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Markets

Lloyds wields axe after Brexit shock

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Opening sequence

Markets

Lloyds wields axe after Brexit shock

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COMING UP:Lloyds wields axe after Brexit shock

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00:00:00
>> The shock of Brexit hitting the pockets of Britain's banks. Lloyds announcing plans to axe a further 3,000 jobs and close 200 branches in order to save 400 million pounds by the end of next year. But is Brexit entirely to blame? Reuters banking correspondent, Lawrence White.>> Lloyds were already cutting jobs and branches because they say people are increasingly banking online.
00:00:25
They just said that they're accelerating the plans to reduce staff members as a reflection of the slowing economic outlook. The biggest concern for Lloyds and the rest of banks is low interest rates, which makes it harder for them to earn money when they lend it out to companies and customers.
00:00:41
The fact that we expect another interest rate cut from the Bank of England next week signals an even tougher environment for banks who make most of their money from the difference between what they pay savers and what they can lend out. Lloyds was rescued by British tax payers during the financial crisis and is the most exposed to any downturn in the economy.
00:01:01
It had reported a strong pretax profit for the first half of this year but the latest move suggests troubling times ahead.>> Lloyds are seen as a bit of bellweather for banks and the boarder economy. They're a very UK-focused bank, they're one of the stronger ones, so the fact that they're cutting jobs and branches at an accelerated rate is a warning sign I think for banks and for the broader economy.
00:01:23
We could see further cost cutting initiatives from banks, which are under great pressure to grow revenues in a low interest environment, something that is very difficult for them. Lloyds is the first major bank to report results since the referendum, and amid this environment of uncertainty, investors will be keen to know how Barclays has fared.
00:01:41
It reports on Friday.