Lloyds Banking Group PLC (LON:LLOY) may have to fork out more than £1bn to compensate victims of fraud at its HBOS Reading unit, according to TV star Noel Edmonds.
Edmonds, a former host of 'Deal or No Deal', is seeking £64mln in damages on claims his entertainment business, Unique Group, failed a result of a loans scam involving employees at HBOS in Reading.
Lloyds has set aside £100mln to compensate 64 victims of the scandal but Edmonds said the lender will have to pay out significantly more than that.
"I believe from the meetings that I had that the scale of legal claims (outside the Lloyds review) are over £1bn,” he told the Press Association.
Lloyds' compensation review
The amount Lloyds has set aside does not account for potential court settlements related to HBOS. This means Edmonds' legal claim would be paid out separately since he is not part of the compensation review.
Six people, including two former bankers at HBOS, were jailed last year for a total of 47 years over their role in the fraud, which took place in the early 2000s. They were accused of destroying several businesses and squandering the profits on high-end prostitutes and luxury holidays.
Lloyds has so far paid out £75mln to victims, according to letters released by the Treasury Select Committee.
READ: Lloyds offers compensation of £76mln to victims of HBOS Reading unit fraud, say lawmakers
Compensation has ranged from less than £100,000 to more than £5mln, depending on the amount of distress and inconvenience suffered by victims.
'Heads have got to roll', says Edmonds
Edmonds said he and his legal team will decide when to file court papers next week.
"Heads have got to roll, starting with Lord Blackwell, and also Antonio (Horta-Osorio) and the board," he added, calling out the Lloyds chairman and chief executive.
Lloyds said it had "made determined efforts to reach a consensual resolution with Edmonds through mediation late last year, but this was not possible".
The bank added that "it would be inappropriate to comment other than to say his claim will be contested".
The UK’s Financial Conduct Authority (FCA) is currently investigating HBOS and what its executives knew of the Reading fraud.