Scotland braced for impact of Lloyds job and branch cuts

Lloyds Banking Group is cutting 3,000 jobs and shutting 200 branches as the lender prepares for a fall in interest rates after Brexit.

The group said the impact will be felt across its activities which include Halifax, Bank of Scotland and Scottish Widows.

The locations of the jobs being cut or the branches being closed have not yet been decided. The part state-backed bank said a cost-cutting programme announced in 2014 will be extended.

The “expected lower for longer interest rate environment” will see the new cuts come into effect by the end of 2017.

The Bank of England is widely expected to cut interest rates from 0.5% to 0.25% next week as the fallout from the Brexit vote intensifies.

Lloyds is targeting £1.4 billion in cost savings by the end of next year.

In the first half of the year, Lloyds’ statutory profits more than doubled to £2.5bn, but the lender warned that Brexit could have an adverse impact on its future performance.

“Given the uncertainty, it is too early to determine the impact on our formal longer term guidance at this stage,” it stated.

“While the business will remain highly capital generative, it is possible that this capital generation may be somewhat lower in future years than previously guided.”

The total number of jobs cut since the announcement of an efficiency drive in 2014 will stand at 12,000 by the end of next year. The latest 200 branch closures come on top of another 200 earmarked for closure at the bank.

Chief executive Antonio HortaOsorio said following the EU referendum the outlook for the UK economy is uncertain and a deceleration of growth seems likely.