LONDON - Britain’s biggest domestic bank Lloyds is cutting around 1,600 roles across its branch network, a spokesperson for the lender said on Jan 25, as part of an overhaul to provide more services online.

The cuts are part of a renewed push by banks to cut costs as tough economic conditions and pressure on margins from competition and peaking rates prompt them to tighten their belts, despite a year of robust profits for the industry.

Rival Barclays also slashed thousands of jobs in 2023, with the majority falling in the bank’s back office support unit, Reuters first reported in November.

As part of its revamp, Lloyds also plans to create 830 roles in an expanded “relationship growth” team to understand customers’ financial goals and provide services across branches, video meetings and over the phone, the Lloyds spokesperson said.

The net result of the changes will be a loss of about 769 roles, the spokesperson said.

The process is separate to a shake-up of mainly back office roles reported in November, the spokesperson said, which put around 2,500 jobs at risk.

In a post on social media platform X, employee union Accord said the move would represent significant changes to ways of working for its members.

“As more customers choose to manage their day-to-day banking online, it’s important our people are available when it matters most,” the Lloyds spokesperson said.

The spokesperson added there would be no role reductions for the “most junior” positions, and voluntary redundancy was also being offered in some situations.

News of the fresh round of restructuring comes amid rising investor concerns Lloyds may have to shell out hundreds of millions of pounds to compensate customers who might have overpaid for motor finance between 2007 and 2021.

Regulator the Financial Conduct Authority (FCA) launched a review into the market earlier in January, which analysts at RBC estimated in a note on Jan 25 could ultimately cost Lloyds – a big player in the market through its subsidiary Black Horse – as much as £2 billion (S$3.41 billion).

Analysts at Jefferies estimated a potential £1.8 billion bill for Lloyds, in a separate note on Jan 24.

A Black Horse spokesperson said: “We are currently reviewing the FOS (Financial Ombudsman Service) decision and will work collaboratively with the FCA on their upcoming review.” REUTERS