3000 more jobs cut at Lloyds
(28 July 2016 – United Kingdom) Lloyds Banking Group has announced that it will cut a further 3,000 jobs and close 200 branches across the UK.
The bank said that it is bracing for a cut in interest rates following the UK’s decision to quit the European Union.
The fresh round of job cuts will increase the total number to 12,000 by the end of 2017. The latest 200 branch closures come on top of another 200 already earmarked for closure at Lloyds.
Lloyds, which is 9 percent owned by the Government, said a cost-cutting programme announced in 2014 will be extended and the ‘expected lower for longer interest rate environment’ will see the new cuts come into effect by the end of 2017.
The Bank of England is widely expected to cut interest rates from 0.5 percent to 0.25 percent in the near future, as impacts from the Brexit vote increase.
Lloyds is targeting £1.4 billion (A$2.4 billion) in cost savings by the end of next year. The bank made the announcement alongside results for the first half of the year, which saw statutory profits more than double to £2.5 billion, but the lender warned that Brexit could have an adverse impact on its future performance.
In its statement, the bank said: “Given the uncertainty, it is too early to determine the impact on our formal longer term guidance at this stage. However, while the business will remain highly capital generative, it is possible that this capital generation may be somewhat lower in future years than previously guided.”
Chief executive Antonio Horta-Osorio added: “Following the EU referendum the outlook for the UK economy is uncertain and, while the precise impact is dependent upon a number of factors including EU negotiations and political and economic events, a deceleration of growth seems likely.
“The UK, however, enters this period of uncertainty from a position of strength, following continued private sector deleveraging, significantly improved mortgage affordability and low levels of unemployment.”
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