Key facts
- Lloyds Banking Group will cut £2 billion in costs by 2030.
- The bank plans to invest £13 billion in technology by 2030.
- AI will be used for personalized customer offers and support for relationship managers.
- Mortgage approval times are targeted to be reduced to about three days using AI and blockchain.
- Second-quarter profits rose 14% to £2.3 billion.
- Lloyds announced a £1 billion share buyback and a 1.58p dividend.
Lloyds Banking Group is set to implement a significant cost-cutting initiative, aiming to reduce expenses by £2 billion by 2030. This move is part of a broader four-year strategy spearheaded by CEO Charlie Nunn, which will see a substantial £13 billion investment in "pioneering technology," including artificial intelligence. The bank intends to leverage AI to enhance customer services, such as offering personalized financial advice for wealth and workplace pensions, and to improve operational efficiency. Nunn indicated that cost-saving measures would continue to be explored, potentially affecting areas like technology, office space utilization, and productivity improvements, though specific job loss details were not provided. He emphasized that AI presents new opportunities for service differentiation and efficient growth, necessitating ongoing reskilling and hiring. The strategy also signals an international expansion push for its corporate and institutional banking division into the US and Europe, a departure from its post-2008 crisis retrenchment. Furthermore, Lloyds is betting on AI and blockchain to expedite mortgage approvals to approximately three days and is bolstering its car loan division with an app for electric vehicle owners. These announcements coincided with the bank reporting better-than-expected second-quarter profits of £2.3 billion, a 14% increase from the previous year, enabling a dividend payout and a £1 billion share buyback. Market analyst Chris Beauchamp noted the strategy's focus on moving beyond traditional lending, acknowledging the challenges of international expansion while praising the bank's home market strength.