Lloyds cuts office space as profits plunge

Lloyds Banking Group has a plan to restore profitability.

It's going to take advantage of the trend for working at home, and slash office space.

The lender plans to reduce its total footprint by a fifth within three years.

The move comes after a big plunge in earnings.

On Wednesday (February 24) the bank reported full-year pretax profits of 1.7 billion dollars.

That was less than a third of the previous year's level, though it still beat analyst forecasts.

The bank blamed mounting bad loans, which forced it to set aside billions of pounds to cover possible defaults.

To turn things around the firm is investing in its insurance and wealth management operations, as well as aiming to cut costs.

Wednesday also saw bleak numbers from rival Metro Bank, which saw losses multiply.

It too warned that loan defaults would mount in the months ahead, as government support for businesses winds down.

As for office space, commercial property firms will be watching developments with alarm.

Earlier in the week bigger rival HSBC said it would cut its offices by 40%.

Video Transcript

- Lloyds Banking Group has a plan to restore profitability. It's going to take advantage of the trend for working at home and office space. The lender plans to reduce its total footprint by a fifth within three years. The move comes after a big plunge in full year earnings. On Wednesday, the bank reported pre-tax profits of $1.7 billion. That was less than a third of the previous year's level, though it still beat analyst forecasts.

The bank blamed mounting bad loans, which forced it to set aside billions of pounds to cover possible defaults. To turn things around, the firm is investing in its insurance and wealth management operations, as well as aiming to cut costs. Wednesday also saw bleak numbers from rival Metro Bank, which saw losses multiply. It too warned that loan defaults would mount in the months ahead as government support for businesses winds down.

As for office space, commercial property firms will be watching developments with alarm. Earlier in the week, bigger rival HSBC said it would cut its offices by 40%