Lloyds will axe 15,000 jobs and halve its international presence, a plan its new boss hopes will save 1.5 billion pounds ($2.4 billion) a year by 2014 and return the part-nationalised British bank to health. Chief Executive Antonio Horta-Osorio, presenting his overhaul of the bank on Thursday after 122 days in charge, aims to cut through middle management and make the bank simpler and more agile. Shares surged as investors applauded the plan.
"We have to do this. The bank has lost money and is losing money as you saw in Q1 and we have to get this bank back on its feet to support the UK economy and to get it profitable in order to pay taxpayers' money back," Horta-Osorio told reporters. The latest cuts for Lloyds, Europe's seventh biggest bank by market value, will add to 27,000 job losses already since the 2008 financial crisis. It employs 103,000 staff.
The cost of the programme will be 2.3 billion pounds, but the savings garnered will allow the bank to invest an extra 2 billion pounds in its UK retail banking. Horta-Osorio will cut Lloyds' international presence to fewer than 15 countries from 30 now in order to focus more on domestic retail banking, where it is market leader and has historically been far more significant than its presence overseas.