Lloyds Banking Group, owner of HBOS, said it will review the cases of hundreds of its customers who were scammed in a £245m fraud, involving two former employees.

On Monday, MPs had put pressure on Lloyds to pay compensation for the damage caused. The bank had maintained that it was actually a victim in the case.

“The group deeply regrets that the criminal actions have caused such distress for a number of HBOS business customers,” Lloyds said in a statement on Tuesday.

"Customer cases will be considered afresh in light of all relevant evidence including new evidence that emerged during the trial.”

The bank said that it was important that it “did not do or say anything that could subsequently prejudice the trial.

It also said that it would now “proactively” contact affected customers and provide redress if appropriate, but that it advised anyone who thought they had a valid case for compensation to contact the bank.

The eventual cost of the fraud could be up to £1bn, the BBC reported, citing sources close to the investigation.

At the centre of the scam was former HBOS manager Lynden Scourfield, sentenced last Thursday to 11 years and three months in prison. When handing out the sentence, Judge Martin Beddoe described Mr Scourfield as an “utterly corrupt bank manager” driven by “rapacious greed”.

Mr Scourfield pressured business customers into using a turnaround consultancy run by his friends David Mills and Michael Bancroft.

The men then fleeced businesses with high fees, saddled them with excessive debt and stripped them of assets, driving many into bankruptcy.

In return for his services, Mr Mills and Mr Bancroft arranged sex parties for Mr Scourfield and showered him with exotic foreign holidays and cash bribes.

Also convicted for their roles in the scam were Mark Dobson, 56, another former HBOS manager, David Mills’ wife, Alison, 51, and accomplice John Cartwright, 72.

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Writing to Lloyd’s on Monday, MPs said: “We are at a point where, once again, there are a large group of aggrieved business people who have lost their livelihoods.

“Critically, many have endured years of financial duress and personal stress.”