Lloyds Bank Admits Cuts Nothing To Do With Brexit, Doubles Profits As UK Booms

Lloyds Banking Group – which blamed massive job cuts and branch closures on Brexit this morning – doubled its pre-tax profits last year and has now admitted the cuts were planned long ago and have nothing to do with the referendum result.

The announcement that the banking group is to cut 3,000 jobs and close 200 branches was seized upon by papers this morning as evidence that agents of “project fear” were correct, despite the UK economy remaining buoyant.

“…Lloyds cuts 3,000 jobs amid Brexit uncertainty”, the Telegraph reported. “Lloyds to cut 3,000 jobs, close more branches after Brexit shock”, Reuters news agency claimed. The Evening Standard adding: “Lloyds Bank slashes 3,000 jobs as boss issues Brexit impact warning”.

However, Lloyds revealed on Twitter this morning at 7:43am, after headlines went out, that “the decision to close these branches was made before the Brexit vote and is not linked to the result”.

Furthermore, the Independent reports that the group is actually thriving, and enjoyed a £2.5bn profit in the six months to the end of June, compared to £1.2bn in the previous half year.

The cuts, therefore, must be viewed in the context of a long-term efficiency drive by the bank, which began in 2014 – rather than the Brexit vote.

So far this year, Lloyds has already said it would cut about 4,000 positions from its 75,000-strong workforce and has closed nearly 100 branches. By 2018, the bank hopes to “streamline” its non-branch property portfolio by around 30 per cent.

Experts have said that the entire banking sector is in a “transitional state” as more people do their banking online or on their smartphones, reducing the need for expensive high-street branches.

Low interest rates have also hit the profits of big banks; however, this is a global phenomenon that was underway long before the Brexit campaign began.

Yesterday, drug company GlaxoSmithKline said it plans to invest an extra £275 million in Britain after Brexit, despite executives joining “project fear” and warning against leaving the EU.

This morning, U.S. firm Aermont Capital said they would be investing £300 million in Pinewood Studios, the British home of the James Bond and Star Wars franchises.

The continuing investment should come as little surprise, as the UK economy actually grew by 0.6 per cent in the three months to the end of June, as economic growth accelerated in the run-up to the vote to leave the EU.