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Metro Bank said on Thursday that the cost-cutting plan would result in about 800 job cuts.
Employees in UK banks face… Layoffs in the run-up to Christmas What one of the labor unions described as “disgraceful” timing.
Struggling Metro Bank It said on Thursday that it expects to cut staff numbers by 20% as part of efforts to save 50 million pounds ($63 million) a year. The announcement, which will affect around 800 jobs, came on the same day that Lloyds confirmed its plans to make some staff redundant, and follows news earlier this week that Barclays (BCS) is cutting 900 jobs across its UK business.
Metro Bank, which opened in 2010 as the first challenger to Britain’s major high street banks, is reviewing its unconventional policy of keeping branches open seven days a week. The bank’s shares rose more than 3% on Thursday, but are still down 67% so far this year.
“We are committed to high street stores but will move to a more cost-effective business model while continuing to focus on customer service,” CEO Daniel Frumkin said in a statement.
But becoming more like the big banks that Metro Bank is seeking to displace would “severely reduce” the appeal of the lender, said Chris Beauchamp, chief market analyst at brokerage IG. “Far from being a serious competitor to UK-based banks, Metro continues to falter,” he wrote in a note.
UK banks are far from the only major employers to cut staff numbers as the holiday season approaches. In November alone, Citigroup (C), Charles Schwab (SCHW), Deputy Media, Continental auto parts maker And Shipping giant Maersk They were among them Who announced job cuts.
Earlier this week, trade union Unite said Barclays had informed employees it would lay off 900 employees in the UK. This equates to 2% of the bank’s UK workforce, on a 2022 numbers.
A Barclays spokesman said there would be “changes” in staff numbers, as a result of increased automation and reduced “layers of management”, but did not specify a figure for any job cuts. “We are taking a number of actions to simplify and reshape the business, improve service and deliver higher returns,” the spokesperson added.
Unite described the decision to cut jobs as Christmas approaches as “disgraceful.”
“With jobs at risk, workers face real concerns about how their families will cope with rising food and fuel prices.” Dominic Hook, the federation’s national industrial coordinator, said in a statement.
Meanwhile, Lloyd’s will cut some roles as part of changes aimed at achieving the strategy it launched in February 2022, even as it recruits for data and technology roles.
A spokesperson for the group said in a statement: “Making significant changes means not only creating new roles and improving the skills of colleagues in some parts of the business, but also having to say goodbye to talented colleagues who have been part of the group’s success in the past.” Disclose the number of roles that will be affected and in which areas of work.
Although rising interest rates have raised the profits of most British banks by making lending more profitable, they have also pushed their profits higher. Funding costs created competition for customer deposits and increased the risk of borrowers defaulting on loans.
“High interest rates were viewed as a positive for UK banks initially, but for most of the past year they have been viewed as a negative,” Citibank analyst Andrew Coombs wrote in a research note last month. He pointed to the inverse relationship between movements in bank stock prices and the official interest rate, which the Bank of England raised to 5.25% – its highest level since February 2008 – after 14 consecutive interest rate hikes.
Metro Bank also said new shares issued as part of an emergency share raise last month to shore up its finances will begin trading on Thursday. Last week, shareholders approved a rescue deal that includes Colombian billionaire Jaime Jelinsky Bacal taking control of the bank.
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