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Lloyds Banking Group is planning to cut risk management roles as part of a restructuring of its business, as reported by the Financial Times, citing an anonymous source and an internal memo circulated by the British bank’s chief risk officer, Stephen Shelley.
In the memo, seen by the FT, Shelley wrote that two-thirds of Lloyds executives believed risk management was blocking progress at the bank. “Less than half our workforce believe intelligent risk-taking is encouraged,” he added.
According to the FT’s source, the restructuring is set to involve around 175 roles, including 150 in its risk management division. However, Lloyds would also create an additional 130 specialist risk-related roles.
A bank spokesperson confirmed that Lloyds plans to cut around 45 jobs, “after new roles being created are factored in”.
“Making changes means not only creating new roles and upskilling colleagues in some parts of the business but also having to say goodbye to talented colleagues who have been a part of the group’s success in the past,” a Lloyds spokesperson said in a statement.
Lloyds is currently two years into a £4bn, five-year investment plan aimed at diversifying its income sources away from mortgages, focusing on areas less susceptible to interest rate fluctuations such as wealth management and insurance.
The FT notes that the bank has reviewed thousands of middle-management roles across its business as it attempts to increase its focus on digital services.
The cuts to its risk function come as the bank has set aside £450mn to address potential fines from the Financial Conduct Authority’s ongoing investigation into motor finance mis-selling.
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HSBC is poised to double its workforce in China by next year as it ramps up the expansion of its wealth management business in the country, as part of its broader Asia pivot strategy.
“We certainly are in an acceleration mode because we are seeing the confirmation of our expectations when we started our wealth journey in China onshore,” stated Nuno Matos, the bank’s head of wealth management, in an interview with Reuters yesterday.
Matos revealed that HSBC has recruited approximately 1,700 wealth managers in China since 2021 and aims to increase this number to 1,900 by year-end, targeting 3,000 by 2025.
The bank’s expansion in China comes amid mounting economic challenges fuelled by a debt crisis in the property sector and local government. Fitch Ratings recently downgraded its outlook on China’s sovereign credit rating to “negative”, citing concerns over escalating risks to public finance.
Despite HSBC’s wealth and personal banking unit posting an operating loss of $90mn in China last year, Matos remains optimistic about its future prospects. “In China, we are investing for the future. It’s a market that demands you to be patient, and persistent,” he said.
Georges Elhedery, HSBC’s chief financial officer, echoed this sentiment in a CNBC interview in March, expressing confidence in China’s mid- to long-term economic outlook despite its current challenges.
“We’re looking at a major economic transition, which is taking place, which gives us very strong grounds to be very positive about the medium- and long-term outlook,” Elhedery said.
“Some of the Western economies have gone through those transitions in the past; China is going through a transition today,” he added.
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Fintech company Revolut announced on Tuesday that it has secured a banking licence in Mexico, paving the way for its expansion into Latin America’s second-largest economy.
“This licence will enable Revolut to offer a diverse array of financial products and services to users in Mexico,” the company said in a statement, noting its readiness to undergo a third-party audit process by Mexican authorities that will kick-start its expansion plans.
Revolut plans to facilitate cross-border remittances for Mexican customers, with a broader set of financial services to follow. According to Reuters, remittances to Mexico reached $63.3bn in 2023, a record 8 per cent jump from the previous year.
Launched in the UK in 2015, Revolut has since exceeded 40mn retail customers worldwide. Its expansion into Mexico follows its entry into Brazil in May last year.
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Banco Sabadell CEO César González-Bueno assured reporters on Tuesday that the Spanish lender faces no immediate pressure to sell its UK bank, TSB.
Nationwide’s acquisition of Virgin Money in March, alongside Barclays’ purchase of Tesco Bank in February, has sparked speculation regarding ongoing consolidation within the UK’s banking sector, amid increasing competition within a tight UK lending market.
“The commitment to TSB is indefinite, so we have nothing on the horizon,” González-Bueno said, adding that market sentiment within the UK’s banking sector had taken a positive turn.
Sabadell’s chair, Josep Oliu, echoed Bueno’s stance, stating that TSB remains a valuable asset for the bank, with potential for continued profit growth over the next few years.
In 2023, TSB posted a 71 per cent annual rise in net profit, reaching £175mn. The bank finished the year with an efficiency ratio of 73.6 per cent, a decrease from 78.5 per cent in 2022, although still above its counterparts in the UK.
