Lloyds to cut 3,000 jobs after Brexit shock

Lloyds Banking Group said on Thursday it would step up its cost cutting plans to help to offset a more testing economic environment caused by Britain’s vote to quit the European Union.

Britain’s largest retail bank aims to save £ 400 million ($528.56 million) by end-2017 by axing a further 3,000 jobs and closing an additional 200 branches to protect its earnings and dividends against the effects of lower-for-longer interest rates.

Lloyds, rescued in a £20.5 billion taxpayer bail-out during the financial crisis, is the first major British bank to report results since the referendum and is the most exposed to any downturn in the British economy.

Chief Executive Officer Antonio Horta-Osūrio is searching for ways to prop up Lloyds’ dividend, one of its key attractions, and sustain profit growth in its main UK consumer and commercial lending market, still reeling from the Brexit result on June 24.

“While the business will remain highly capital generative, it is possible that this capital generation may be somewhat lower in future years than previously guided,” the bank said in a statement.

So far this year, Lloyds has already said it would cut about 4,000 positions from its 75,000-strong workforce and has closed nearly 100 branches this year. The bank also said it would look to streamline its non-branch property portfolio by around 30 percent by the end of 2018.

“Lloyds remains a no growth bank,” Ian Gordon, an analyst at Investec, said. “Its revenue outlook is flattish, hence its costs need to fall faster.”

Lloyds’ shares were down 2.5 per cent at 54.36 pence by 0749 GMT partly in response to its cautious tone on future capital generation and its possible impact on dividends.