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U.k. Bank Job Cuts Surpass 55,000; More Are Forecast

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U.K. Bank Job Cuts Surpass 55,000; More Are Forecast

Job losses at British banks reeling from the global financial crisis surpassed 55,000 with financial firms forecasting further cuts.

At least 23,000 of the reductions were made in Britain and the rest overseas, according to data compiled by Bloomberg.

“U.K. retail banks have been hit very hard,†said Paul Szczepanski, a senior manager at Cameron Kennedy, a London-based financial recruitment firm. “They have to appease their government bosses by cutting costs.â€

Lloyds Banking Group Plc announced a further 2,100 reductions yesterday, bringing net cuts since April to about 6,600, the data show. U.K. financial services companies told the Confederation of British Industry in a June 29 survey of 73 firms that they may axe another 13,000 positions in this quarter.

“Staff costs represent a high proportion of banks’ cost bases, typically 50 percent to 60 percent of administrative expenses,†said Danny Clarke, a Liverpool-based analyst at Shore Capital Group Plc. “We would not be surprised if there were further job losses, particularly for Lloyds and RBS.â€

The job losses have caused anger among lawmakers and trade unions, who cite government-funded bailouts at RBS, Northern Rock and Lloyds.

“As a taxpayer-supported organization, real questions need to be asked as to how far this bank can be allowed to go in this systematic slashing of staff,†the Unite union, Britain’s biggest, said yesterday after the Lloyds announcement.

Total Cuts

Royal Bank of Scotland Plc, Britain’s biggest government- controlled bank, has cut the most posts of any U.K.-based bank, with 22,320 jobs lost since the onset of the credit crisis in 2007, according to the data.

HSBC Holdings Plc, Europe’s biggest bank, has axed 11,998 jobs worldwide and Barclays Plc has cut 9,544, Bloomberg data show. HBOS Plc, acquired by Lloyds in January for about 10.4 billion pounds ($16.6 billion), eliminated 615 jobs before its takeover by Lloyds in January. London-based Standard Chartered Plc announced last week that it had eliminated 2,500 jobs this year. That brings total job cuts, including 2,000 at government- owned Northern Rock Plc, to more than 55,500.

There are conflicting signals about the outlook for British banks. The country’s economy shrank by 2.4 percent in the first quarter of this year, more than previously estimated, in the biggest contraction since 1958, the Office for National Statistics said yesterday.

‘Far From Over’

HSBC Chairman Stephen Green yesterday told a banking conference in London that the world financial and economic crisis is not yet over.

“We are almost two years into a financial and economic crisis which is far from over,†he said. “We cannot even say we are past the worst.â€

Yet U.K. consumer confidence increased to the highest level in 14 months last month as shoppers became more optimistic that the recession is past its worst, GfK NOP said.

Bank job losses in the U.K. include about 7,500 at RBS, 6,600 at Lloyds, 5,300 at Barclays, 2,000 at Northern Rock and 1,700 at HSBC, according to the data.

The rate of job cuts has slowed slightly, the CBI survey showed, with jobs cuts reaching 17,000 in the first quarter and an estimated 15,000 in the second quarter.

The FTSE 350 Banks Index has added 31 percent in the past three months, rebounding from a 27 percent decline in the first quarter.

Be afraid.

Get yourself out of debt.

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  • 407 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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