Lloyds faces cover-up claims over HBOS scandal

Pressure on Lloyds to resolve the fallout from the small-business lending fraud at its HBOS Reading branch grew today after reports that top brass covered up the scandal for nine years.

An internal report on the scandal suggests that executives decided to bury the issue as far back at 2008.

George Kerevan MP said today: “These leaked papers provide prima facie evidence that senior management in both HBOS and Lloyds knew from very early on that a fraud was taking place at the Reading unit that dealt with small business customers across the South-East. It is outrageous that the bank continued to hound those customers affected by the fraud for repayment.”

Kerevan added: “At the very least, Lloyds needs to make an ex gratia payment to those who suffered the fraud and whose lives and businesses were ruined.”

Six HBOS bankers were jailed. One of them, Lynden Scourfield, was described as a “corrupt and devious man” who “sold his soul for sex, luxury trips, bling and swag”.

Lloyds disputes the veracity of the internal report.