Lloyds probe over target bonus system

LLOYDS Banking Group is being investigated over its target-driven bonus system for frontline staff.

The group, which includes the Bank of Scotland and is 41 per cent owned by the taxpayer has been referred to the Financial Services Authority’s enforcement division and could face a fine.

The move came after the FSA announced plans for new rules if the financial sector did not address the use of incentive schemes, which it said were driving staff to mis-sell products in order to receive a bonus.

The FSA said practices included offering the first 21 sales staff to reach a target a £10,000 “super bonus”.

A statement from Lloyds said: “The group continuously reviews it policies and processes and from the start of this year we have made significant changes to our incentive schemes.”