Thursday 21 May 2020 2:40 pm

Lloyds boss says bank can absorb coronavirus loan defaults

The chief executive of Lloyds Banking Group today said the bank would be able to soak up a jump in loan defaults triggered by the coronavirus pandemic.

Antonio Horta-Osorio told the bank’s annual meeting today that supporting customers hit hard by the pandemic was the “right thing to do”, but would have a financial impact on the bank.

Read more: Lloyds says it has provided £4bn support to businesses during coronavirus crisis

Lloyds was criticised for slow lending at the start of the crisis, but has increased its support for businesses in recent weeks.

Lloyds has provided nearly £5bn to customers via the government’s coronavirus loan schemes, as well as one million repayment holidays for individual customers, the bank said.

Lloyds’ first quarter profit was nearly wiped out after it retained £1.4bn to cover bad loans.

Profit before tax slumped to £74m from £1.6bn the previous year as Lloyds took a massive impairment charge of £1.43bn as it expects bad loans to mount up in a worsening British economy.

Read more: Lloyds delivers over £1bn in ‘bounce back loans’ on first day of scheme

Lloyds could face dissent from shareholders over its executive pay arrangements, after proxy advisors ISS recommended investors block its pay policy over concerns about a switch to virtually guaranteed long term bonuses.

Voting results will be published later today.