By Press Association
Businesses were left bankrupt and owners lost homes after former HBOS manager’s £245m loans scam
Lloyds Banking Group expects compensation payouts for victims of fraud at the hands of former HBOS staff to total around £100m.
The lender said that it will pay compensation for “economic losses, distress and inconvenience” as part of a package of measures to assist victims.
This includes providing interim payments on a case-by-case basis to help those in day-to-day financial difficulty as a result of the fraud, covering “reasonable” fees for professional advice to customers and writing off remaining business and personal debts owed to Lloyds, and not pursuing repayment.
Last month Lloyds recruited Prof Russel Griggs to spearhead an investigation into whether it should compensate customers who became victims of fraud at the hands of former HBOS staff in Reading.
The Financial Conduct Authority is also resuming its investigation into the episode after it was placed on hold in 2013 at the request of Thames Valley police.
The watchdog said: “The FCA’s investigation is focusing on the extent and nature of the knowledge of these matters within HBOS and its communications with the Financial Services Authority after the initial discovery of the misconduct.”
Lloyds said the £100m provision will be included in its first-quarter results later this month.
The lender added that it has already “suffered losses and/or provided for at least £250m of credit losses” in relation to the affected cases at HBOS Reading in previous financial periods.
Lloyds also announced it would appoint a senior independent lawyer to consider whether the issues relating to HBOS Reading were investigated and appropriately reported to authorities at the time, following its acquisition of HBOS.
The Lloyds chief executive, António Horta-Osório, said: “As I have stated before, we would like to express our deep regret and apologies to any customers directly affected by the criminal behaviour of these individuals.
“We are absolutely determined that victims of the crimes committed at HBOS Reading are fairly, swiftly and appropriately compensated.
“We take responsibility for putting right the wrongs that were committed at HBOS Reading at the time. That is why today we are providing an additional package of measures to ensure that customers have all the help they need as we resolve their cases as quickly as possible.”