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Lloyds Banking Group to cut another 5,000 jobs
The bank, which is partially owned by the taxpayer, announced this morning that it is reorganising its group operations, insurance and retail divisions. Around 2,600 permanent jobs across the UK will be lost as Lloyds merges several of its "heritage business areas". The rest of the 5,000 roles to go involve contractors, temporary staff and overseas workers.
Lloyds said it hopes to redeploy as many staff as possible, but could not rule out making compulsory redundancies as "a last resort".
The job cuts, which will be carried out by the end of 2010, will take the total number of roles eliminated since Lloyds acquired HBOS last year to more than 11,000.
The Unite union said today's announcement was a "bitter blow" to Lloyds' workforce.
"This Lloyds Banking Group (LBG) announcement of 5,000 job losses demonstrates the depth of corporate arrogance within this taxpayer-supported bank. This country's financial sector should be looking towards the future, rather then continuing to slash jobs without proper consideration of how to rebuild the public's confidence in our tarnished banking sector," said Rob MacGregor, Unite national officer.
Lloyds gave a breakdown of how the jobs will be lost:
• Group operations: 2,820 roles are going, with 1,350 permanent jobs eliminated, 720 staff being redeployed, and 750 contractors and temporary staff also leaving.
• Insurance: 1,190 roles are going, including 950 from life, pensions and investments business and 240 from general insurance. Nine hundred and forty permanent jobs will be eliminated, with 250 contractors and temporary staff also leaving.
• Mortgage operations: 950 roles are going, with 270 jobs eliminated and 680 staff redeployed.
Mark Fisher, Lloyds' group integration director, said the changes were "another important step" in bringing Lloyds TSB and HBOS together.
"We will continue to work closely with our colleagues affected by today's announcement to help them through these changes over the coming year. We have mitigated the impact on positions through redeployment and the release of contractors and temporary staff," Fisher said.
But Ged Nichols, general secretary of Accord, the union representing the largest number of former HBOS employees now working in Lloyds, warned that staff face months of uncertainty.
"Today's announcement is terrible news for the employees who are affected and their families.
"We always recognised that some job losses were inevitable as Lloyds TSB integrated HBOS operations, but the scale of changes announced today will leave many staff in shock."
The acquisition of HBOS last autumn has left Lloyds with considerable overlap among its workforce, and City analysts have speculated that 30,000 jobs could eventually be cut. Around 1,600 staff at Cheltenham & Gloucester were reprieved in August when Lloyds reversed its decision to close the chain.
The bank has previously cut jobs in IT, retail banking, car finance, insurance and operational support. The HBOS merger also forced chairman Sir Victor Blank to step down early after the scale of HBOS's bad debts became clear.
Last week Royal Bank of Scotland, which has also received a massive capital injection from the taxpayer, announced it was cutting 3,700 branch staff.
http://www.guardian.co.uk/business/2...cuts-more-jobs
Barclays on track for record profits in 2009
Barclays is reinstating its dividend for the first time since the banking crisis erupted. Photo: Daniel Hambury/EPA
Barclays revealed today it was in discussions with shareholders about how to pay bonuses to its investment bankers after reinstating its dividend on the back of £4.5bn profits in the nine months to September.
The figures put the bank on track to report record profits by the end of the year when the proceeds from the sale of the Barclays Global Investors asset management arm to Blackrock are included.
Although the bank has not taken any bailout cash from the taxpayer, it has been unable to pay a dividend since the banking crisis erupted. Today it announced that it is resuming payments with an interim cash dividend of 1p in December. It passed on the final dividend last year.
Pre-tax profit at Barclays Capital, the investment banking arm, was £1.4bn (or £2.714m excluding a charge on its own credit of £1.3bn). While the profits are down 38% on a year ago, the numbers will fuel speculation about the size of bonuses in the investment banking arm as income growth was almost double the level of the previous nine months, reaching £14.2bn.
The bank admitted that rises in pay for bankers in Barclays Capital - which snapped up Lehman Brothers' investment banking arm last October - were "under consideration" because of the restrictions on bonus payments being set out by the G20. These require a greater proportion of bonuses to be deferred and also to be paid in shares, or share-like instruments.
