New CEO targets leaner Lloyds with 15,000 job cuts

Thursday, June 30th, 2011 | Finance News

LONDON (Reuters) – Lloyds is to cut 15,000 jobs and halve its international presence under a radical overhaul by its new chief executive aimed at returning the part-nationalized British bank back to health.

Lloyds said on Thursday it will deliver 1.5 billion pounds ($2.4 billion) of annual savings by 2014, which would allow it to invest an extra 2 billion pounds in its core retail banking activities. The cost of the program will be 2.3 billion pounds.

The bank aims to cut its international presence to under 15 countries by 2014 from 30 now.

New Chief Executive Antonio Horta-Osorio, whom Lloyds poached from rival Santander UK, said his plan will create a more agile organization by cutting through middle management, centralizing control functions, and creating a simpler legal structure.

"We will unlock the potential in this franchise over time by creating a simpler, more agile and responsive organization, and by making substantial investments in better-value products and services for our customers, to deliver strong, stable and sustainable returns for our shareholders," Horta-Osorio said in a statement.

Lloyds, 41 percent owned by the UK government after needing to be bailed out during the financial crisis and with 30 million customers, said it will "revitalize" the bank, including the Halifax brand it inherited after its troubled 2008 takeover of HBOS.

Bancassurance will remain a core part of the group and it said it plans to restart a progressive dividend payments once it is allowed to do so.

Lloyds and Royal Bank of Scotland were bailed out and part-nationalized by the British government during the credit crisis. Britain ended up with a 40.6 percent stake in Lloyds and around 83 percent of RBS.

Lloyds shares closed up 1.1 percent at 44.66 pence on Wednesday.

($1=0.626 British Pounds)

(Reporting by Sudip Kar-Gupta and Steve Slater; Editing by Paul Hoskins and Mike Nesbit)

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