Lloyds alarm at Scots ‘uncertainty’

The prospect of Scottish independence is causing huge uncertainty in the banking sector, the chairman of Lloyds admitted today.

Lord Blackwell told shareholders at the annual meeting in Edinburgh that although bank officials were looking into the implications of an independent Scotland, there were huge problems because no one knew what it would mean in practice.

Lord Blackwell conceded there were real risks involved for British banks, including the possibility of Scotland using a different currency to the rest of the UK.

But he stressed that the bank was not able to put aside any money to cover the potential costs because no one knew what these might be.

David Fearby, a shareholder from Leeds, asked: “What contingency plans have you got in place should Scotland vote for independence?” The board was also asked whether it would hold its AGM in England, rather than Scotland, next year and whether it could guarantee that all Lloyds jobs in Scotland would be safe after independence.

Lord Blackwell insisted he could not answer most of these questions because no one knew what the outcome of the vote would be and what would happen afterwards.

He added: “Scottish independence is a matter for the Scottish electorate. Lloyds Banking Group does not have a corporate view on that.” But, he admitted: “There are uncertainties created for everyone in advance of the referendum and those uncertainties bring risks with them.”

Lord Blackwell defended Lloyds’ pay and bonuses regime, saying: “The average bonus paid per employee is £4500, which reflects the fact we are a retail and commercial, not an investment, bank.”

However, Alexander Hopkinson-Woolley, a shareholder from the Isle of Wight, said: “For our executive chief executive to receive £1.3 million a year, this is a massive mistake.”