Finance director Chris Lucas said that the bank's senior independent director Sir Richard Broadbent would be meeting shareholders again later this week to discuss the best way for the bank to meet the G20 principles on pay. Lucas said: "We have started talking to shareholders and there is quite a bit more work to do."
He refused to reveal how much money was being accrued to pay out bonuses by the end of the year, but he said: "We will be fully compliant with the G20 and in considering bonus amounts we will think of all stakeholders, including employees, shareholders and the broader community – and be taking into account all their views when we decide what the amount [should be]."
Rich Ricci, chief operating officer of the investment bank, said: "We are looking at salaries. We haven't done anything yet." He added that base pay was "under consideration".
He insisted that the bank was not finding it any easier to hire staff, even though it is not subjected to the strictures put on Royal Bank of Scotland, which cannot pay a cash bonus to anyone earning more than £39,000. "It remains a very competitive market. The war for talent is very intense. I don't find it any easier [to hire staff]," said Ricci.
While it is resuming dividends, the bank warned that the "proportion of profits after tax distributed through dividends will be significantly lower than the 50% level which was maintained in recent years". The profits are down by a fifth on the comparable nine months of last year.
In other banking news today, HSBC reported that its profits for the last three months are "significantly ahead" of the same period a year ago.
HSBC and Barclays' figures show the contrast with the banks in which the taxpayer has stakes – Royal Bank of Scotland and Lloyds Banking Group – both of which are loss-making and banned from paying dividends for two years under the terms agreed with the EU for state aid.
But on Barclay's UK retail banking side, profits for the nine months "decreased significantly". The high street banking division is part of the global retail and commercial banking arm where profit before tax declined to £2.1bn compared with £3.1bn last time.
Barclays announced last week that it is disbanding this division and that Frits Seegers, hired on a £12m pay deal three years ago, was leaving as a result.
The bank indicated today that its bad debt charge was leveling off. While the impairment charges reached £6.2bn for the nine months, up from £3.7bn in the comparable period last year, the bank said it expected the full year charge to be at the bottom end of the 2009 consensus range of £9bn to £9.6bn.
John Varley, chief executive, said: "This performance shows the resilience and diversification of our portfolio of businesses."
http://www.guardian.co.uk/business/2...end-reinstated
Lloyds said it hopes to redeploy as many staff as possible, but could not rule out making compulsory redundancies as "a last resort".
The job cuts, which will be carried out by the end of 2010, will take the total number of roles eliminated since Lloyds acquired HBOS last year to more than 11,000.
The Unite union said today's announcement was a "bitter blow" to Lloyds' workforce.
"This Lloyds Banking Group (LBG) announcement of 5,000 job losses demonstrates the depth of corporate arrogance within this taxpayer-supported bank. This country's financial sector should be looking towards the future, rather then continuing to slash jobs without proper consideration of how to rebuild the public's confidence in our tarnished banking sector," said Rob MacGregor, Unite national officer.
Lloyds gave a breakdown of how the jobs will be lost:
• Group operations: 2,820 roles are going, with 1,350 permanent jobs eliminated, 720 staff being redeployed, and 750 contractors and temporary staff also leaving.
• Insurance: 1,190 roles are going, including 950 from life, pensions and investments business and 240 from general insurance. Nine hundred and forty permanent jobs will be eliminated, with 250 contractors and temporary staff also leaving.
• Mortgage operations: 950 roles are going, with 270 jobs eliminated and 680 staff redeployed.
Mark Fisher, Lloyds' group integration director, said the changes were "another important step" in bringing Lloyds TSB and HBOS together.
"We will continue to work closely with our colleagues affected by today's announcement to help them through these changes over the coming year. We have mitigated the impact on positions through redeployment and the release of contractors and temporary staff," Fisher said.
But Ged Nichols, general secretary of Accord, the union representing the largest number of former HBOS employees now working in Lloyds, warned that staff face months of uncertainty.
"Today's announcement is terrible news for the employees who are affected and their families.
"We always recognised that some job losses were inevitable as Lloyds TSB integrated HBOS operations, but the scale of changes announced today will leave many staff in shock."
