Lloyds Announces 15,000 Layoffs
JULIA WERDIGIER, On Thursday June 30, 2011, 4:11 am EDT
Lloyds Banking Group said Thursday that it plans to cut 15,000 jobs by the end of 2014 and scale back its overseas operations as part of a larger reorganization aimed at allowing the British government to sell its stake in the lender.
Lloyds, of which the British government owns 41 percent, said it expects to save 1.5 billion, or $2.4 billion, annually by the end of 2014. The savings would come from reducing its international presence to fewer than 15 countries from 30, lowering computer systems costs and streamlining middle management.
Shares in Lloyds rose 6.5 percent in early trading in London after the news.
''This bank has lost money and is losing money, and we have to get this bank back on its feet to support the U.K. economy and in order to enable it to repay taxpayers' money,'' the chief executive, Antonio Horta-Osorio, said. ''This will be a journey, and it will take three to five years.''
Mr. Horta-Osorio presented the cost- cutting plan four months after taking over as chief executive of Lloyds with a pledge to turn the ailing bank around. He said he plans to focus on Lloyds's British retail business and on lending to small and medium-sized companies. Lloyds is Britain's largest mortgage lender.
Lloyds, which received government funds to help it through the global financial crisis, is under pressure from the government to increase lending while also selling some assets to allow for more competition in the banking market.
The bank has already started to repay government aid and said it expects to receive offers for 632 branches it has to sell by the middle of July.
The cost savings announced on Thursday would allow Lloyds to invest 2 billion in its brand and to expand its wealth management unit focused on high-net worth individuals with links to Britain.
Mr. Horta-Osorio said he would focus on the bank's Halifax retail banking brand and improve customer services by opening some branches on the weekend, for example.
Lloyds swung to net loss of 2.4 billion in the first quarter on costs to compensate some clients that were improperly sold loan insurance.
Lloyds ran into trouble in 2008 after the government urged it to buy HBOS, a British mortgage lender that was on the verge of collapse. But the combination turned Lloyds's profits into losses and its stock slumped, forcing the government to step in with a rescue package.
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