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Lloyds (LYG) to Shut 44 Branches as Clients Shift to Digital Banking

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Lloyds Banking Group plc (LYG - Free Report) will close 44 more branches between September and November this year. The plan is in sync with the changing consumer preferences toward digital banking.

Among the branches that are to be shut, 29 are from Lloyds Bank and remaining are Halifax branches across England and Wales. These branch closures are likely to affect about 166 jobs.

Thus, including the above-mentioned branches, Lloyds will close 100 branches in 2021 (in aggregate), having already shut down 56 sites earlier in the year. Subsequently, the company will have 779 Lloyds Bank branches, 560 Halifax branches and 184 Bank of Scotland branches.

Vim Maru, the Lloyds retail director, noted that these branches were witnessing substantially fewer transactions over the last five years as the customers move toward digitization, which became more pronounced last year during the coronavirus pandemic. He said, “Like many businesses on the high street, we must change for a future where branches will be used in a different way, and visited less often.”

Nonetheless, Lloyds reiterated its view about branches remaining an integral part of service. Further, despite the closures, nearly 90% of its customers will still have a branch within five miles of their home.

With its plans to shut branches, Lloyds is following other banks like Banco Santander, S.A. (SAN - Free Report) , HSBC Holdings (HSBC - Free Report) and ING Groep N.V. (ING - Free Report) that are also planning to reduce their physical presence by closing down branches. Further, with the shrinking footfall in branches and the shift toward digital banking, this move will the bank help to rein in costs and streamline its processes.

Shares of Lloyds have rallied 32.1% so far this year, outperforming the industry’s growth of 18.3%.

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Currently, Lloyds carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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