Lloyds Bank confirms 9,000 job losses and branch closures
Lloyds Banking Group has confirmed 9,000 job losses and the closure of 150 branches over the next three years. The latest job losses – representing about 10% of its workforce – come on top of 43,000 cuts made since 2008.
The group is also setting aside another £900m to cover possible payouts for the PPI mis-selling scandal to compensate customers mis-sold loan insurance.
That has cost Lloyds £11.3bn so far, including £2.5bn in administration costs, which is more than any other bank and close to half of the total bill for the industry.
Lloyds, which was the worst performing British bank in the European stress test, faces a further test by the Bank of England (BoE) in December which will measure its resilience against scenarios including a 35 percent decline in house prices and a rise in interest rates to 6 percent.
Lloyds Finance Director George Culmer said he expected Lloyds to pass the BoE stress test and remained confident the bank would be cleared to pay a “modest” dividend for 2014. “The discussions look at earnings, they look at capital and they look at stress tests. We consider ourselves to be in a good position with regards those three criteria as we go into those discussions,” he said.
Lloyds, which owns the Halifax and Bank of Scotland brands, reported pre-tax profits of £1.61bn for the nine months to 30 September.
“The group is performing strongly,” said chief executive Antonio Horta-Osorio.
“We have met or exceeded the strategic objectives set out in 2011 and are ready to move on to the next stage in our development.”
The bank says it will be closing 200 branches but opening 50 new ones, bringing the net closure figure to 150 – about 9% of its network of 2,250.
The closures and job cuts are due to customers switching towards mobile banking, the bank says.
As a result, Lloyds will be investing £1bn in digital technology over the next three years.
According to the banking trade body the BBA, digital banking transactions are now worth almost £1bn a day, with almost 40 million mobile and internet banking transactions every week.
The bank remains confident that it will be able to pay a dividend to shareholders in 2014, but it needs the permission of the Prudential Regulation Authority (PRA) before it can do so.
Finance director George Culmer said talks with the PRA were “in a good position”.