Lloyds sale could be delayed
The UK government's sale of Lloyds Bank is reportedly coming under question, due to the bank's shares trading at a three year low. Lloyds shares were acquired by the Labour government in 2008 at 73.6p, while they now trade at 64p. The government had planned to sell shares to retail investors at a discount, but now reports suggest that this plan could be delayed, and may be scrapped altogether.

Lloyds Banking Group's chief executive and head of wholesale banking at the time of its government bailout are both suing the bank for bonus payments they claim were unfairly withheld. In an action filed at the High Court this month, Eric Daniels, the former chief executive who left the bank in 2011, and Truett Tate, ex-head of wholesale banking who quit one year later, claim they are owed part of a bonus for 2012. "One source with knowledge of the claim said the dispute focused on the bonus's performance criteria, with the former… executives arguing that despite meeting performance targets they had still not been paid," says The Times. Daniels's claim is understood to be worth around £500,000, while Tate's is unknown but "given his seniority it is likely to be a similar amount". The action could prove "controversial", says the Times, as the duo had major roles when Lloyds received more than £20bn from the government and was involved in mis-selling billions of pounds of payment protection insurance. Both have gone on to secure lucrative financial services roles since leaving the bank. Daniels holds directorships at the peer-to-peer lender Funding Circle, the boutique investment bank Stormharbour and the private equity firm CVC Capital Partners. Tate is head of the wholesale banking arm of the Australian bank ANZ and has a number of City directorships. Lloyds was considered to be relatively well insulated from the financial crisis but there are questions over its agreement to buy crisis-stricken Hbos in a government-backed deal in 2008. The Economist says executives at Lloyds are accused of covering up the parlous state of Hbos's finances and overpaying by buying it for £8bn. This reduced the value of existing shareholders' holdings. Shareholders are suing the bank and former executives (including Daniels and Tate) in a case that's due to go to trial later this year. Lloyds hit by another £1.6bn of misconduct charges 27 July Skip advert Lloyds Banking Group's half-year profits have been hit by another £1.6bn in charges for past misconduct. The bank has been forced to set aside another £1.05bn for payment protection insurance (PPI) mis-selling, taking the total cost of the scandal to £18bn. That's around half of the total for the whole UK banking sector.

Lloyds had previously said the cost of the PPI issue was fully accounted for, but "the number of claims has increased… ahead of the financial regulator’s compensation deadline in August 2019", says the Financial Times. George Culmer, chief financial officer at the bank, said of the latest PPI provision that it was "disappointing to do it again". Elsewhere, the bank set aside £540m to cover a range of compensation costs, including adding to a pot to compensate customers who were "mistakenly charged" for falling into mortgage arrears, says the BBC. The regulator investigated charges on mortgage customers between 2009 and 2016 and concluded "the bank did not always do enough to understand customers' circumstances and check that their arrears payment plans were affordable and sustainable". It has now allocated of total of close to £300m to refund all fees charged for arrears management schemes, as well as any litigation costs and to offer payments for "distress and inconvenience". Pre-tax profit for Lloyds came in at £2.5bn for the six months to the end of June, up four per cent on last year but below analyst expectations of £2.9bn. Stripping out one-off costs such as the compensation provisions, the bank reported an underlying profit of £4.5bn, up from £4.2bn in the same period last year. Income rose from £8.9bn to £9.3bn. Laith Khalaf, senior analyst at stockbrokers Hargreaves Lansdown, said: "It's a sign of Lloyds' strength that it can shrug off £1.6bn of misconduct charges to post a strong rise in profits. "Overall, this is a strong set of numbers from Lloyds, blighted, but not overshadowed, by misconduct costs. The government has exited the bank and is now no longer selling stock in the market, which removes a significant downward pressure on the share price." Lloyds’ share price fell 2.2 per cent in morning trading, to 67.5p. Lloyds back in private hands - and claims £900m taxpayer profit 17 May Skip advert Lloyds Banking Group is finally back in private ownership after the government's remaining two per cent stake in the bank was sold in its "drip feed" share sale. "Lloyds is now back to business as usual, and the withdrawal of a large seller from the market should be positive for the share price," Laith Khalaf, senior analyst at Hargreaves Lansdown, told the BBC. Shares were trading for around 70p at the time of the sale, less than the 73.6p average paid by the then Labour administration at the time of the bank's 2009 bailout.