- Lloyds Banking Group has announced to close 44 branches
- Decision has been criticised by the British and Irish Trade Union Unite
- Shares of the bank traded in the positive territory post announcement
Lloyds Banking Group Plc (LON: LLOY), the London-headquartered banking behemoth, on Wednesday, 23 June, announced to close 44 branches further, in a strategic attempt to shrink the cost heads as a part of broader cost-cutting initiative exercised by other notable financial institutions of the United Kingdom.
The evidently growing digital banking and the ever-expanding scale of the transaction through the online medium has been a primary reason for lenders to shut down a number of branches that were generating less amount of revenue. The subsequent aftermath of the Covid-19 crisis just accelerated the respective decisions as all the financial institutions deliberately attempted to reduce overall expenditure.
Effectively responding to the Covid consequences, the banking space has trimmed the branches, as well as the onboard staff as a considerable portion of transactions have shifted to digital applications. Moreover, the banks are now desperately attempting to minimise offline space further to exploit the cost-effective benefits of online banking.
Lloyds axes 44 branches
Lloyds Banking will be shutting 44 of its branches across England and Wales as these outlets were addressing a handful of customers.
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According to the British and Irish Trade Union Unite, the decision of closing branches is a “bitter blow” for staff, customers, as well as local communities. Earlier in November 2020, Lloyds Banking stated that the group had restarted its plan to terminate a further 56 branches in the UK.
Shares of Lloyds Banking Group traded in the positive territory after the announcement. According to the latest data available with the London Stock Exchange, the stock of Lloyds Banking was trading at GBX 47.32, up 1.20% from the previous close of GBX 46.76 apiece.
Lloyds Banking Group shares (23 June)
Image Source: REFINTIV
Pandemic-steered branch closures
The widespread repercussions of the Covid-19 pandemic have been majorly cited as the immediate reason for branch closures as the banks and financial entities eagerly look for avenues which can help them curb their expenditure heads. The banking and financial services giant HSBC Holdings Plc (LON: HSBA) in January 2021 announced to dissolve 82 of its branches by the end of September 2021.
Following the completion of said branch closures, the bank will keep a hold of 511 branches in the UK, nearly shelving half of its outlet in the last 6 years as the group controlled a little over 1060 branches in 2015.
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Barclays Plc (LON: BARC), the London-based multinational bank, axed as many as 105 branches in 2020 alone, while in the present calendar year it aims to shut a further 63 outlets. Other than this, Marks & Spencer Group-led M&S Bank is slated to terminate all of its in-store branches by the end of this summer, Santander (LON: BNC) UK will be discontinuing 111, while TSB Bank Plc has said to suspend 155 branches in the UK.