The branch closures, which are equal to 9 per cent of its network, will mainly impact the Lloyds and Bank of Scotland brands. Lloyds said 90 per cent of its customers will still have a branch within five miles of their homes, but the move does signal the end of its commitment to be “the last branch in town”.
The closures will not affect its Halifax branches and Lloyds says it could in fact open a further 50 Halifax facias. The move follows Lloyds’ decision to position Halifax as a “community” brand that aims to challenge the more traditional high street banks, while it uses Lloyds and Bank of Scotland as “relationship” brands to build loyalty with customers.
On job cuts, a spokeswoman says the precise details are not yet known, but that the majority of the roles lost will come from central or back office functions.
Horta-Osório says the job cuts and bank closures will help Lloyds adapt to the digitisation of the banking industry and shifts in technology, customer behaviour and the competitive landscape. He has outlined three key priorities through to 2017: creating the best customer experience, becoming simpler and more efficient and delivering sustainable growth.
“Digital transformation as part of our multi channel approach allows us to better meet customer needs and create value,” says Horta-Osório.
On customer experience, Lloyds says it will “continue to rebuild trust” by providing a reliable, consistent and convenient service across online, mobile and branches. It has been investing in its digital capability, recently partnering with rival banks on the PayM service, which lets customers send and receive payment using their mobile number.
Lloyds says it will invest £1bn in digital technology over the next three years to automate many of its services.
The changes are meant to save Lloyds £1bn by 2017. The banking group saw profits fall 5 per cent to £1.6bn for the first nine months of the year, in part due to another £900m provision for mis-selling payment protection insurance (PPI), taking its total to more than £11bn.
The job cuts come on top of 43,000 cuts made since 2008 and are equal to about 10 per cent of the bank’s workforce.
Earlier this year, Lloyds spun off its TSB bank as a separate business and now says it has cut its stake to 50 per cent. Lloyds Bank relaunched last year backed by a £30m marketing campaign following the spin-off.