The financial services sector is going to be deeply impacted, as the various banking and the insurance entities have announced job cuts across the verticals. The latest is the Lloyds Banking Group Plc, which presently has a representative base of around 70 thousand, going for the same. One out of the sixteen roles in the organisation is planned to be eliminated, which translates into axing of around 780 roles across its branch network.
At the same time, the Insurer, Direct Line Insurance too has embarked on a Â£60 million cost-cutting drive and confirmed that it was also on jobs cut spree, planning to cut 800 roles from its strong representative base of 11 thousand.
These cuts which are expected to occur by October this year shall impact the positions of banking consultants, managers, and customer-centric roles at Lloyds Bank. However, there is no announcement as of now regarding the closing of bankâs agencies. Not just Lloyd, but other banks in the industry are cutting down jobs due to automation of bank processes. Moreover, the way consumers bank today has contributed to these job losses. People are relying heavily on mobile banking applications and online banking for carrying out their day to day transactions. Most of the economies are encouraging non-cash transactions, and the online banking/mobile banking is providing convenience to customers as it is seamless and easy to use and works without any paperwork. Basically, the consumers are experiencing new age banking which is digital banking. Hence, some of the banks in the UK have decided to reduce the number of branches which saw a minimal footfall of customers, and this shall eventually lead to job cuts. However, the redundant staff would be offered positions in other verticals within the organisation or shall join nearby flagship branches.
In its recent financial results (FY19), the bankâs Underlying profit was reported down by 7 per cent to Â£7.5 billion. The bankâs net income was down by 4 per cent to Â£17.1 billion. The bank took initiatives to reduce its cost base; total costs were reduced by 5 per cent to Â£8.3 billion.
Bromley headquartered, Direct Line Insurance Group plans to implement the job cuts at two of its sites, out of which one would completely shut down by 2022. However, there is no clarity on which sites or which kind of roles would be mainly be impacted. The Insurer believes that the digitalisation is luring away its potential customers through an online offering. People around the world have now gained understanding in the insurance as a product and have started buying it online. The move to cut jobs by the insurer can be considered as a cost-saving plan. The insurer is preparing to adapt to these recent consumer trends and believes that this shall translate to some job losses.
About Lloyds Banking Group Plc
United Kingdom based, Lloyds Banking Group Plc (LON: LLOY) is engaged in the business of providing financial and banking services with an array of specialised services such as Investment Banking, Merchant Banking and Personal Banking. The company has segregated its operations into the retail segment, Commercial Banking segment, Consumer Finance segment as well as Insurance and other business segment.
Lloyds Banking Group Plc -Stock price performance]
Daily Chart as on 28-February-20, before the market close (Source: Thomson Reuters)
On 28th February 2020, while writing at 02:07 PM GMT, Lloyds Banking Group Plcâs shares were clocking a current market price of GBX 49.22 per share. The companyâs market capitalisation was at Â£35.44 billion at the time of writing.
On 13th December 2019, the shares of Lloyds Banking Group Plc have touched a new peak of GBX 73.66 and reached the lowest price level of GBX 47.90 on 28th February 2020 in the last 52 weeks. The companyâs shares were trading at 33.18 per cent lower from the 52-week high price mark and 2.76 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.
The volatility of the companyâs stock was 18 per cent lower as compared with the index taken as the benchmark, as the beta of the companyâs stock was recorded at 0.82 with a gross dividend yield of 6.69 per cent.
The shares of the company have delivered a negative return of 18.40 per cent in the last quarter. The companyâs stock plunged by 19.44 per cent from the start of the year to till date. The companyâs stock has given investors 19.93 per cent of a negative return in the last year.Â
About Direct Line Insurance Group Plc
Direct Line Insurance Group Plc (LON: DLG), incorporated in 1988 is the UK based insurance company. The primary activity of the business is to provide insurance cover to both retail customer and businesses through the right kind of product. The companyâs product type for retail customers includes â Motor, Home and Rescue and other personal lines. The company also helps its commercial clients in raising funds, receipts and payments of dividend.
Direct Line Insurance Group Plc -Stock price performance
Daily Chart as on 28-February-20, before the market closed (Source: Thomson Reuters)
On 28th February 2020, while writing at 12:41 PM GMT, Direct Line Insurance Group Plcâs shares were clocking a current market price of GBX 308.10 per share. The companyâs market capitalisation was at Â£4.31 billion at the time of writing.
On 3rd April 2019, the shares of Direct Line Insurance Group Plc have touched a new peak of GBX 358.69 and reached the lowest price level of GBX 266.70 on 13th November 2019 in the last 52 weeks. The companyâs shares were trading at 14.10 per cent lower from the 52-week high price mark and 15.52 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.
The volatility of the companyâs stock was 38 per cent lower as compared with the index taken as the benchmark, as the beta of the companyâs stock was recorded at 0.62 with a gross dividend yield of 6.77 per cent.
The shares of the company have delivered a positive return of 1.10 per cent in the last quarter. The companyâs stock was up slightly by 0.16 per cent from the start of the year to till date. The companyâs stock has given investors 9.25 per cent of a negative return in the last year.Â