Leaner Lloyds plan boosts Scottish Widows

Fifteen thousand job losses sounds a lot. And it is.

It's the next wave of cost-cutting at Lloyds Banking Group, as the new chief executive takes another £1.5bn of costs out of the business.

By the time it's finished, in 2014, Lloyds will have shed 42,000 jobs, leaving around 88,000.

It's no surprise the bank had become flabby through the good times. Many companies do, and in tough times, that gets reviewed.

But Lloyds Banking Group has also been driving the cost savings from reducing overlap between Halifax Bank of Scotland and Lloyds TSB, the two companies merged in mid-crisis haste between September 2008 and January 2009.

Bad loans

There's more to it than that. There have been savings still to be made from the mergers that preceded the one in 2009; Halifax with Bank of Scotland, and Lloyds Bank with Trustee Savings Bank.

And, of course, it's been struggling to get back into profit, while writing off colossal amounts in bad commercial and mortgage loans.

The job losses may not be as they seem. Of the 27,000 role shed so far - roughly 2,500 in Scotland, as part of £2 billion in cost-cutting - less than half have been through redundancy.

Around one in eight of the total were compulsory. That's less than 4000.

More than half of the people who were in those jobs have found new roles within Lloyds Banking Group.

There's always a lot of churn in bank jobs, and those losing a role have been able to apply for a vacated one elsewhere.

Hard sell

What new chief executive Antonio Horta-Osorio has chosen not to do in his wide-ranging review is to shed bits of the business, at least in Britain.

Excitable headlines suggested Scottish Widows, the Edinburgh based insurance and asset management division, was being lined up for a £7bn sell-off.

On the contrary, it's at the core of the strategy to target more than half of Lloyds' 30 million customers - yes, that's half the British population - and flog them a range of Widows' financial products.

Other banks have done their research on customer preferences, and found they don't much like the practice of taking you hostage with a financial adviser when all you want to do is pay in a cheque.

But customers walking into Bank of Scotland and Halifax branches can expect to get even more of the hard sell if ambitious new targets are to be met.

The plan is to raise the number of people buying such products by 50% between last year and 2014, doubling sales and profit from this cross-selling known as bancassurance.

The bank hopes to exploit a radical shift being required by regulators in the market for independent financial advisers.

Smart phone banking

And if you've got a wadge of wealth behind you, Lloyds also wants to compete more effectively in the hard-fought wealth management market.

The plan is to triple the number of customers in that sector, and to double income per customer.

Allied to this is investment in technology, with the new chief executive a firm believer in the prospects for banking online and through mobile phones.

That doesn't mean damage to the branch network. Not yet, anyway. The 285 Bank of Scotland branches seem assured, while the 185 Lloyds TSB Scotland branches are among the 623 being sold off under a requirement from the European Commission to slim Lloyds' market share.

Supply chain

With Bank of Scotland being one of the key brands backed by the new boss at Lloyds, and with Scottish Widows playing a more central role in the bank's strategy, it's far from all bad news for the Scottish financial sector.

That's with the exception of one big figure set for the chop. Lloyds Banking Group has 17,000 suppliers - from auditors to stationery. That is to come down to around 10,000.

And as one of the biggest effects of the loss of headquarters from Halifax Bank of Scotland was the loss of contracts for its suppliers in and around Edinburgh, that streamlining of suppliers could mean a new wave of business being lost.