Lloyds Banking Group to cut 9,000 jobs

LONDON: Britain’s state-rescued Lloyds Banking Group announced that it intends to cut 9,000 jobs by the end of 2017 to reduce costs on its road to full recovery.

LBG, which passed European Union-wide bank stress tests at the weekend, is to shed about one-tenth of its workforce and shutting about 150 branches over the next three years, it said in a statement.

The bank said it had returned to profit in the third quarter, posting pre-tax earnings of £751mil (US$1.2bil) in the three months to the end of September compared with a loss of £440mil in the equivalent period one year earlier.

But it is setting aside £900mil to cover the costs of compensating clients who were mis-sold an insurance policy – a scandal which has rocked Britain’s banks and cost LBG more than £11.3bil including the latest provision.

The bank, which remains 25% owned by the British taxpayer, has meanwhile decided to cut its headcount by about one-tenth with the loss of 9,000 jobs.

This comes after it has already axed tens of thousands of employees since the 2008 financial crisis which triggered a multi-billion-pound state bailout of the lender.

“In order to make the group more efficient, we expect to exit 2017 with a cost:income ratio of around 45% and are targeting reductions in each year of the plan,” LBG said in a statement.

“We also anticipate a reduction of 9,000 full time roles by the end of 2017 and plan to make further simplification savings of £1bil per annum by the end of 2017.” – AFP