Lloyds Banking Group today revealed that it was slashing thousands of jobs and shutting down many branches, as ultra-low interest rates continue to play havoc on the sector's prospects.
The bank announced an additional 3,000 role reductions and another 200 branch closures. These cuts will take place by the end of 2017 and are on top of 9,000 job cuts and 200 branch closures which had already been announced.
Lower for longer interest rates have put a squeeze on level of earnings lenders can hope to bring home, and it is now expected that an interest rate cut is to come in August. This squeeze has lead to many looking for ways to cutting their expenses.
The Brexit vote also did the industry few favours, causing high levels of uncertainty both before and after 23 June.
"Following the EU referendum the outlook for the UK economy is uncertain and, while the precise impact is dependent upon a number of factors including EU negotiations and political and economic events, a deceleration of growth seems likely," said Antonio Horta-Osorio, group chief executive. "The UK, however, enters this period of uncertainty from a position of strength, following continued private sector deleveraging, significantly improved mortgage affordability and low levels of unemployment."
Unite the union is calling on the partly taxpayer-owned bank not to make any compulsory redundancies. "This grim news of yet more job losses and branch closures will send a shiver down the spine of Lloyds employees, who have worked hard to make the bank a success and deliver excellent customer service against a backdrop of continual uncertainty," said Unite national officer Rob MacGregor.
Lloyds also delivered its half-year results today, where it announced that it had more than doubled its statutory profits to £2.5bn from £1.2bn. However, profits in the underlying business fell five per cent, going to £4.2bn from £4.3bn.
Meanwhile, total income had also slipped to £8.9bn for the six months to June, down one per cent from just under £9bn the year before.
The company also increased its interim ordinary dividend by 13 per cent to 0.85 pence per share.
Horta-Osorio added: "We have delivered a good financial performance in the first half with robust underlying profit, a doubling of statutory profit and strong capital generation, along with continued progress on our strategic initiatives."
In the results statement, the company also noted the Financial Conduct Authority informed Lloyds in May that it would be launching an investigation connected to the company's mortgage arrears handling.
The market was less than thrilled with the news. Shares are trading down three per cent at 54.10p at time of writing.