Group chief executive Antonio Horta-Osorio said the further jobs bloodletting was a “tough decision”, but that twelve million customers of Lloyds – the most UK-centric of the big five banks – were accessing the bank digitally, and seven million were using mobile apps.
“If our customers are using our branches less and digital more we have to adapt,” he said. Lloyds said the latest costcutting moves would save the bank £400 million by end-2017, taking the total number of efficiency gains since 2014 up to £1.4 billion.
The announcement came as the bank, whose subsidiaries include Edinburgh-based Scottish Widows, revealed that it had doubled its pre-tax profits to £2.5bn in the first six months of 2016.
Horta-Osorio said the Brexit vote had created economic uncertainty, interest rates were likely to be “lower for longer” and “a deceleration of growth looks likely”.
He said Lloyds was “not immune” to the UK economic outlook, but that its strong balance sheet and shares in key markets such as current accounts and mortgages made it “well positioned to meet the challenges”.
The Bank of England (BoE) is widely expected to cut interest rates to a new historical low of 0.25 per cent next week following jitters after last month’s vote for the UK to leave the European Union – its biggest export market.
But the Lloyds boss said he did not believe the BoE would go into a policy of negative interest rates, where banks pay charges on deposits with the central bank, “because that transmits a very negative signal to the economy”.
Earlier this week Royal Bank of Scotland admitted it could not rule out charging businesses for accounts in credit with RBS if Britain went into a climate of negative interest rates after being at historical lows of 0.5 per cent since the spring of 2009.
Horta-Osorio said: “We don’t have any current plans to do what RBS did. We will wait to see what the BoE does on rates.” Lloyds said that as part of its latest efficiency drive 12,000 jobs will have been lost at the bank since 2014, with the latest branch closures coming on top of another 200 branches already earmarked to put the shutters up.
As well as the branch closures, Lloyds said yesterday that it is also planning a 30 per cent cut in its non-branch properties by end‑2018.
George Culmer, the group’s chief finance officer, said: “The branch closures will impact frontline staff, but we will look to redeploy.”
The bank, still 9 per cent owned by the taxpayer after its disastrous acquisition of HBOS and £20bn state bailout in 2008, hoisted the dividend 13 per cent.
Lloyds said its lending to small and medium sized businesses in the latest trading period was up 4 per cent, while it also remained the largest mortgage lender to first-time buyers.