Lloyds said to be paying very handsomely to attract people to its wholesale business

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Somewhat surprisingly for a bank that's firmly under the thumb of the Treasury, and where two thirds of bonuses are typically less than 1k, The Telegraph today accuses Lloyds of paying excessive and distortionary packages to attract people to its wholesale business.

The Telegraph fails to elaborate on the precise nature of these distortions and Lloyds didn't call us back for immediate comment.

However, it's notable that when Lloyds hired James Garvey, formerly of Goldman Sachs, last July, it reputedly offered him a package of 1m. Far from being overly generous, at the time this seemed strangely restrained compared to the 7m inducement allegedly offered to Antonio Polverino to join RBS.

Garvey's arrival was widely expected to herald a rash of recruitment for the Lloyds capital markets team, but all has been quiet on that front. Similarly, the arrival of Terry Murray from Bridgewell early last year was expected to lead to a spurt of equities recruitment, but all has been quiet there too.

"They don't seem to be doing much, if anything, in cash equities," says the equities headhunter who tipped us off about Murray's arrival. "I certainly haven't met anyone who's interviewed with them," says another.

The exception to the Lloyds hiring hush appears to be FX, where several headhunters assure us big things are going on and that Lloyds is indeed being generous with guarantees.

However, Peter Harwood at Principal Search, points out that this is nothing unusual. "All banks are paying a lot of money to hire in FX. The interest in Lloyds is purely because it's a government bailout bank and this creates an easy headline for the man on the street.

"Lloyds have grown their business at a sensible rate for the last couple of years," Harwood adds, in their defence.

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