Britain’s largest retail bank, Lloyds, is planning to slash thousands more jobs and close 200 more branches to make savings as it anticipates interest rates will reduce.
Despite reporting healthy profits of £2.5bn in the six months to June, more than double the figure achieved for the previous year, CEO Antonio Horta-Osorio has advised that he is expecting growth to slow.
“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,” he said.
The announcement comes as the Bank of England is likely to announce a further drop in interest rates from 0.5{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} to 0.25{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} next week, which is likely to have an impact on need for credit.
The group plans to save a further £400m, increasing cost cuts to £1.4bn by the end of next year as part of its commitment to improve efficiency.
Lloyds has already discarded 9,000 jobs since 2014. The new cuts will bring the figure to 12,000 by the end of 2017, whilst the latest 200 branch closures come on top of another 200 already earmarked for closure at the bank.
The group stated these reductions are in response to changing customer behaviour and fewer people accessing the bank’s branches.
Shares at the bank dropped 3.6{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} to 53.55p in early trading.
Roy MacGregor, national officer at Unite union, said this will have an impact on customers.
He 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 received a £20.5bn bail-out from the taxpayer during the financial crisis and the government still has a 9{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} stake in the bank.
Source: Sky News