Lloyds Banking Group today confirmed that it is to cut 9000 jobs over the next three years as part of a £1 billion cost-saving plan which will also see the closure of 150 branches.
The Edinburgh-headquartered group, which is 25 per cent owned by the taxpayer, said it planned to “digitise” the bank, simplify the business and be more efficient.
Meanwhile, third-quarter results showed underlying profits for the business, which includes Halifax and Bank of Scotland, up 41 per cent to £2.2 billion.
Lloyds also announced it was setting aside another £900 million in provision for payment protection insurance (PPI) scandal. It takes the running total of the sum set aside for PPI by Lloyds to £11.32 billion.
The job cuts represent around ten per cent of the banking group’s current workforce of 88,000. It has already slashed more than 30,000 since the start of the financial crisis.
Under the new strategy, Lloyds said its new focus would be on digital, with plans to “invest about £1 billion to deliver simple and efficient digital products and services for customers across our businesses.”
Chief executive Antonio Horta-Osorio said: “Over the last three years the successful delivery of our strategy has ensured that we have become a safe, highly efficient, UK-focused retail and commercial bank.
“The next phase of our strategy will use these strong foundations as a basis for meeting the rapidly-changing needs of our customers, and sets out how we will grow the business in a way that will deliver increasing and sustainable returns for our shareholders.”
The job losses come as more customers switch to online and mobile banking and opting to use machines even when they visit branches.
The branch closures will largely affect its Lloyds and Bank of Scotland outlets and not its Halifax branches. Lloyds said 90 per cent of customers will have a branch within five miles of their homes.
Shares in Lloyds opened 1.2 per cent lower this morning as it confirmed the job losses and closure plans.
Rob MacGregor, national officer of the Unite union, said: “These are deeply unsettling times for Lloyds staff, who, after days of speculation and leaks, face yet another round of job cuts and a future of uncertainty.
“Job cuts of approximately ten per cent could have unknown consequences on customer service and will put even more pressure on staff who have helped get the bank back on the right track.”
Earlier this year, Lloyds spun off the TSB bank as a separate business to appease European Union competition authorities.
Shares in Lloyds Banking Group fell 1.8 per cent yesterday after the European Banking Authority revealed the bank had only narrowly passed its “stress” test.