Lloyds to cut 15,000 jobs, on top of the 27,000 roles lost since the credit crunch began, as part of its strategic review to deliver £1.5 billion of annual savings in 2014.
Apart from the job cuts the group will make the savings through improving processes and IT platforms, delayering its management structure, simplifying its legal structure and centralising support functions.
The total cost of the programme will be around £2.3 which will enable an additional £2 billion of investment between now and 2014 to grow the core business.
The group says Halifax will be revitalised as “a leading challenger brand in UK retail banking”, and it will further invest in Lloyds TSB and Bank of Scotland.
Lloyds says it is committed to keep branch numbers at the same levels as now, excluding Project Verde. This is the European Union mandate that Lloyds Banking Group must sell 632 branches and the TSB and Intelligent Finance brands, which combined serves around 5.5 million customers.
Lloyds has issued an information memorandum to prospective buyers, and offers are expected by mid-July. It says good progress has been made and a buyer should be announced by the end of this year, with the transaction completed by the end of 2013.
Bancassurance will be a core part of the business through a multi-brand retail strategy by cross selling to its retail banking customers. Scottish Widows will provide a wide range of products to customers – quashing rumours that it was to be sold off.
Lloyds intends to build up its wealth business for affluent and high net worth customers, and refocus the international business. It has an international presence in 30 countries and that will be streamlined to less than half that by 2014.
Group chief executive António Horta-Osório, who joined Lloyds Banking Group in March from Santander, stated at the start of the strategic review report: “Our aim is to become the best bank for customers. We have around 30 million customers, iconic brands, including Lloyds TSB, Halifax, Bank of Scotland and Scottish Widows, and high-quality, committed people.
“We will unlock the potential in this franchise over time by creating a simpler, more agile and responsive organisation, and by making substantial investments in better-value products and services for our customers, to deliver strong, stable and sustainable returns for our shareholders.”