Outlook: The aggressive culture at Lloyds is a shameful indictment of banking

 

Outlook Champagne bonuses, Christmas cracker competitions, "Grand in your Hand" contests: welcome to the wacky world of Lloyds bank's staff incentive plans.

The carrots really do sound delightful, but wait until you see the sticks: salaries that collapse if you don't hit your targets, monitors showing in real time how well or badly you're doing, the threat of minuscule bonuses for those demoted to lower salary brackets.

This isn't the fluffy Lloyds we see in the TV ads: it's the sweaty palmed stress pit of Glengarry Glen Ross, the film that sales executives the world over quote like the Bible. Permit me to do the same, citing the words of Blake, the terrifying senior executive (who doesn't look entirely dissimilar to Lloyds chief Antonio Horta-Osorio). Blake is dispatched from head office to scare his downtrodden salesforce into selling more real estate: "We're adding a little something to this month's contest," he barks. "As you all know, first prize is a Cadillac Eldorado. Anyone want to see second prize? Second prize is a set of steak knives. Third prize is you're fired. You get the picture? You're laughing now?"

If you attempt to enter the twisted logic of Lloyds managers at the time, you can see why they embarked on those fleece-the-punter incentive schemes. Customers no longer wanted investments after being burned by the financial crisis, protection products were hugely profitable, and most people didn't have them yet. Who wouldn't want to head into a goldmine like that in a time of recession?

But Lloyds didn't just jump in, it leapt with two big, fat feet, telling its managers they had to double their customer base of "bancassurance" (insurance flogged through the retail bank) by 2015.

And to ensure this happened, it created possibly the most aggressive retail bonus strategy outside the eat-what-you-kill world of the stockbroking boiler rooms – bonus schemes in which salesmen inevitably come to view naïve and unsophisticated customers much as hungry lions gaze at the junior wildebeest.

There are, of course, rules against these types of behaviours. The regulator warned Lloyds specifically and repeatedly about creating dangerous incentives, not to mention the £1.9m it was fined for misselling savings bonds a decade ago. Those previous knuckle raps were partly why the fine was so high. Lloyds attempted to describe the scandal in terms of historic failings. But we should not be kidded. These weren't salesmen barking into breezeblock-sized mobile phones, but bank staff working right up to March 2012.

Some at the bank appeared to be placing the blame on Helen Weir, the (conveniently) now-departed head of retail banking at the group who left in 2011. Expect the board to be clawing back some of her bonus for that year. However, there might not be much left in the pot, given that she has already felt the bank's talons recoup part of her £875,000 bonus due to the PPI misselling scandal. The same goes for former chief executive Eric Daniels, who got £1.45m of deferred performance pay for the relevant 2011 year.

It is proper that Ms Weir be punished, as the board member responsible for all things retail. And that Mr Daniels carries the can as well. But I suspect these disgraceful performance contracts would have been dreamt up by those below director level and the bank appears unable to say whether those individuals have been punished, fired, or had to hand back their bonuses.

"It takes brass balls to sell real estate," the diabolical Blake declares to the staff in Glengarry Glen Ross. It shouldn't take the same physical attributes to sell critical illness cover at High Street banks. Lloyds' customers will not be happy until all of the bank's Blakes have been run out of town.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back