Lloyds Banking Group is to increase its cost savings target for the end of 2017 from £1.0 billion to £1.4 billion.
To achieve this, the bank, which is still partially owned by the taxpayer, will to close around 200 jobs and shed circa 3,000 jobs.
The news came as the group posted its results for the first six months of the year. Its underlying profit was £4.161 billion, 5% lower than in the first half of 2015, driven by a 1% fall in income and higher impairments, partly offset by lower costs. Statutory profit before tax more than doubled to £2.454 billion compared with £1.193 billion in 2015.
Lloyds said that, at 30 June 2016, only 9% of mortgages had a LTV of greater than 80% compared with 43% at 31 December 2010 and recent growth in buy-to-let lending has been significantly below the market.
António Horta-Osório, group chief executive, said: “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. Given the sustainable recovery in recent years, the UK economy enters this period of uncertainty from a position of strength and is well positioned to face any economic headwinds. The simplification and transformation of the business in recent years and our prudent approach to risk position us well to continue to deliver strong returns to our shareholders.
“As a simple, UK focused bank we have benefited from the sustainable nature of the recovery in the UK economy. In recent years house prices have increased, businesses and consumers have been deleveraging, more people are in work with unemployment at a record low, and wages have been growing.
“These improvements in the economy and our low risk approach are reflected in the quality of our lending portfolios and we continue to de-risk the business. In Buy-to-let mortgages we have grown significantly below the market, and in London we have restricted our share of mortgage flow through loan-to-income caps. In commercial banking we have reduced our exposure to higher risk segments through a selective participation strategy.”
