Lloyds Banking Group to make more cuts
Lloyds Banking Group, the leading provider of current accounts in the UK with over 30 million customers, has announced 325 forthcoming job cuts and 100 store closures over the next four months until October.
A further 300 store closures are expected by the end of the year, in a round of cost-cutting measures introduced by chief executive António Horta-Osório.
The share price however, has strengthened. This bullish take suggests the market likes the prospect of a slimmed down Lloyds. The news that the UK government has now completed the sale of it’s shares is another plus.
Banks See Customer Changes
Lloyds, who also own Bank of Scotland and Halifax, said the changes were a response to ‘changing customer behaviour and the reduced number of transactions being made in branches.’
The job cuts were mainly the result of branch closures. They were however, also seen in management, where a wide re-organisation process is taking place. They were keen to stress, however, that this process has also created 90 new jobs, in an attempt to offset the cutbacks.
Further Pressures On Lloyds Share Price
Labour Unions and the Federation of Small Business expressed their concern at the news in the media, and Mike Cherry of the FSB pointed out that broadband coverage is not always ubiquitous in rural areas of the country and these cuts could affect many people’s ability to bank conveniently.
Furthermore, he brought the debate into legal territory stating that “the onus is now on Lloyds to take steps to ensure access to banking is being protected under the terms of the access to banking protocol.”
Lloyds has seemingly already considered this however, commissioning a further nine vehicles for its ‘mobile banking’ fleet, bringing the total up to 20 by the end of the year.
These vans visit rural areas, and those affected by branch closures, on a weekly basis. They can now carry out a range of more complex banking operations. Rob MacGregor of Unite Trade Union however said that, no matter what measures put in place to counter it, “The loss of a further 100 local banks will be painful for high streets across the country to absorb.”
Trends In The UK Banking Sector
The news furthers an ongoing trend among the UK’s biggest high street banks. They have collectively closed over 1,700 branches in the past five years. Lloyds, however, still has the biggest high street presence of them all and should still be operating 1,200 branches, even after this round of closures.
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