1 Lloyds may cut 9,000 jobs (BBC) Lloyds Banking Group is planning to cut around 9,000 jobs – around a tenth of its entire workforce – over the next three years, the BBC understands. The announcement is seen as part of chief executive Antonio Horta-Osorio’s strategic review of the business. The three-year plan is also expected to include some branch closures.
The cuts are believed to be in response to the shift of many customers from physical branches to online banking. More job losses would mark the continuing decline in headcount at the bank since its near-collapse and bailout in 2008 and 2009, at the height of the financial crisis. Since then it has axed 30,000 jobs, and announced a further 15,000 job cuts as part of a three-year plan in 2011.
The government still holds a 25% stake in the bank, but has reduced its holding from about 39% through two separate share sales since September last year. Lloyds has already divested itself of more than 630 branches through its flotation of the TSB business earlier this year. It currently operates more than 2,000 branches across the country through its remaining Lloyds Bank, Bank of Scotland, and Halifax brands.
According to the banking trade body the BBA, digital banking transactions are now worth almost £1bn a day, with almost 40 million mobile and internet banking transactions every week. The bank has returned to profitability under the stewardship of chief executive Antonio Horta-Osorio. It posted its first annual profit since the financial crisis last year, although it has also been hit by Payment Protection mis-selling costs, and a multi-million pound settlement related to the Libor scandal.
2 UK interest rate to stay at historic low (Angela Monaghan in The Guardian) Bank of England policymakers have signalled that there will be no rise in interest rates soon amid slowing economic recovery and heightened risks from the eurozone. Minutes of the October meeting of the Bank’s rate-setting Monetary Policy Committee showed seven members voted to leave rates unchanged at the historic low of 0.5% they fell to at the height of the financial crisis in March 2009.
The majority of the MPC felt the risks associated with a rate rise were too great amid signs the UK recovery was losing momentum. They also believed there was little justification for an increase with inflation below the 2% target at 1.2% and persistently weak wage growth.
3 Reforms the real test for India’s Modi (Straits Times) Come next month, when the Indian Parliament sits, it will be looking to not just legislate new laws but also axe old, obsolete ones. On the table will be a Bill for repealing nearly 300 statutes that the Law Ministry is expected to submit. This is on top of another Bill for repealing 36 archaic laws that was tabled during the parliamentary session that ended last month.
This exercise is aimed not only at improving governance but, just as crucially, also at making it easier to do business in India. Prime Minister Narendra Modi had pledged in the run-up to May’s general election to fix the country’s flagging economy. One way he is looking at is cutting red tape, including outdated laws, that has placed India at 134th out of 189 nations in the World Bank’s “ease of doing business” ranking.
The easy ones on the chopping block include a Treasure Trove Act enacted in 1838 when India was under British rule that requires anyone who discovers treasure worth as little as 10 rupees to turn it in to the government as it belongs to “Her Majesty”.
The real test of Mr Modi’s resolve, however, is whether he will deal with labour laws that make it hard to fire workers, which will bring his government up against strong labour unions. Rigid labour laws have meant that more than 90 per cent of Indian workers are hired informally as firms dodge the laws. They have also led to zombie companies: loss-making state-run firms that have stopped operations but continue to pay staff. One is the British India Corporation, a textile firm that stopped operating nine years ago but whose 1,800 workers continue to clock in each workday to be paid and promoted.