Lloyds to lay off 3.000 staff and close 200 branches

Britain’s Lloyds Banking Group is to lay off 3,000 workers and close 200 branches by the end of 2017, it announced Thursday.

The move comes despite the bank doubling its net profit during the first semester of 2016 on the previous year to 1,857 million pounds (2,206 million euros).

“After the EU referendum, the UK economic forecast remains uncertain although its full impact depends on diverse factors including EU talks and political and financial developments, and therefore we may see a growth deceleration,” Lloyds Banking Group CEO Antonio HortaOsorio said Thursday.

The bank said in a statement sent to the London Stock Exchange that the uncertainty generated after the June 23 “Brexit” referendum, when the British public voted to leave the European Union, and its impact on the bank depends on the “financial and political outcome” of this decision.

The job cuts are linked to a foreseeable cut in interest rates, currently set at a historical 0.5 percent, a decision envisaged by the Bank of England (BoE) which may adopt the measure in August to alleviate the impact of “Brexit”.

The closure of 200 branches is in addition to another 200 branches already slated for closure.

The British government has a 9 percent stake in Lloyds and it envisages a 1,400 million pound (1,663 million euro) savings plan by the end of 2017.

The bank’s total revenue dropped one percent down to 8,875 million pounds (10,543 million euro) during the first semester of 2016 yearonyear.

HortaOsorio pointed out that the UK enters a period of uncertainty from a standpoint of “strength”, thanks to a growth in mortgage access and low unemployment levels.

According to the group, the semesters’ profit before tax was 2,454 million pounds (2,915 million euros,) a 106 percent increase over the previous year’s same period.

The bank said it is still “premature” to determine the impact of “Brexit” and although the bank has capitalization, it is possible that “capital generation may be lower in future years.”

Once the cuts are undertaken by the end of next year, the total number of layoffs in accordance with a 2014 cost reduction plan will total 12.000 jobs. EFE