I was pleased to see that the Lloyds Banking Group has posted pretax profits of £2.2 billion. It’s cheering to see a publicly owned company announcing healthy returns on our investment.
However behind the headlines, the news isn’t all so rosy. Despite the increase, shares in Lloyds have dropped sharply, and their profit forecasts for 2011 have been downgraded. The group as a whole has also dropped over 26,000 jobs in it’s quest to cut costs – in a week when it’s departing chief executive, Eric Daniels, pockets a £1.45m bonus, and is in line for another £6m payout based on shares he already owns.
Let’s not forget, this is the guy who railroaded through a toxic merger with HBOS at the height of the banking crisis. This is the guy that saddled the group with billions of pounds of bad debts, and still seems to think it’s a good investment. It’s thanks to Daniels that the UK taxpayer is a major shareholder in Lloyds. We should all be worried about his financial acumen, and loudly question his bonus.
The profit announcement also serves as a reminder not to swallow the Coalition Koolaid, and believe the line that our current financial difficulties are due to overspending in the public sector. It was the bailouts of banks like Lloyds and Northern Rock that did for the deficit, not the NHS. If the Tories were in power at the time, they’d have had to do exactly the same thing.
Bail-in protests are going on this Saturday, turning HBOS banks across the country back into publicly owned and run spaces. These actions are great at pointing out the wild disparity between the profits that huge financial institutions make and the bonuses they pay, while vital services are being cut to the bone. Check out the UK Uncut site for more info, or follow @ukuncut on Twitter for the news on the ground as it happens.
Meanwhile, I’m going to find someone to help me dump these toxic shares I’ve been saddled with.