Key facts
- Lloyds Banking Group aims to achieve £2 billion in annual cost savings by 2030.
- The bank will invest over £13 billion in digital services, including AI and blockchain technologies.
- CEO Charlie Nunn stated that AI will necessitate reskilling and hiring new personnel.
- The strategy includes leveraging AI and blockchain to reduce mortgage approval times to approximately three days.
- Lloyds reported a 14% year-on-year increase in second-quarter profits to £2.3 billion.
- The bank announced a £1 billion share buyback and a dividend of 1.58p per share.
Lloyds Banking Group is embarking on a significant cost-cutting initiative, aiming to reduce expenses by £2 billion annually by 2030 as part of its new Accelerate 2030 strategy. The plan involves a substantial £13 billion investment in technology, with a strong focus on artificial intelligence to drive efficiency and enhance customer services. CEO Charlie Nunn stated that AI will fundamentally change the nature of work within the bank, necessitating reskilling of existing staff and the hiring of new talent.
The bank aims to lower its cost-to-income ratio to below 45% by 2030, down from 50% in 2026. Nunn indicated that traditional cost-saving levers, such as optimizing office footprints and improving operational efficiencies, will continue to be utilized. While specific details on job losses were not shared, the strategy acknowledges the broader industry trend of AI impacting employment, with leaders from HSBC and JP Morgan also commenting on potential job reductions.
Lloyds plans to use AI for personalized customer offers, including advice for wealth and workplace pensions, and to improve the effectiveness of relationship managers. The integration of its acquisition, the fintech Curve, is also part of the digital services investment. Furthermore, the bank is exploring the use of AI and blockchain to expedite mortgage approvals to approximately three days, building on its recent completion of the UK's first public blockchain transaction using tokenised deposits.
These strategic announcements coincided with Lloyds reporting better-than-expected second-quarter profits of £2.3 billion, a 14% increase year-on-year. The strong financial performance enabled the bank to announce a £1 billion share buyback program and a dividend of 1.58p per share.