Lloyds Banking Group is axing 9,000 jobs and closing 200 branches to save £1bn by 2017 as it “digitises” its business.
The bank announced its latest round of job cuts – which come on top of 45,000 posts already lost since the rescue of HBOS in 2008 – as it revealed it was taking a further £900m provision for misselling payment protection insurance. This takes its total bill so far to more than £11bn.
Outlining a new three-year strategy for the bank, which is 24%-owned by the UK taxpayer, chief executive António Horta-Osório said: “This is a highly competitive market and customers behaviour are changing. Increasingly our customers want to access ours serrvices in many different ways, via branches, via digital or via mobile.
“Regrettably”, he said, this would require 9,000 job cuts from the 85,000-strong workforce as the business was “digitised”.
“Over the next three years we intend to adapt to the changes in financial services brought about by technology, changing customer behaviour and increasing regulatory requirements at a time when traditional competitors’ strategies converge and new entrants compete for customers,” the bank said.
The 200 branch closures – 6% of its network – will largely affect its Lloyds and Bank of Scotland facias and not its Halifax branches. Lloyds stressed that 90% of customers will have a branch within five miles of their homes, signalling the end of its commitment to be “the last branch in town”.
The new hit for PPI misselling kept Lloyds profits flat at £1.6bn for the first nine months of the year.
The City is awaiting news of the bank’s ability to start paying dividends for the first time since the 2008 crisis. There have been concerns over its ability to resume payments to shareholders, particularly after Lloyds emerged as the weakest of the UK banks in the latest stress check of the banking industry announced on Sunday.
George Culmer, the finance director, said the bank still hoped to be able to pay a dividend for the financial year 2014 after discussions with the Bank of England. Threadneedle Street will publish the outcome of its own stress tests on 16 December and Culmer indicated that he expected Lloyds to pass them.
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