Lloyds to Cut 3,000 Jobs as it Braces for U.K. Slowdown After Brexit Vote
July 28 2016 - 3:55AM
Dow Jones News
By Max Colchester
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 GBP400 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 António Horta-Osório 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 GBP18.43 billion,
compared with GBP11.35 billion a year ago, while net profit came in
at GBP1.59 billion, compared with a loss of GBP211 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 03:40 ET (07:40 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Lloyds Banking (NYSE:LYG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Lloyds Banking (NYSE:LYG)
Historical Stock Chart
From Apr 2023 to Apr 2024