No one was expecting a big bonus at Lloyds anyway

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Before September last year, working in the markets division of Lloyds TSB seemed quite a good bet. Lloyds not only offered the stability of a retail deposit base, it was also growing while most other banks were shrinking fast.

In 2008 it hired numerous senior bankers. They included Chris Babington, JPMorgan's former head of Northern European debt capital markets origination in London, Robin Stoole, JPMorgan's former head of European corporate bond syndicate, plus 35 derivatives staff across credit, rates and equities according to one senior insider.

Now those hires are uncomfortably positioned at the eye of the public storm about bonuses.

Revelations that Lloyds is planning to pay out 120m, some of which might even be guaranteed, have prompted David Cameron to suggest that the government renegue on the contracts and fight its decision in court.

Markets staff at HBOS and Lloyds seem relatively sanguine at the prospect of bonuses being stripped from them. "Everyone's working on the assumption that bonuses are going to be zero, irrespective of performance," says one senior director.

He adds: "The pay culture is very different here anyway - it's always been unusual to get more than 100% of your salary in bonus."

While bonuses at Lloyds and HBOS will inevitably be microscopic, the same may not be true of Insight Investments, the HBOS owned asset manager which has so far steered clear of the limelight, apparently by virtue of having a completely different name.

Last week, Insight hired a former senior Lehman banker as its head of European business development. This followed various hires towards the end of last year and the recruitment of a Michael Pinggera from Credit Suisse to head its alternatives team in January.

"Insight has totally different compensation arrangements to HBOS and Lloyds," says one headhunter who works for them. "They are completely unaffected by this."

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