LONDON—Lloyds Banking Group has been hit by more than 300 million pounds ($348 million) of suspected fraud linked to COVID-19 pandemic-era recovery loans for small businesses, the highest among big bank peers, according to government data.
British banks overall have classified some 1.1 billion pounds worth of the emergency lending scheme known as “bounce back” loans as fraud, the data published on Monday by Britain’s Department for Business, Energy and Industry (BEIS) showed.
Lloyds is the worst hit among big banks by net amount, and also saw a higher ratio of likely fraud with some 3.6 percent of its 8.5 billion pounds of bounce back loans categorized as under suspicion, according to a Reuters calculation from the data.
That compared with 2.4 percent for Barclays’ 10.8 billion pounds lending under the scheme, 1.7 percent for NatWest’s 8.9 billion and 1.3 percent for HSBC’s 7.3 billion.
A Lloyds spokesperson said its rate of suspected fraud was lower than the 7.5 percent average estimated by the scheme’s administrator the British Business Bank.
“Where fraud has been identified, we have acted promptly and have already recovered the majority of these funds without calling on the guarantee and we will continue to attempt to do so even after a claim has been submitted,” the spokesperson added.
The other banks said the differing levels could partly reflect some lenders having more sophisticated fraud detection measures, as well as different thresholds for…
