LONDON—Britain’s Lloyds Banking Group said Thursday it plans to eliminate 3,000 jobs and close 200 branches — the first big cuts announced since Britain voted to leave the European Union.
Lloyds is expanding its cost-savings program because of changing consumer behavior and the expectation that interest rates will now remain lower for a longer period than previously expected as a result of the vote, the bank said. The cuts, which are equivalent to about 4 percent of Lloyds’ workforce and almost 10 percent of its branch network, come in addition to previously announced reductions and are expected to save an additional 400 million pounds ($528 million) annually.
“Following the EU referendum, the outlook for the U.K. 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 in growth seems likely,” CEO Antonio Horta-Osorio said in a statement.
The weaker economic growth is expected to push the central bank, the Bank of England, to cut interest rates next week or provide more stimulus to bring down market borrowing rates. Low interest rates put pressure on banks’ profits by reducing their margins — meaning trouble for firms like Lloyds.
Some analysts have predicted the economy will grind to a halt or even contract after the vote, which has seen business activity take a substantial hit.
