Lloyds Banking Group to shed 15,000 jobs in major shake-up

Jun 30, 2011, 15:11 GMT

London - Britain's part-nationalized Lloyds Banking Group is to curtail foreign operations and cut 15,000 jobs over the next three years in a drastic streamlining programme aimed at annual savings of of 1.5 billion pounds (2.4 billion dollars).

The job cuts and shrinkage, among the biggest in British banking history, were announced by Antonio Horta-Osorio, the new chief executive of Lloyds, as part of a strategic review.

Lloyds plans to close offices in around half of the 30 countries in which it currently operates and will become a 'much more UK-focused bank,' the announcement said.

The redundancies, expected to hit middle management and bank offices, bring to more than 40,000 the number of job reductions announced by Lloyds since the 2008 credit crisis.

Lloyds, in which the state has a stake of 41 per cent, took over ailing bank HBOS at the height of the crisis, creating a superbank with more than 130,000 employees.

The emergency merger was forced through by the previous Labour government of Gordon Brown to prevent the collapse of HBOS, the Halifax Bank of Scotland.

Banking analysts said Thursday that the drastic restructuring programme carried out by Horta-Osorio, a high-profile Portuguese banker who became Lloyds chief executive in March, is a long-term result of the takeover.

Under a directive of the European Commission, the banking group was asked to sell off 600 branches following the merger, in order to comply with competition regulations.

Lloyds, Britain's biggest retail bank, said it returned to the black for the first time in 2010, when it reported a pre-tax profit of 2.2 billion pounds.

The banking group said that it hoped to make the majority of the cuts through 'natural attrition and redeployment,' as well as redundancies.

Horta-Osorio, a former head of Spanish bank's Santander operations in Britain, oversaw much of Santander's expansion in Britain, where it took over a string of former building societies and bought more than 300 branches of the Royal Bank of Scotland.

Lloyds said the restructuring is aimed at returning the group to profitability on a 'sustainable basis' and to 'revitalize' the Halifax brand.

Lloyd's shares jumped by 7 per cent on the news on the London stock market Thursday.