Lloyds axes 3,000 more jobs and warns of Brexit effect on economy

LLOYDS Bank is to slash another 3,000 jobs and close 200 more branches as its boss warned of a “likely” economic slowdown following the Brexit vote.

Antonio Horta-Osorio, the bank’s chief executive, said: “The outcome of the referendum has created uncertainty and a deceleration of growth seems likely.” However, he added that Britain had entered a period of turbu- lence “from a position of strength”. His words were seized on by union leaders as the latest evidence of the damaging economic fallout from last month’s Leave vote.

Frances O’Grady, general secretary of the TUC, said: “The Government needs to act now to secure jobs and investment before thousands of working people pay the price of Brexit with the loss of their jobs. The Government must assure businesses that, where the Brexit vote is leading to urgent challenges that put jobs at risk, they will step in to help.”

The announcement by Lloyds means it is increasing planned job cuts by the end of 2017 to 12,000 and doubling branch closures from 200 to 400.

It said this was not a direct result of the Brexit vote, but a reaction to the speed at which its customers were switching to digital banking.

Mr Horta-Osorio said: “Branch visits have been declining by some eight per cent a year. Recently, that has accelerated to 15 per cent… Sixty per cent of our customers’ needs are now being met digitally.”

Lloyds, which is still nine per cent owned by the taxpayer following its £20 billion bailout in 2008, said underlying profits fell by five per cent in the first half of the year to £4.2 billion. Earnings have been hit by low interest rates and will not be helped by an expected cut in the Bank of England base rate next month to 0.25 per cent.

Mr Horta-Osorio said the bank had already seen a slowdown among corporate customers before the referendum, but no change in behaviour by retail customers since the vote.

He said: “We are continuing to see a halt or delay in investment decisions across the small and medium-sized enterprise sector, mid-market companies and large corporates. But the retail market has seen no change in behaviour, with credit card spending, transactions and mortgage applications all at pre-referendum levels.”

Unions accused Lloyds of cutting “too far too fast” and Ged Nichols, general secretary of the Accord financial services union, said: “Employees in the Lloyds Banking Group are still reeling from recent job losses. They will be bewildered by today’s news and wonder what has happened that is so catastrophic that these further job cuts and branch closures are necessary.”