£117m fine for Lloyds but boss docked just £350,000

LLOYDS has docked just £350,000 in bonuses from its £11.5million-a-year boss despite a record penalty yesterday for mistreating its customers.

In another day of shame for Britain’s biggest bank, it was fined £117million for rejecting complaints from people mis-sold payment protection insurance.

Lloyds, which has to pay £490million to affected custmers, said it had clawed back £2.65million from 14 senior executives, including the £350,000 from chief executive Antonio Horta-Osorio (pictured below).

But a leading Tory MP said ‘the punishment did not fit the crime’ because the fine would barely dent Mr HortaOsorio’s finances.

‘This is a paltry sum which is extraordinarily affordable for someone earning £11.5million a year,’ said Mark Garnier. The penalty imposed by the Financial Conduct Authority is more than twice the size of the next biggest retail fine imposed on any firm.

As part of the settlement, the statebacked lender is compensating 326,000 customers refused PPI pay-outs. They will receive £1,495 on average.

The authority revealed that Lloyds used 7,000 complaints-handling staff to stonewall customers who had been ripped off. The tactics included failing to investigate cases properly. The problems occurred between March 2012 and May 2013, during which time state-owned Lloyds received 2.3million complaints about PPI and rejected almost four in ten. After being forced to reopen these complaints, Lloyds found that 326,000 were unfairly rejected.

Richard Lloyd of consumer group Which? said: ‘The fine should be a red flag for any banks that are stopping people getting back money they’re rightly owed. The regulator must continue to force banks to change their culture so failings like this aren’t repeated.’

Lloyds chairman Lord Blackwell said: ‘We accept the FCA’s findings and apologise to those customers who were impacted.’

Lenders have set aside around £25billion to compensate customers who bought PPI.

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