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Llyods (LYG) Resumes Plan to Close 56 Branches for Cost Control

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Lloyds Banking Group Plc (LYG - Free Report) has revived its plan to close 56 branches amid the coronavirus pandemic-related uncertainties. The restructuring plan, announced earlier this January, had been kept on hold till October due to the coronavirus crisis.

Among the branches that are to be shut, 31 are from Llyods Bank, 10 are Halifax branches and 15 are Bank of Scotland branches. These branch closures are likely to affect about 160 jobs across Llyods Bank, Halifax and Bank of Scotland.

A Lloyds spokeswoman said, "We paused these closures due to the COVID-19 pandemic and, after careful consideration, these planned closures will take place in March and April 2021." Further, the bank stated that there would be no "compulsory redundancies."

The above-mentioned branches were initially supposed to shut down between April to October this year, mainly driven by the large scale use digital methods by customers.

With its plans to resume branch closures, the bank is following its global peers. ING Groep N.V.  (ING - Free Report) and Credit Suisse AG (CS - Free Report) are also planning to reduce their physical presence by closing down branches.

Further as part of its restructuring efforts, earlier this month, Llyods announced intentions to eliminate 735 jobs. Besides, in September, it had announced plans to cut 865 jobs. These job cuts were announced due to the pandemic-induced economic uncertainties.

With the shrinking footfall in branches and the shift toward digital banking, this move will help the bank rein in costs and streamline its processes.

Shares of Lloyds have lost 44.8% so far this year compared with the 20.3% decline recorded by the industry.

 

Currently, Lloyds carries a Zacks Rank #3 (Hold).

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