Lloyds boss defends £1.7m bonus

The bank reported in its annual results that is has increased its overall pool of bonuses for all staff to £395m, up from £365m the previous year.

Lloyds Bank also reported a pre-tax profit, of £415m, for the first time since its £20.5bn bailout, having made a loss of of £606m in 2012.

Mr Horta-Osorio told the BBC:

"I strongly believe you should link compensation with performance, and having increased our underlying profits by 140%, we thought it was appropriate to increase the bonus pool of the bank by 8%."

"I have also agreed to have additional conditions to my bonus... which is fully paid in shares, which aligns my interests with the interests of the taxpayer, so if the strategy we are pursuing proves itself wrong, that money can be clawed back."