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How can Lloyds bank announce plans for a £120 million bonus program?

Rather perversely, as we see the ongoing demise of Lloyds bank it has been revealed that the company is in talks with the Treasury regarding a £120 million bonus program for its employees. This has come from a company that is literally on the brink of being bailed out by the UK government, because of its ever weakening financial position. So how can the company expect UK taxpayers to fund a £120 million bonus program?

As we have seen in the financial press over the last few days, it would seem that many banking employees in the UK have bonus structures embedded into their contracts. However, this has not stopped the fury of taxpayers in UK investors who have seen the value of their investments implode and cannot quite understand how a company which some claim to be near "bankruptcy" can afford to pay out such vast sums of money.

Despite the ongoing suggestion that contracts have been signed which guarantee bonuses, nobody has yet seen these contracts and any conditions which are attached. In the real world, a company which was making no money and literally on the verge of bankruptcy would not be in a position to pay bonuses of £120 million let alone even consider such a move. Quite what is different about the UK banking sector when compared to the rest of the UK business arena is very much a mystery to many.

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