Lloyds TSB Group, Britain's biggest and most profitable retail bank, reported a 20 per cent rise in profits yesterday and moved to reduce its already low cost base to fight competition in financial services.
The bank said its efficiency drive would mean some 3,000 job cuts in 2000, excluding its newly acquired Scottish Widows life assurance business, plus the streamlining of its branch network. Lloyds said it would take a £200 million sterling (€324 million) charge for the shake-up in 2000.
The bank reported annual pretax profits in 1999 of £3.62 billion, up from £3.02 billion in the previous year.
Earnings per share were up by 18 per cent to 46.2p.
The results were in line with market forecasts, which had looked for profits of £3.6 billion to £3.75 billion.
But the bank's share price fell yesterday, partly reflecting, according to banking industry analysts, the market's disenchantment with banks versus high-tech companies and worries about Lloyds' Internet plans.
Lloyds has seen its shares under-perform the wider market this year by about one-third, partly on fears that the Internet will bring a flood of new competitors, hitting margins and eating into market share.
The bank's own Internet ambitions include plans for grabbing one million customers across Europe in three to four years and securing a 20 per cent share of the British online banking market.
Chief executive Mr Peter Ellwood would not comment on specific acquisition targets or on speculation that Lloyds might bid for Royal Bank of Scotland or Bank of Scotland, the loser in the bid battle for National Westminster Bank.
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