Lloyds has set aside £100m to help HBOS fraud victims, as the FCA opened a new investigation

Emma Haslett
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Lloyds chief executive Antonio Horta-Osorio expressed his "deep regret" over the fraud (Source: Getty)

Lloyds Banking Group said today it has set aside £100m for victims of an HBOS fraud which ran up losses of £250m for the now collapsed bank.

In February six people, including two former HBOS bankers, were jailed for 50 years between them for their roles in a scheme which ran the business into the ground for their own personal gain.

Today shares in Lloyds fell one per cent to 62.98p as it said it will use the cash it has set aside to provide interim payments to victims struggling with day-to-day living costs, cover legal and financial advice fees during the course of a review into the fraud, and write off debts.

The news came as the Financial Conduct Authority (FCA) said it was reopening an investigation into the fraud, which took place in HBOS' Reading-based impaired assets team.

The investigation, which was on hold while the criminal trial took place, will focus on the "extent and nature of the knowledge of these matters" and the bank's communications with the financial regulator at the time, the Financial Services Authority.

Lloyds said it was co-operating with the FCA's investigation. Last month it launched an independent review, headed up Professor Russel Griggs, the former chair of the CBI's small business council.

The £100m provision will be included in Lloyds' interim results at the end of this month.

"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," said Antonio Horta-Osorio, the bank's chief executive.

"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.”

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