Lloyds Said to Cut 9,000 Jobs Amid Online Banking Shift

By Stephen Morris  

Photographer: Jason Alden/Bloomberg

Lloyds Banking Group Plc Chief Executive Officer Antonio Horta-Osorio, 50, has been... Read More

Lloyds Banking Group Plc (LLOY), Britain’s largest mortgage provider, will announce about 9,000 job cuts next week as its customers increasingly shift to online services from branches, a person with knowledge of the matter said.
The bank will detail the cuts, a target for branch closures and the increasing automation of its services as part of a new three-year plan on Oct. 28, when it releases third-quarter results, said the person, who asked not to be identified because the strategy hasn’t been finalized.
Chief Executive Officer Antonio Horta-Osorio, 50, has been seeking ways to bolster earnings to help return Lloyds to full private ownership and resume dividends. The bank, which has about 88,000 full-time employees, has eliminated more than 37,000 jobs since its
government bailout in 2008, with the latest plans shaping up as the biggest round of cuts since at least 2011, according to data compiled by Bloomberg.
“Banks are wrestling with their distribution mix -- it’s clear that their branch network will be much smaller,” said Mike Trippitt, an analyst at Numis Securities Ltd. with a buy rating on shares. “Cutting branches and employees is a struggle, a balancing act for government-owned banks.”
The shares rose 0.2 percent to 76.04 pence at 10:53 a.m. in London. They have decreased 3.6 percent this year.

‘Reprehensible Way’

Branch transactions are falling 10 percent a year, according to the British Bankers’ Association. At that rate, Britain’s six largest banks may have to trim the country’s 8,000-strong branch network by as much as 75 percent in the next decade, Deutsche Bank AG has estimated.
Lloyds is set to eliminate positions in activities including processing mortgages and opening accounts as part of its revamp, a person familiar said earlier this month. Call-center staff may also face job cuts as customers increasingly use Internet and mobile applications to communicate with the bank.
“If this story is correct, it will create further anxiety for a workforce that has been reduced by around 40 percent already in a little over five years,” said Ged Nichols, general secretary of the Accord labor union. “The bank is supposed to be trying to rebuild trust and confidence with its customers and employees. This isn’t the way to do it.”
The bank carved out 631 branches when it sold shares in TSB Banking Group Plc (TSB) in June. London-based Lloyds, which is 25 percent owned by the government, still has more than 2,000 branches throughout the U.K., according to its website.
Royal Bank of Scotland Group Plc, which was also rescued by taxpayers in the financial crisis, leads job cuts among Britain’s five biggest lenders, eliminating some 67,600 positions since the turmoil hit the industry, data compiled by Bloomberg shows. Barclays Plc (BARC) has eliminated about 63,000 jobs.
Sky News reported the plans yesterday. Andrew Swailes, a London-based spokesman for the lender, declined to comment.