Update: Lloyds announces clawback of bonuses for 13 senior staff

Lloyds Banking Group (LLOY) has confirmed that it will clawback bonus payments for 13 senior staff including five executive directors.

The move will see partial reclamation of 2010 awards including 40% of the amount paied to former chief executive Eric Daniels, 25% of the awards in respect of four other directors and 5% of the awards in respect of all members of the group executive committee and others.

The bank said its decision is "based on the fact that had the outcome of the Judicial Review into payment protection insurance (PPI) in April 2011 been known, and had the consequential provision made been effected at the time of the award of the 2010 bonus in February 2011, the bonus pool would have been lower and individual bonus awards would also have been lower."

It confirmed that the bonus pool for 2011 will reflect a further reduction in respect of the provision.

"The board wishes to emphasise that its decision is based entirely on the principle of “accountability” and in no way on culpability or wrong-doing by the individuals concerned," its statement read.

This is the first time a British bank has clawed back bonuses from executives, following a financial performance that was worse than expected.

Lloyds has set aside £3.2 billion to cover compensation for those customers who were mis-sold PPI.

The news comes ahead of the bank’s results - due on Friday – which are forecast to include a loss of £3.5 billion.

Looking for an overview of the sector? Peter Temple runs the rule over financial institutions in: Analysing... Banks.