Lloyds Ex-CEO Daniels Says Taxpayer to Get Handsome Return
“The taxpayer did very well” by providing funding, which was “above commercial rates,” Daniels told parliamentarians at the Public Accounts Committee in the House of Commons today. “The taxpayer will do very well indeed” from its holdings in the bank’s shares, he said.
Daniels led Lloyds’s takeover of HBOS Plc in September 2008, which forced the lender to seek a government bailout, leaving taxpayers with a 41 percent stake in the bank. Daniels was replaced as CEO in March by Antonio Horta-Osorio, who joined from Banco Santander SA.
The taxpayer will get a “handsome return,” Daniels said. The U.K. injected more than 20 billion pounds ($32 billion) into the bank to boost its capital during the credit crisis. Daniels last month said he hadn’t decided whether to accept his 1.45 million-pound bonus for 2010.
“Hopefully the taxpayer will make a profit, not a loss, and it looks like that’s going to happen,” said Stephen Hester, CEO of Royal Bank of Scotland Group Plc (RBS), which is 83 percent government-owned. “Recriminating all the time and if you like looking on the negative side of life isn’t going to help us grow.”
Hester, 50, will get about 6.5 million pounds in shares in addition to his 1.2 million-pound salary for last year, RBS said this month. The bank’s nine top executives were awarded a total of 28 million pounds in shares. RBS, Lloyds, Barclays Plc (BARC) and HSBC Holdings Plc (HSBA) agreed to pay lower bonuses to U.K. staff under the so-called Project Merlin agreement with the government.
Hester’s said his pay is at the “low end” of comparable jobs, “albeit at the high end of society.”
“People are suffering” from a credit crisis and bankers should show “sensitivity” when deciding whether to accept their bonuses, said committee Chairwoman Margaret Hodge. “It’s a bridge too far.”
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