(9 June 2009)

Lloyds Banking Group today announced the closure of all 164 branches of the Cheltenham & Gloucester building society with the loss of 1600 jobs. The move follows a major organisational change, primarily in its retail division, with a view to make cost savings. In November last year Lloyds accepted a £1.7bn cash injection from the UK Government - the taxpayer now owns 43% of the Lloyds Banking Group. Unions called the move "death by a thousand cuts" and demanded more clarity from the Lloyds Banking Group on the overall reduction in numbers.

The Cheltenham & Gloucester (C&G) branch network will close in November as C&G focuses on building its significant mortgage and savings direct and intermediary businesses. Cheltenham & Gloucester customers will continue to be able to manage their accounts at any of Lloyds TSB’s more than 1,800 branches, over the phone and by post. For the overwhelming majority of C&G branches, tha bank claims that there is an existing Lloyds TSB branch within 400 metres.

A multi-brand mortgage business

As previously announced in December 2008 Lloyds Banking Group will operate a multi-brand mortgage business. They will continue to offer new mortgages in the intermediary market through; Birmingham Midshires, C&G, Halifax and Scottish Widows brands. From 1 July, Bank of Scotland and Intelligent Finance, whilst continuing to service the needs of existing customers, will no longer write new intermediary mortgage business. These changes will result in the loss of 159 full time jobs across the intermediary sales teams.

As previously announced, Bank of Scotland, Halifax and Lloyds TSB will all operate on the high street, providing new mortgages and a range of other products directly to customers. Later this year, Bank of Scotland - which currently provides Halifax branded mortgages on the high street - will offer Bank of Scotland branded mortgages.

The Gloucester based headquarters for C&G, Halifax in West Yorkshire and the Pendeford, West Midlands, based headquarters for Birmingham Midshires will remain very important locations for the Group. The Group’s mortgage businesses will continue to be managed primarily from these key centres.

Retail product and support functions

One integrated business unit will be formed which will be based across a number of different locations to service Lloyds' retail business. This will result in the loss of around 168 full-time jobs across the UK over the next 12 months.

Personal loan business

The Group’s personal loans product team will be moved to one site in London and there will be a reduction in the number of colleagues employed in this operation. These changes will result in the loss of up to 265 full-time jobs, mainly based in Chester.

The Group is also making changes to its Black Horse Personal Finance business which provides point of sale finance to customers. The Black Horse direct sales operation is being increased, including potentially recruiting more colleagues next year, while, at the same time, the number of Black Horse centres will reduce from 92 to 61. Black Horse is also reorganising its CarSelect business and will move from Cardiff to Birmingham. On a combined basis, these changes will result in the loss of 140 full-time jobs by October.

Helen Weir, Group Executive Director, Retail, Lloyds Banking Group said: “It is always difficult to make decisions about our business that affect our colleagues. We will work through these changes carefully and sensitively and continue to consult closely with our unions throughout the process.”