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Lloyds wields axe after Brexit shock

Thursday, July 28, 2016 - 01:50

Three thousand jobs are to go and more branches are to close as Lloyds picks up the pace of its cost cutting. The reason, it says: Brexit-tainted economic uncertainty. Jo Webster reports.

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The shock of Brexit hitting the pockets of Britain's banks. Lloyds announcing plans to axe a further 3,000 jobs, and close 200 branches, in order to save 400 million pounds by the end of next year. But is Brexit entirely to blame? Reuters banking correspondent Lawrence White. SOUNDBITE (English) REUTERS BANKING CORRESPONDENT, LAWRENCE WHITE, SAYING: "Lloyds were already cutting jobs and branches because they say that customers are increasingly banking online .They just said they are accelerating the plan as a reflection of the economic outlook. The biggest concern for lloyds and the rest of banks is low interest rates which makes it harder for them to earn money when they lend it out to companies and customers. so the fact that we expect another rate but from the bank of england next week signals an even tougher environment for banks who make most of their money between what they pay savers and what they can lend out." Lloyds was rescued by British taxpayers during the financial crisis, and is the most exposed to any downturn in the economy. It HAD reported a strong pretax profit for the first half of this year. But the latest move suggests troubling times ahead. SOUNDBITE (English) REUTERS BANKING CORRESPONDENT, LAWRENCE WHITE, SAYING: "Lloyds are seen as a bit of a bellwether for banks and the broader economy. They are a very UK focused banks, they're one of the stronger ones, so the fact that they are cutting jobs and branches at an accelerated weight is a warning sign, I think, for banks and the broader economy. we could see further cost cutting from banks which are under great pressure to create revenue in a low interest rate environment, something which is very difficult for them. " Lloyds is the first major bank to report results since the referendum Amid this environment of uncertainty, investors will be keen to know how Barclays has fared. It reports Friday.

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Lloyds wields axe after Brexit shock

Thursday, July 28, 2016 - 01:50