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Scottish Widows retained as Lloyds cuts another 15,000 jobs

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.


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There are 9 comments at the moment, we would love to hear your opinion too.

  1. “Increase income per customer by 50% by 2014”

    If you are a Lloyds customer, be very afraid!!

  2. bancassurance, lets wind back time 20-25 years to when the banks could really rip customers off……………….well done to all who thought this up!

  3. last one out turn the lights off !

  4. I wonder if the FSA read the news papers as it will see from the Lloyds statement that RDR is going to create a mass market advise gap. Congratulations FSA you have done what you set out todo push consumers to banks and away from IFA’s. I bet they have all bought bank shares

  5. “simple self-service propositions with integrated planning tools” this is a great way to sell someone a product which is unsuitable for their golas/needs/ATR/CFL without the liability of having given advice when things go wrong!

  6. Why doesn’t the FSA MAKE the Banks & non-advise based sales tell the customer that their products may not be the best under “execution only” or “non-advice”? Also why not tell them to seek “advice” from a qualified broker? We have all manner of other areas where it is a legal requirement to state “We recommened that you seek advice”. Imagine if you had a critical plan with them and needed to make a claim with only 27 illnesses against 40 for some other providers! Lets not forget definitions as well! Why can this be allowed under T.C.F. The FSA really needs to take a look at what it is doing!

  7. It’s interesting that the Lloyd’s announcement states that they are going to take advantage of the massive advice gap when in reality what they really mean is they are going to be selling structured products through execution only methods or limited advice models.

    When is the regulator going to wake up and realise that some of the consequences of RDR will be even more inappropriate products sold to customers through greedy organisations that are only there to generate as much profit for themselves and have no interest in customer care.
    I hope that the regulator forces Lloyd’s to name their consultants are salespeople rather than posing as advisers.
    t’s clear that the Lloyds banking group needs to be split up into several different companies and that Scottish Widows should be floated as an individual company. The regulator should also take action to stop banks from giving financial advice as they have clearly shown that they do not have the expertise or the ethical standards to give advice. Bank assurance should be dismantled and banks should become only Banks

  8. All so simplified, lots of ‘non advised sales’ and shedloads of commission with no comeback for the customer, mind you that would save money wasted on the FOS andthe FSCS.

    A ‘cunning plan’ indeed my Lord.

  9. Absolute, unadulterated bull!, but it worked!!!!

    Sshare price hike, support from a government propped up institutution for an inept government institution!!!!!!!!!

    The public & IFA industry has been lead up the garden path by the blind, clueless and inept straight into the profit & loss side of the banking fraternity!!!!!!!

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