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Lloyds Banking Group to axe more than 1,000 jobs

Tom Belger
·Finance and policy reporter
·3-min read
People walking past Lloyds Bank in London's West End. Photo: Dinendra Haria/SOPA Images/Sipa USA
People walking past Lloyds Bank in London's West End. Photo: Dinendra Haria/SOPA Images/Sipa USA

Lloyds Banking Group (LLOY.L) has announced plans to cut more than 1,000 jobs, becoming the latest major UK company to wield the axe in the wake of the coronavirus crisis.

The group, which owns Halifax, Bank of Scotland and Scottish Widows, said decisions over a restructuring drive had been “difficult” on Wednesday.

But the move would result in 330 new jobs, leaving a net loss of around 730 roles. It comes after Lloyds announced in September it would resume cost-cutting measures previously paused amid the pandemic. 865 job cuts from its insurance, wealth, and retail teams were confirmed at the time.

A spokeswoman said: “This morning we shared changes to some of our teams and we can confirm a net reduction of around 730 roles.

“These changes reflect our ongoing plans to continue to meet our customers’ changing needs and make parts of our business simpler. The majority of colleagues briefed today will not leave until January at the earliest.

Watch: What is the Job Support Scheme and how has it changed?

READ MORE: HSBC axes 6,000 jobs so far this year as cost cutting accelerates

“We will help colleagues who are affected find new roles and redeployment opportunities wherever possible, and everyone will be given access to a package of training and support designed to help them secure their next position, whether within or outside of our business.”

The news comes less than a week after the banking giant revealed it had returned to profit, recovering from an unexpected loss in the first half of the year.

Last Thursday said it made a pre-tax profit of £1bn ($1.3bn) in the third quarter on income of £3.4bn. Analysts had forecast a profit of £588m on income of £3.3bn.

The results marked a return to the black for Lloyds after an unexpected first-half loss. Lloyds was pushed into the red by larger-than-expected loss provisions to cover loans going bad due to the COVID-19 pandemic.

The bank set aside another £301m in the third quarter to cover bad loans, but this was significantly below the charge taken in the second quarter and below analysts’ forecasts. It takes the total provisions built up by the bank so far this year to £4.1bn.

Lloyds said loss provisions for the full-year were now likely to be “at the low end” of the £4.5bn to £5.5bn range provided earlier this year.

Lloyds joined rivals Barclays (BARC.L) and HSBC (HSBA.L) in announcing forecasting-beating third quarter numbers. While rivals were boosted by their markets and investment banking businesses, the more domestically-focused Lloyds benefited from a boom in the UK property market.

Mortgage lending rose by £3.5bn, with highest level of first time buyer and home mover activity since 2008.

READ MORE: HSBC plans 'conservative' dividend after better-than-expected quarter

“Most people spend much more time at home so they also want to live in bigger homes, preferably outside cities, and they have been moving up as well,” Horta-Osório said.

In June, Lloyds said it expected house prices to fall for at least the next 12 months. It scrapped that forecast on Thursday, saying prices were likely to continue growing until the middle of next year before dipping this time next year.

Alongside a better outlook for house prices, Lloyds also trimmed its short-term forecasts for unemployment. Chief financial officer William Chalmers said the improved forecasts were “more about shunting the expected downturn from the end of 2020 to the beginning of 2021,” rather than avoiding economic pain.

The bank has lent £11bn to over 285,000 businesses under government COVID support schemes and provided 1.2m payment holidays to customers. Lloyds said over 80% of customers who took a payment holiday were now repaying.

Lloyds has been approached for comment.

READ MORE: Santander sets aside another €2.5bn to cover potential losses

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