Lloyds to Cut 3,000 Jobs as Lender Braces for U.K. Slowdown
July 28 2016 - 4:20AM
Dow Jones News
LONDON—Lloyds Banking Group PLC is to cut 3,000 extra jobs as
the British bank warned that Brexit will hit the U.K. economy in
the months to come.
The U.K.'s biggest retail bank Thursday warned that "a
deceleration of growth seems likely" following Britain's vote to
leave the European Union. Faced with a combination of lower
interest rates and muted economic growth the bank presented a plan
to cut an extra £ 400 million ($528.9 million) of costs, by
chopping thousands of jobs, closing some two hundred branches and
selling off unwanted properties.
So far the bank has yet to see any real impact from Brexit among
retail customers, Lloyds Chief Executive Antó nio Horta-Osó rio
said. But "It is still early days," he added. Among corporate
customers, however, activity had been declining even before last
month's vote. Despite the looming slowdown, Lloyds doesn't have any
plan to ratchet back lending or cutting exposure to the U.K.'s
commercial real-estate market, Mr. Horta-Osorio said.
His comments came as the bank, which is 9% owned by the British
government, presented sturdy first half results.
The lender reported a rise in revenue to £ 18.43 billion,
compared with £ 11.35 billion a year ago, while net profit came in
at £ 1.59 billion, compared with a loss of £ 211 million in the
same period last year. The bank is increasing its interim dividend
by 13% to 0.85 pence a share.
It is unclear how future dividend payments could be affected by
economic uncertainty.
"It is possible that this capital generation may be somewhat
lower in future years than previously guided," the bank said. Mr.
Horta-Osorio said that he believed the Bank of England would likely
cut interest rates by 0.25 percentage point at its next policy
meeting.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
July 28, 2016 04:05 ET (08:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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