Lloyds fires eight staff and withholds bonuses over Libor scandal

Lloyds Banking Group has dismissed eight employees for their role in the manipulation of currency and the Libor rate, forfeiting bonuses worth £3 million.

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Lloyds, which is 24% owned by the government after its bailout, said the conduct of the unnamed employees between 2006 and 2009 was “completely unacceptable”. 

This follows the issuance of a £218 million fine on the bank by the Financial Conduct Authority (FCA) and US regulators.

Along with other banks, Lloyds was punished for manipulating the London interbank offered rate (Libor) for dollar, yen and sterling. 

However, it has also been found guilty of rigging fees payable to the Bank of England under the taxpayer-supported Special Liquidity Scheme, and attempting to reduce its payments.

While Lloyds has withheld bonuses averaging £375,000 per employee, the bank has admitted that it is powerless to reclaim bonuses given to staff that had already left the firm.

Four more employees have been cleared and may now return to work, but Lloyds’ new chairman Lord Blackwell suggested more bonuses could yet be cut. 

“The remuneration committee is tasked with ensuring that the outcome of the disciplinary process and the significant reputational damage and financial cost to the group are fully and fairly reflected in the options considered in relation to other staff bonus payments,” he said.

In July, Lloyds revealed that fines relating to its misconduct had slashed its actual half-year profits by more than 50%.

Photo: ell brown via Flickr

Further reading:

Barclays tops customer complaint table, but overall complaints fall

Lloyds Bank fined £218m over Libor scandal

Mark Carney: Lloyds’ behaviour ‘clearly unlawful’

Lloyds half-year profits slashed by PPI and Libor rate fines

‘Shocking and widespread malpractice’ should land bankers in jail, says commission