Lloyds Banking Group Plc will cut a further 3,000 jobs as it warned Britain’s vote to leave the European Union would hurt its ability to boost dividend payments.
Pretax profit, excluding one-time items, fell to 4.16 billion pounds ($5.5 billion) in the first half of the year, from 4.27 billion pounds a year ago, the London-based bank said in a statement Thursday. While that beat the 4.06 billion-pound average estimate of seven analysts surveyed by Bloomberg News, the shares fell as much as 4.4 percent after the bank said Brexit would reduce the amount of capital it will generate this year by 40 basis points and could hurt future earnings.
A potential economic slowdown in the wake of Britain’s vote to leave the European Union a month ago is adding to the pressure that persistently low interest rates have put on Chief Executive Officer Antonio Horta-Osorio’s plans to boost earnings. Slashing expenses will help counter a reduction in customer demand for loans and a squeeze on profit margins as the Bank of England considers reducing its key interest rate beyond the current record low.
