Lloyds targeting to save £1 billion in costs, says report

Lloyds May Target 1 Billion Pound in Additional Cost Savings

Lloyds May Target 1 Billion Pound in Additional Cost Savings

According to media reports, part-nationalised bank Lloyds may target additional cost savings of up to £1 billion when its strategy review is unveiled next week.

Lloyds is also set to stage an early exit from the Bank of England’s Special Liquidity Scheme (SLS), started in 2008 to save banks during the 2008 credit crisis, reported Reuters quoting sources with direct knowledge of the matter.

However, it is still not confirmed if the bank’s chief executive Antonio Horta-Osorio will announce the bank’s exit from the SLS when he presents the strategy review on June 30, the sources said, adding the £1 billion target has not been finalised yet either.

The review will be “evolutionary rather than revolutionary”; Horta-Osorio had told politicians this month. He also plans to “revitalise” the Halifax bank, inherited after Lloyds took-over HBOS during the credit crisis, and intends to continue with its “multi-brand” strategy.

However, Lloyds still faced major hurdles and it could take five years before the bank’s fortunes revived, Horta-Osorio had told the parliament’s Treasury Select Committee.

Analysts believe Lloyds will divest some of it non-core assets to shore up it balance sheet despite the chief executive indicating that there will not be any major shake-up. They also want update on the bank’s plan to sell more than 600 branches, which could help it raise another £3 billion.

There has been speculation that European and Asian banks may be interested in buying the assets apart from the likely bidders – Virgin Money, National Australia Bank UK and new bank venture NBNK.

Lloyds proposed restructuring has sparked job-cuts speculation. Following its take-over of the HBOS Group in 2008, the bank has already shed close to 27,000 jobs.

European regulators had imposed the branch sales on Lloyds as a condition for receiving the British tax-payers’ money during the crisis, just as Rival RBS was similarly asked to sell assets.

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