Lloyds to cut 3,000 more staff as online focus grows

LLOYDS Banking Group is chopping another 3,000 jobs and closing a further 200 branches in an attempt to save money and meet customers’ increasing enthusiasm for online banking.

Those cuts come on top of 9,000 job losses and 200 branch closures that were announced two years ago. Combined with the sale of 40 office buildings around the country, the bank expects the plan will cut its annual costs by £400m – savings that could be particularly important if the economy slows down in the wake of the UK’s vote to leave the EU, as chief executive Antonio Horta-Osorio expects.

However, the bank stressed that the decision to close the branches was taken before the referendum result, as the number of transactions carried out in branches has fallen by another 15pc compared with last year.

The bank has already seen business investment slow down, with firms of all sizes putting big projects on hold, he said yesterday. Households and individual consumers, however, remain confident, with spending levels unaffected by the vote, and mortgage applications taking no discernible hit.

“Following the EU referendum the outlook for the UK economy is uncertain and… a deceleration of growth seems likely,” said Mr Horta-Osorio. “The UK enters this slowdown from a position of strength due to the sustainable nature of the economic recovery in recent years, where the UK has been growing at about 2pc with reducing levels of debt.”

That was reflected by Lloyds’ financial results: its pre-tax profit for the first half of the year more than doubled to £2.5bn. Its operating costs fell by 3pc while it increased consumer finance lending by 11pc and small business lending by 4pc.

Lloyds hiked its interim dividend from 0.75p a year ago to 0.85p – but disappointed investors who had been hoping for a 1p payout. It also reported an extra £460m of misconduct costs. Of that, £215m relates to problems with the way the bank handled arrears which will result in some customers receiving fee refunds.

Another £70m comes from complaints on packaged accounts, while £50m relates to insurance products sold in Germany.

As a result the bank’s share price slid by 5.8pc to 52½p yesterday.