A couple of weeks ago, the latest shock horror story to hit the front pages related to plans by Lloyds Bank to pay its staff bonuses. How very dare they, said the press.

Some of the more thoughtful media pointed out that most of the bonuses were paid to staff on low wages – that they worked out at an average of £1,000 per member of staff, many of whom were earning around £17,000 per year. Hardly the stuff of excess.

It was argued here that it was a non story, and that by so vilifying a bonus, which on closer examination seemed actually quite modest, some media had demonstrated once and for all that they don’t care about truth or balance. Instead, they seemed to do little more than reinforce every overreaction, in turn compounding the crisis we are living through.

But not all agreed. Some argued that it was irrelevant how small the bonus was, that if a company does badly then bonuses should not be paid.

Well now we know a little bit more. The first ever set of results from Lloyds Banking Group are out, and actually the Lloyds TSB bit was quite good.

Overall, the company made a loss of £10bn, the second-largest from a British company during this crisis, topped only by the RBS figures released yesterday, so hardly the stuff of celebration.

But then, drill in a bit, and you find a different picture emerges. HBOS lost £10.8bn. So pens out please, the exam begins. If a company makes a loss of £10bn, and one part of the company lost £10.8bn, what does that mean the rest of the company made?

In fact, Lloyds made a profit of £807m. Now that is 80 per cent down on last year, but actually, making a profit in times likes these is no mean achievement.

The bank’s boss Eric Daniels said: “In the context of the environment and when many organisations will be reporting losses, I do feel this is a reasonable out-turn.”

Well, he is right.

The problem of course was the decision to swoop in on HBOS. That is why the bank has had to go cap in hand to the government, and that is why the state now has a 43 per cent stake in the company. In hindsight, Lloyds should have stayed clear of HBOS. And yet, if it had done that, HBOS may have fallen, and the finance crisis may have become more serious.

Mr Daniels said: “This transaction allows us immediately to gain scale in a consolidating market, and it profoundly changes the long-term trajectory for the group.”

You can look at this in one of two ways. Lloyds was a sacrifice. By merging with HBOS it made a major contribution to saving the UK economy from plunging into even worse depths, and as such it is unfair to penalise bank tellers earning below average wages.

Alternatively, you can say Eric Daniels made the mistake. He should have stayed clear of HBOS. But in any case, the argument above still stands, it is still morally unfair to penalize staff in branches because the boss made an error that was unconnected with their own endeavours.

What conclusion can we draw?

Well, the media were wrong to make such an issue of Lloyds’ quite modest bonus plans.

It has been argued here that the single biggest danger now is in overreaction. We need to take a helicopter view, and start seeing things in perspective. And the record so far is not good.

© Investment & Business News 2013