Lloyds offers payments to HBOS victims after compensation rebuke

FILE PHOTO: People walk past a branch of Lloyds Bank on Oxford Street in London, Britain July 28, 2016. REUTERS/Peter Nicholls

LONDON (Reuters) - Lloyds Banking Group LLOY.L has offered additional payments of 35,000 pounds each to 191 victims of one of Britain's biggest banking scandals, after a review of its handling of a compensation scheme found "serious shortcomings".

Britain’s biggest mortgage lender has struggled to contain the fallout from a fraud at Halifax Bank of Scotland’s branch in Reading, which led to six people being jailed in 2017.

The scam involved small business customers being targeted and referred to a consultancy in return for bribes including designer watches, sex with prostitutes and foreign holidays.

A review by a retired judge into the bank’s compensation scheme, which totalled 102 million pounds ($133 million), found it showed an ‘unacceptable denial of responsibility’ for victims’ suffering and likely paid some too little.

Lloyds said it would re-assess victims’ claims and this week offered the special payments due to the additional delay, a Lloyds spokesman said.

A spokesman for campaign group the SME Alliance confirmed the offer, which totals 6.685 million pounds.

Antonio Horta-Osorio, the chief executive of Lloyds, has also met with some victims.

“A common concern expressed by customers, as well other stakeholders, during recent meetings has been that a re-review will take time and this creates further delays and distress for them. We have listened to these concerns and are very sorry for this,” the Lloyds spokesman said.

The special payments offer was earlier reported by the Financial Times.

Reporting by Iain Withers; Editing by Alexander Smith