Lloyds Banking Group has announced plans to cut 1,230 jobs and shut 49 branches in the first move by the UK lender to implement a three-year strategic plan unveiled in February to cut costs and improve its digital services.
Britain’s biggest bank by share of current accounts said it planned to create 925 new roles as part of a £3bn investment plan to adapt to the shift by a growing number of customers to do more of their banking digitally.
The latest restructuring — following the announcement of 930 job cuts in February — underlines how Lloyds is maintaining the pace of its cost-cutting efforts in response to changing customer behaviour and rising competition from upstart financial technology firms.
Since taking charge of Lloyds at the depths of a crisis at the bank in 2011, António Horta-Osório has established a reputation as a formidable cost-cutter, shrinking its workforce from over 100,000 to 74,000 and shutting almost a third of branches.
The latest closures will cut its UK branch network to 1,750 outlets. Mr Horta-Osório has committed to maintaining the largest branch network in the UK, in line with its market share of 21 per cent.
The bank also said on Tuesday that it would add seven more mobile banking units, taking the total to 36. Those units serve remote parts of the country by visiting them at regular times each week.
“The group’s policy is always to use natural turnover and to redeploy people wherever possible to retain their expertise and knowledge within the group,” Lloyds said in a statement, adding that 90 per cent of the 30,000 job cuts it has implemented since 2011 have been achieved without compulsory redundancies.
The bank said it was planning to increase its training programme to a total of 4.4m hours a year to shift more staff into customer-facing and digitally focused roles.
“Where it is necessary for employees to leave the company, we will look to achieve this by offering voluntary redundancy,” it said. “Today’s announcement involves making difficult decisions, and we are committed to working through these changes in a careful and sensitive way.” On average, about 4,500 people leave Lloyds every year through “natural attrition”.
In the strategic plan Lloyds announced in February, it set a target to cut its cost-to-income ratio from 46.8 per cent at the end of last year — already one of the lowest in the sector — to the “low 40s” by the end of 2020.