Lloyds bank to cut jobs and branches over Brexit concerns

The announcement that the banking group is to cut 3,000 jobs and close 200 branches was seized upon by papers this morning as evidence that agents of “project fear” were correct, despite the United Kingdom economy remaining buoyant.

‘This announcement is very bad news for workers and their families, and more widely it is a further body blow to the United Kingdom economy.

And will your local branch be affected?

A surge in online and mobile banking technology has made regular visits to branches unnecessary for many consumers.

The banking group is shutting around 200 of its branches across the United Kingdom, it announced today.

Generating the lion’s share of banking turnover, Lloyds is going to find further rate cuts in the aftermath of Brexit hard to offset.

Lloyds has not disclosed which branches are earmarked for closure in the latest cull.

So far the programme has delivered £642m of annual run-rate savings to achieve its £1bn target by the end of 2017.

Will my local branch be affected?

A spokesman for Lloyds confirmed to Heat Street that the plans, announced in the bank’s bi-annual results, had been decided long before the vote.

“Job losses are never positive news, but the announcement from Lloyds is part of an ongoing shift in bank customer behaviour”, says Laith Khalaf, Senior Analyst at Hargreaves Lansdown. Although the policy decision is expected to be influenced by data and is believed to provide a boost to the economy in the post-Brexit era, banks will feel the downward pressure.

Unite national officer Rob MacGregor said the “grim news. will send a shiver down the spine of Lloyds employees”.

Despite raking in a 101% increase in pre-tax profits, the banking group is closing down more than 200 branches by the end of next year.

“Given the uncertainty, it is too early to determine the impact on our formal longer term guidance at this stage”, the bank said in a statement.

But the uncertainty itself will have a hit, it said.

Warning that Britain’s exit from the European Union could restrict capital generation, cost-cutting will shield Lloyds from what chief executive António Horta-Osório calls a likely “deceleration of growth”.

Natwest shut down in the town in September 2015, followed by HSBC three months later – leaving only the Lloyds branch in Market Place to serve the town’s domestic and business customers.

But the giant is significantly shifting the goalposts on what it wants to save.

How much are profits up?

The job cuts announcement came as Lloyds reported first-half profits more than doubled to £2.5 billion, largely as a result of lower misconduct costs, which dropped to £460 million from £1.83 billion previous year, though total income was one per cent lower at £8.9 billion.