer, is expected to be welcomed by George Osborne, the Chancellor.
Royal Bank of Scotland, which was fined £390m manipulating benchmark rates in February last year, deducted £300m from that year's bonus pool to cover part of the cost of the penalties. Additional sums have been docked in subsequent years.
Lloyds was the first of the major banks to cancel outstanding bonus awards to top executives, announcing in 2012 that it would reduce the bonus of former chief executive Eric Daniels after the scale of its payment protection insurance mis-selling became clear.
However, the bank may face a tough challenge to reclaim or cancel bonuses because of the length of time that has passed
Lord Blackwell, Lloyds' new chairman, is expected to examine the issue during forthcoming discussions with board members.
Barclays was the first bank to settle with regulators for manipulating Libor submissions, paying £290m in June 2012.
Bob Diamond, the bank's former chief executive, and Marcus Agius, its chairman, both left their jobs over the scandal.
Since then, though, some banks, including RBS and UBS, have paid substantially higher penalties, and others, such as Deutsche Bank, could also
Lloyds said on Friday that it "notes the recent media coverage regarding potential settlements with a number of government agencies and their investigations into submissions, communications and procedures around the setting of Interbank Offered Rates and other benchmarks.
"LBG confirms that it is in late-stage settlement discussions with a number of agencies. The settlements remain to be agreed and LBG expects they will include the payment of penalties.†
"LBG will update the market on these issues as appropriate."
The bank declined to comment on potential bonus clawbacks or on disciplinary action against employees.