Lloyds announces post-Brexit job cuts and branch closures

The international banking giant will cut 3,000 roles and double its planned branch closures in the wake of the UK’s vote to leave the EU

 
Lloyds has been pushing to cut costs to improve its balance sheet
Lloyds has been pushing to cut costs to improve its balance sheet 
Author: Matt Timms
July 28, 2016

The cuts will eliminate a further £400m of annual expenses, as the UK’s largest mortgage lender attempts to postpone an earnings slump influenced by the referendum vote. Lloyds announced the cuts in spite of its 101 percent increase in pre-tax profits. The group reported a £2.5bn pre-tax profit for the half year to the end of June, while in the same period last year it made £1.2bn.

CEO Antonio Horta-Osorio plans to boost earnings, according to Bloomberg. “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”, Horta-Osorio said in its earnings statement.

The cuts are in addition to the company’s plan announced in 2014 to trim £1bn of annual expenses and cut 9,000 employees by 2017

The cuts are in addition to the company’s plan announced in 2014 to trim £1bn of annual expenses and cut 9,000 employees by 2017. The FTSE 100-listed lender has already cut an estimated 7,300 employees under that plan so far, but said in February it wouldn’t reach its cost-to-income ratio goal of 45 percent until 2019, due to low interest rates.

Lloyds had 74,117 employees at the end of June this year, down 1,200 from the end of last year. The plan announced today also includes closing about 200 more branches and cutting the company’s non-branch property holdings by about 30 percent by the end of 2018. The lender, which is nine percent owned by the UK Government, confirmed guidance for the full year and declared an interim dividend of £0.85 per share, 13 percent higher year-on-year according to The International Business Times.

Following the EU vote, Lloyds has fallen more than 20 percent in London trading this year. Uncertainty over Europe and the appointment of a new chancellor has provoked doubt over the government’s plans to sell its remaining 9.1 percent stake in Lloyds by the end of March.