Lloyds Banking Group has today announced that it is going to axe 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 leave the European Union.
The part state-backed bank 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 per centto 0.25 per cent next week as the fallout from the Brexit vote intensifies.
Lloyds is targeting £1.4 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.
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,’ the bank said.
The total number of jobs cut since the announcement of an efficiency drive in 2014 will stand at 12,000 by the end of next year. The latest 200 branch closures come on top of another 200 already earmarked for closure at Lloyds, which is 9 per cent owned by the Government.
Chief executive Antonio Horta-Osorio said: ‘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.’
Rob MacGregor, national officer at union Unite, said: ‘There is a real danger that customer service will suffer and access to banking for numerous communities will be damaged because of this latest round of savage cuts. Over the coming days and weeks Unite will be in talks with Lloyds to understand the announcement in detail, pressing it for guarantees over compulsory redundancies and warning it against cutting too far too fast.
‘Lloyds should be in no doubt that Unite will oppose all compulsory redundancies and will be doing everything in its power to ensure that those employees who wish to continue working for the banking group do so.’
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