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Lloyds urged to rethink closures as profits surge

By James Sillars, Business Reporter
Lloyds has reported a surge in first quarter pre-tax profits to ?1.6bn, prompting a business group to call on the bank to "rethink" branch closures amid its digital investment drive.
The lender, which returned to private hands a year ago following its 2008 taxpayer bailout, has announced a string of closures in recent years - though it will continue to have the biggest high street presence among its rivals.The latest cuts - a further 49 branches - were confirmed just over a week ago as the industry shifts towards digital banking.Lloyds pointed to resilience in the UK economy for its first quarter profit growth - which represented a rise of 23% compared with the first three months of 2017.The bottom-line growth was seized upon by the Federation of Small Businesses (FSB) as evidence it could easily afford to maintain branch services for its members.
Lloyds urged to rethink closures as profits surge

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Lloyds and its rivals argue dwindling business on the high street has contributed to branch closures
FSB national chairman Mike Cherry said: "Now that Lloyds is well and truly back in the black, it should reconsider its aggressive branch closure programme."The public was there for the bank during the financial crash. It's high time that support was returned."With profits like these, is another 70 branch closures really necessary?"When a town loses a bank branch it hurts vulnerable consumers, high street footfall and small business revenues."We've seen challenger banks who are expanding their branch networks also report strong results, so we know it's an approach that works from a commercial perspective."If a small firm can't deposit and withdraw cash easily it has to store more on site, making it a target for theft."Equally, many small business owners have working relationships with branch staff that go back years. That's not something that can be replaced by an app."If the developments at TSB over the past few days have taught us anything, it's that sometimes you just have to visit a branch in person.":: TSB limiting access to digital platforms as IT woes continue
Lloyds urged to rethink closures as profits surge

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TSB's digital customers have endured five days without access to their accounts
Lloyds chief financial officer, George Culmer, told investors on Wednesday: "In terms of branches and branch closures, we remain very much committed to our branch network, in terms of having the largest market share and you'll see we've recently opened a flagship branch up in Manchester and doing so in Oxford St (London) very shortly."We remain very much committed to the branch network and are making significant investments … and in terms of expanding our mobile branches to give us additional coverage across the nation."In terms of where we go, … will depend on our customers behaviour and we will respond in terms of how our customers would want to transact with us."What I can say, in whatever shape that eventually turns out … branches are going to remain a core part of that proposition."The bank's results showed underlying profits, which do not reflect one-off costs, of €2bn for the three months.However, it announced a further €90m provision for the payment protection insurance (PPI) mis-selling scandal - taking its total bill to date closer towards €19bn as an August 2019 deadline for claims looms.It was announced last week by the Financial Conduct Authority, which has an awareness campaign fronted by an animatronic head of Arnold Schwarzenegger, that total complaints against financial services firms were up 40%, with payouts topping €30bn so far.
Lloyds urged to rethink closures as profits surge

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It is expected that other major lenders, also exposed to PPI and due to report results this week, may also set aside more money to cover the growing cost of the scandal.Lloyds said its plans and expectations for the year remained on track - with earnings continuing to be boosted by its expanded credit card operations since the acquisition of MBNA and lower funding costs.
Lloyds urged to rethink closures as profits surge

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Antonio Horta-Osorio is the chief executive of Lloyds Banking Group
Chief executive Antonio Horta-Osorio, said: "We have made a strong start to 2018 and have begun implementing the strategic initiatives which will further digitise the group, enhance customer propositions, maximise our capabilities as an integrated financial service provider and transform the way we work.
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"The UK economy continues to be resilient, benefiting from low unemployment and continued GDP growth."We expect the economy to continue to perform along these lines during 2018."
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