Lloyds Banking Group is to cut another 15,000 jobs as part of its strategic review which places Scottish Widows at the heart of its future bancassurance strategy.
The job losses are part of package of cuts aimed at saving £1.5bn by 2014. The bank has already cut around 27,000 jobs since it stepped in to rescue HBOS at the height of the financial crisis.
The cost-cutting programme will look to save £2.3bn in total, and is expected to free up about £2bn for investments between now and 2014. The group also intends to streamline its international presence from around 30 countries to less than half that number by 2014.
The bank has also revealed plans to retain Scottish Widows as it looks to boost its bancassurance operations and attempt to profit from the “mass market” advice gap post-RDR.
Lloyds says it wants to be the “primary wealth advisor” to its “mass affluent, affluent and high net worth customers”. It will launch an execution-only service and a new investment platform incorporating Scottish Widows and third-party products. Lloyds says the goal is to “more than triple the number of in-proposition customers, and to increase income per customer by more than 50 per cent by 2014”.
Yesterday, Money Marketing revealed group chief executive Antonio Horta-Osorio’s desire to put Widows at the “front and centre” of the bank’s future strategy with a focus on its intermediary and bancassurance offerings.
Lloyds says it will invest in new bancassurance advice models for protection and investments which it suggests will be “simple self-service propositions with integrated planning tools”. The bank expects to increase bancassurance customers by 50 per cent by 2014, compared to 2010 figures.
The group has also announced that it expects to identify a purchaser for 632 of its branches by the end of this year, with the deal set to conclude by the end of 2013. Lloyds has now issued an information memorandum to prospective buyers with indicative offers set to be made by mid-July. Lloyds says the implementation costs of the disposal could be up to £1bn, depending on the buyer, but says these costs will be excluded from its combined businesses results.
Horta-Osorio says: “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.”
The news has resulted in a 7.2 per cent jump in the bank’s share price. At 8.32am it stood at 47.87p.