Lloyds said that the move, which will result in the closure of 44 Halifax branches and lay-off of 750 people July 2010, followed an extensive and exhaustive review of all options. Lloyds is also planning to close a customer call centre and its Irish intermediary business that provides residential mortgages through brokers, motor finance and commercial asset finance.
Lloyds said: “There is no strategy for this business that will see it achieve break-even or profit in a realistic timeframe. Unfortunately, Halifax is simply too small to succeed in this contracting market.”
However, Lloyds added that it would keep its Halifax business in Northern Ireland and concentrate on its corporate and commercial banking operations.
Accusing Lloyds of panicking, Bernard Daly, a representative of union Unite at the bank, said: “There is a huge human cost to the announcement today, and people are in a state of total shock. It is a crazy, wrongheaded decision which is likely born of a London boardroom that has no sense of the strong future which the bank can have. We will not give up on these jobs, they are too important for the country.”
Reportedly, Bank of Scotland, a unit of Lloyds Banking Group since its rescue takeover of HBOS in 2008, had been reviewing its operations since early 2009. Lloyds has pumped almost EUR3.5bn into BoSI since then as loan losses on its estimated EUR12bn property and construction loan book spiral.
Lloyds, 43% owned by the government since receiving bailout package from taxpayers, is in the process of a reorganization, streamlining its operations after the HBOS merger and also selling off a string of UK assets under a state aid ruling from EU regulators late last year.
