Lloyds Banking Group has delivered a £3.2billion bumper payout for investors and handed its boss a £6.4million pay package after reporting a record annual profits haul.
Chief executive Antonio Horta-Osorio hailed a “landmark year” as the bank saw bottom-line profits surge 24% to £5.3billion in 2017 and unveiled plans to invest more than £3billion as part of a new three-year strategy. On an underlying basis, profits rose 8% to £8.5billion.
The profits were lower than expected after another £600million hit from the payment protection insurance (PPI) mis-selling scandal.
But Lloyds cheered investors with a 20% rise in its dividend payout to 3.05p a share and announced a share buyback of up to £1billion, giving a total return to its 2.4million shareholders of up to £3.2billion – its highest ever, according to the group.
Pay details released alongside the results also showed that Mr Horta-Osorio saw an 11% increase in his total remuneration package to £6.42million, up from £5.79million.
His base salary has risen to £1.2million from £1.1million, alongside additional increases to his long-term incentive plan and benefits.
The bank said it would increase the wider staff bonus pool by around 5.5% to £414.7million for 2017 after the 2017 profits rise.
Mr Horta-Osorio defended his pay deal, saying it was “not up to me to decide my pay, it is up to the board and the remuneration committee”.
Having steered the group back to private ownership last summer, nearly nine years after being bailed out at the height of the financial crisis, he said his new strategy was a “bold and ambitious” plan to invest in technology and staff.
It will include the group’s “biggest ever investment in people” as it looks to increase staff training and development by 50% to 4.4million hours a year to embrace new technology.
Lloyds will also revamp its banking app and digitise 70% of its processes by 2020, aiming to have more than 50million online banking customers in the same time-frame.
In addition, it plans to beef up its financial planning and retirement business, expanding its corporate pension customer base by a million.
The group said the size of its branch network would continue to reflect the shift to online banking, but it would look to maintain its market-leading share of bank branches in the UK, currently standing at 21%.
Mr Horta-Osorio added: “I’ve always been a strong believer in branches. We will continue to have the biggest branch network in the country.”
