Lloyds wields axe as C&G branches are cut

Published on Tuesday 9 June 2009 10:06

LLOYDS Banking Group is set to announce the first wave of branch closures that will see up to 1,400 jobs axed.

It is set to announce the closure of all 160 branches of mortgage provider Cheltenham & Gloucester, which has one Edinburgh branch on Castle Street.

The closures will be the biggest impact on the high street operations of the new group since Lloyds TSB rescued Edinburgh-based HBOS.

All previous announcements on job cuts have involved non-customer facing roles. And it will also be the biggest individual round of job cuts this year.

It is part of the huge restructuring of the group, which will see Bank of Scotland become the main retail brand in Scotland, with Lloyds TSB being gradually phased out. South of the border, Lloyds TSB will be the main brand.

It is understood that senior management at C&G's 160 UK branches were briefed on the changes yesterday, with a formal announcement expected either today or later this week.

A Lloyds spokesman declined to comment on the cuts.

C&G is the mortgage arm of Lloyds TSB. As well as its own branches, C&G mortgages are offered through Lloyds TSB branches.

The mortgages are designed, marketed, sold and administered by C&G, while Lloyds TSB is the lender. It is not yet known whether the C&G brand will continue to be offered to customers.

C&G, formerly a building society, is one of the largest mortgage lenders in the UK.

The Cheltenham & Gloucester Permanent Mutual Benefit Building and Investment Association was formed in 1850, initially based in Cheltenham before opening a first Gloucester branch in 1896.

It expanded rapidly across the UK and opened its 100th branch in 1979, before acquiring a number of other building societies in the 1980s.

Its was taken over by the then-Lloyds Bank in 1997, which saw the society demutualised.

Lloyds has cut almost 3,000 jobs since mid-April through a series of cuts to a number of divisions. Lloyds is also expected to announce job cuts in other parts of its business later today.

Union leaders have previously called for it to "come clean" about the scale of the cuts it plans, rather than the piecemeal approach adopted to date.

Last month, Lloyds said it had suffered a "significant" rise in impairments at HBOS in the first three months of its financial year, and admitted it expects more losses in the second half of the year.

It was announced yesterday that Lloyds had successfully raised 4 billion in an open offer of shares, which it will use to repay the Government's preference shares.