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Report: Lloyds' compensation for HBOS victims to drag on till 2018

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Report: Lloyds' compensation for HBOS victims to drag on till 2018

The process of Lloyds Banking Group Plc compensating victims of fraud at its HBOS Plc unit will run into 2018, the Financial Times reported.

To date, the bank has given £11 million to 24 out of the 65 customers seeking compensation for damage done to their businesses by HBOS before the global financial crisis, the newspaper said. Senior HBOS managers, together with a business turnaround firm, took control of companies and stripped their assets.

The delay is partly being caused by some affected customers seeking legal advice before responding to Lloyds' offer. "One banker close to the scheme" told the FT that 20 customers have not yet submitted the necessary information to the bank.

Lloyds missed a self-imposed deadline to compensate victims by the end of June. As a result, it offered them one-time payments of £35,000 each.

Some £5 million in ex-gratia payments have also been paid by Lloyds to approximately 100 directors of affected companies because of the length of the process, FT added.