28 Oct 2014

Lloyds axe 9,000 jobs in bid to pay £11.3bn PPI bill

State-backed Lloyds Banking Group announces it is to cut around 10 per cent of its current work force and close 150 branches in an effort to simplify the business and be more efficient.

Lloyds Banking Group

The group, which is 25 per cent owned by the taxpayer, said it is to cut 9,000 jobs from its current workforce of 88,000. It has already slashed more than 30,000 since the start of the financial crisis.

Bottom line pre-tax profits were £693m after taking into account one-off charges including a £900m increase in provision for payment protection insurance (PPI) scandal.

It takes the running total of the sum set aside for PPI by Lloyds to £11.32bn.

Despite the the PPI bill, third-quarter results showed underlying profits for the business, which includes Halifax and Bank of Scotland, up 41 per cent to £2.2bn.

Chief executive Antonio Horta-Osorio told BBC Radio 5 Live Lloyds “has absolutely no intention” of ending free banking, ensuring that he would attempt to “minimise” compulsory redundancies through “redeployment and natural attrition”.

Our strategy has ensured that we have become a safe, highly efficient, UK-focused retail and commercial bank. Antonio Horta-Osorio

He added: “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.”

‘Uncertainty’

But the Unite union said that job losses announced by the Lloyds Banking group represent “deeply unsettling times” for staff.