Proactive Investors - Lloyds Banking Group PLC (LSE:LON:LLOY) will restructure its risk management department with a net 45 job cuts, as managers think it is impeding progress of its strategic transformation.
The lender confirmed to Proactive that 45 jobs were being cut after new roles were factored in, with the move entirely linked to the strategy launched in early 2022 by CEO Charlie Nunn, which included an intention to diversify away from mortgages.
An internal review found most executives see the function as “blocker to our strategic transformation”, the FT reported, with a note to staff last month from the FTSE 100-listed lender’s chief risk officer revealing less than half the workforce believe "intelligent risk-taking is encouraged".
A new approach to risk and controls will initially focus on non-financial risks, enabling Lloyds to “move at greater pace”, the memo said.
The banking trade union, BTU, questioned the timing of the decision as Lloyd's motor finance arm is investigated as part of a Financial Conduct Authority's review of historical commission arrangements, where Lloyds is seen as facing the biggest impact in the industry.
Lloyds could face an impact of £2 billion is now forecast by RBC, of which the bank has so far set aside under £500 million.
Lloyds easing back on risk controls could have drastic consequences for the bank, the BTU told the paper.
Shares in the bank rose 1% in early trading but soon saw almost all those gains wiped out.
A Lloyds spokesperson said: “To achieve the ambitious strategy we launched in February 2022 and to meet our customers’ evolving needs, we are transforming our business. The implementation of this strategic plan is well under way, and we are already delivering benefits.
“Making changes means not only creating new roles and upskilling colleagues in some parts of the business but also having to say goodbye to talented colleagues who have been a part of the group’s success in the past. Where that is unfortunately the case, we will do everything we can to support them with the changes recently announced.
“In this case, there are around 45 role reductions, after new roles being created are factored in.”