The acquisition of HBOS last autumn has left Lloyds with considerable overlap among its workforce, and City analysts have speculated that 30,000 jobs could eventually be cut. Around 1,600 staff at Cheltenham & Gloucester were reprieved in August when Lloyds reversed its decision to close the chain.
The bank has previously cut jobs in IT, retail banking, car finance, insurance and operational support. The HBOS merger also forced chairman Sir Victor Blank to step down early after the scale of HBOS's bad debts became clear.
Last week Royal Bank of Scotland, which has also received a massive capital injection from the taxpayer, announced it was cutting 3,700 branch staff.
http://www.guardian.co.uk/business/2...cuts-more-jobs
Barclays on track for record profits in 2009
Barclays is reinstating its dividend for the first time since the banking crisis erupted. Photo: Daniel Hambury/EPA
Barclays revealed today it was in discussions with shareholders about how to pay bonuses to its investment bankers after reinstating its dividend on the back of £4.5bn profits in the nine months to September.
The figures put the bank on track to report record profits by the end of the year when the proceeds from the sale of the Barclays Global Investors asset management arm to Blackrock are included.
Although the bank has not taken any bailout cash from the taxpayer, it has been unable to pay a dividend since the banking crisis erupted. Today it announced that it is resuming payments with an interim cash dividend of 1p in December. It passed on the final dividend last year.
Pre-tax profit at Barclays Capital, the investment banking arm, was £1.4bn (or £2.714m excluding a charge on its own credit of £1.3bn). While the profits are down 38% on a year ago, the numbers will fuel speculation about the size of bonuses in the investment banking arm as income growth was almost double the level of the previous nine months, reaching £14.2bn.
The bank admitted that rises in pay for bankers in Barclays Capital - which snapped up Lehman Brothers' investment banking arm last October - were "under consideration" because of the restrictions on bonus payments being set out by the G20. These require a greater proportion of bonuses to be deferred and also to be paid in shares, or share-like instruments.
Finance director Chris Lucas said that the bank's senior independent director Sir Richard Broadbent would be meeting shareholders again later this week to discuss the best way for the bank to meet the G20 principles on pay. Lucas said: "We have started talking to shareholders and there is quite a bit more work to do."
He refused to reveal how much money was being accrued to pay out bonuses by the end of the year, but he said: "We will be fully compliant with the G20 and in considering bonus amounts we will think of all stakeholders, including employees, shareholders and the broader community – and be taking into account all their views when we decide what the amount [should be]."
Rich Ricci, chief operating officer of the investment bank, said: "We are looking at salaries. We haven't done anything yet." He added that base pay was "under consideration".
He insisted that the bank was not finding it any easier to hire staff, even though it is not subjected to the strictures put on Royal Bank of Scotland, which cannot pay a cash bonus to anyone earning more than £39,000. "It remains a very competitive market. The war for talent is very intense. I don't find it any easier [to hire staff]," said Ricci.
While it is resuming dividends, the bank warned that the "proportion of profits after tax distributed through dividends will be significantly lower than the 50% level which was maintained in recent years". The profits are down by a fifth on the comparable nine months of last year.
In other banking news today, HSBC reported that its profits for the last three months are "significantly ahead" of the same period a year ago.
HSBC and Barclays' figures show the contrast with the banks in which the taxpayer has stakes – Royal Bank of Scotland and Lloyds Banking Group – both of which are loss-making and banned from paying dividends for two years under the terms agreed with the EU for state aid.
But on Barclay's UK retail banking side, profits for the nine months "decreased significantly". The high street banking division is part of the global retail and commercial banking arm where profit before tax declined to £2.1bn compared with £3.1bn last time.
Barclays announced last week that it is disbanding this division and that Frits Seegers, hired on a £12m pay deal three years ago, was leaving as a result.
The bank indicated today that its bad debt charge was leveling off. While the impairment charges reached £6.2bn for the nine months, up from £3.7bn in the comparable period last year, the bank said it expected the full year charge to be at the bottom end of the 2009 consensus range of £9bn to £9.6bn.
John Varley, chief executive, said: "This performance shows the resilience and diversification of our portfolio of businesses."
http://www.guardian.co.uk/business/2...end-reinstated