Lloyds Banking Group will signal thousands more job cuts this week as part of a drive to save an extra £1bn a year in costs.
It has been reported that as many as 15,000 posts could go under the plan, which will be unveiled by new chief executive Antonio Horta-Osorio on Thursday.
The latest blow to staff at the group, which is 41% owned by the taxpayer, adds to the estimated 27,500 jobs that have been lost since the group’s creation from a controversial merger between Lloyds TSB and HBOS in early 2009.
The savings – on top of the £2 billion a year already being achieved following the HBOS takeover – are likely to focus on stripping away layers of management and lead to hundreds of job losses at its London head office.
Mr Horta-Osorio, the Portuguese-born banker who took the top post in March after being poached from rival Santander, is expected to prune the bank’s overseas interests but will pledge to revive the Halifax brand and keep the Scottish Widows insurance arm, the Sunday Times reported today.
He will also reveal that Lloyds is on course for an early exit from the Bank of England’s special liquidity scheme, which was set up in 2008 as a lifeline for banks battling to raise finance during the credit crunch.
The loans must be repaid by January, when the Bank of England intends to close the scheme.
Investors will also be looking for guidance on whether the group intends to restart paying dividends next year once a European ban on payouts to shareholders is lifted.
The European Commission also ordered the bank to sell 632 branches as a condition of state aid, but the UK’s independent commission on banking has indicated it wants to see this figure extended.
Mr Horta-Osorio is pressing for indicative bids for the branches by July in a move to pre-empt the commission’s final report in September.
Lloyds Banking Group has cut 27,500 jobs since it was formed less than three years ago.
Antonio Horta-Osorio, Lloyds’ new chief executive, is expected to announce the need for another 15,000 job cuts when he unveils his strategic review for the group on Thursday.
The part-nationalised lender, formed in January 2009 from the merger of HBOS and Lloyds TSB, has cut jobs across the business – from motor finance to insurance and from IT to wholesale banking, as well as closing a number of call centres.
Dave Fleming, Unite national officer for the finance sector, said: “These are yet more extremely anxious days for the Lloyds workforce.
“Unite will be seriously concerned if the purpose of the strategic review is to make Lloyds even leaner ahead of any possible sell-off of the state’s stake in the bank.
“Already, more than 27,000 jobs have been shed from Lloyds since the bank’s formation. It is very difficult to understand where this business believes it can lose more people and stay a viable high street operation.”
Here is a breakdown of some of the announcements made by Lloyds concerning the reduction of staff numbers since January 2009:
:: APRIL 2009 – 985 job cuts announced from its motor finance business at Liverpool, in Merseyside, and Chester, in Cheshire.
:: MAY 2009 – 625 job cuts announced following changes to its wholesale banking division in London and Edinburgh. The group unveiled plans for commercial banking operations to be brought into one business, while a single acquisition finance business was created under the existing Lloyds TSB Corporate Markets brand.
:: JUNE 2009 – 2,100 job cuts announced from commercial and group operations across the UK. The group announced plans to combine operational functions including payment and business services and banking, while the wholesale division brought together its Lloyds TSB and Bank of Scotland businesses in England and Wales.
:: JULY 2009 – 1,200 jobs cuts announced following moves to combine former HBOS and Lloyds TSB group operation functions, including IT and collections. Lloyds brought together support functions for the life, pensions and investment businesses which will impact divisions such as marketing, finance and sales operations. Staff in Edinburgh, Southend and Halifax were affected, while insurance division cuts were made largely across Edinburgh, Bristol and Leeds.
:: NOVEMBER 2009 – 700 job cuts announced at group offices in Aylesbury, Buckinghamshire. About 570 Lloyds staff working on pensions and investments were affected as well as 240 workers at Equitable Life whose contract with the bank will end in March 2011. The work was transferred to Indian firm HCL.
:: OCTOBER 2010 – 4,500 job cuts announced as the group restructured its IT services across the UK and overseas. Some 1,600 permanent roles were affected across the UK, 1,150 temporary and contract staff were “released” and a further 1,750 offshore contractor jobs were cut.
:: MARCH 2011 – 570 job cuts announced across the group’s wholesale, retail, insurance and human resources divisions, affecting Chester, Scotland, Halifax, London and Manchester.