The job toll at bailed-out Lloyds since it rescued HBOS is poised to top 40,000 after a fresh round of initiatives by new chief executive, António Horta-Osório, intended to restore the troubled bank to financial health.
An estimated 15,000 job cuts on top of the 28,000 roles already cut are expected as the Portuguese-born banker slashes middle management to save up to £1bn, though he may avoid putting a figure on the number of redundancies.
The much-anticipated strategic review at Lloyds has been described as "evolution not revolution" by Horta-Osório, who was parachuted in from Santander to replace Eric Daniels. Daniels led the HBOS takeover during the 2008 banking crisis. The pressure on jobs in the financial sector comes amid carnage on the high street, where at least 10,000 positions are on the line as retailers collapse amid a downturn in sales.
At the time of the HBOS deal, the Halifax and Bank of Scotland business employed almost 75,000 staff and the integration of the two business has already taken a heavy toll. The new cuts will take place as Horta-Osório attempts to make the bank profitable enough to allow the government to begin to sell its 41% stake.
Dave Fleming, Unite national officer for the finance sector, said: "Unite will be seriously concerned if the purpose of the strategic review is to make Lloyds even leaner ahead of any possible sell-off of the state's stake in the bank."
The Lloyds cuts come as HSBC also tries to prove to investors that it can keep its costs under control. An announcement of 700-1,000 job cuts is expected on Thursday as the self-styled local bank overhauls the way it offers financial advice to its customers.
The cutbacks in the sector are taking place amid pressure on banks to build up capital and as the independent commission on banking, chaired by Sir John Vickers, works on ways to force banks to "ringfence" their customer businesses from riskier operations.
Andew Tyrie, the MP who chairs the Treasury select committee, told the annual British Bankers' Association conference that banks should try not to clinch a behind-the-scene deal with Vickers. George Osborne, the chancellor, has already told the banks that he expects to adopt a ringfencing proposal by Vickers, whose final report is due on 12 September.
Angela Knight, head of the BBA, again warned of the "unforeseen consequences" of ringfencing and Tyrie called for the debate to be aired in public.
"If arguments against ringfencing are strong and persuasive we should not implement them," said Tyrie. "Banks must put their objections fully into the public domain. We must take the public with us. If after September the banks continue to complain without having publicly engaged, it is inevitable that those complaints will be set at a discount."
As well as tying to tackle the issue of banks being "too big to fail", Vickers is also looking at competition on the high street and suggested Lloyds sell off more branches than the 632 it has already been told to offload by the EU.
Banks were also urged by Paul Tucker, deputy governor of the Bank of England, to start piling up capital in anticipation of a tougher economic climate.
He told the BBA that the economic environment was sufficiently threatening for banks to build up capital when the "sun is shining".
Tucker sits on the new financial policy committee, which issued the same message to banks last week. He also revealed that many banks would not receive the top rating under a new regulatory system, known as the proactive intervention framework, that will be implemented by the new prudential regulatory authority.
Bankers were also told at the conference that the results of European-wide stress tests had not yet been collated by the European Banking Authority. Andrea Enria, chairman of the EBA, revealed European regulators would have some discretion to impose additional capital requirements on banks, on top of the 7% mandated by international regulators. Vickers, though, wants the minimum to be 10%.
Ana Botín, who took over the helm of Santander in Britain after Horta-Osório, told the BBA that retail banks should not be hit by the additional requirement. Any percentage point increase in capital a bank is required to hold over the 7% minimum will add 0.2 percentage points to lending for small businesses.
Neither Lloyds nor HSBC would comment on the anticipated job cuts.
2007, research for The Banker magazine found, reports the Daily Express. For the latest updates PRESS CTR + D or visit Stock Market news Today
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