The personal finance division
of Lloyds Banking Group’s Black Horse subsidiary is to be wound
down with immediate effect, after two years of cutbacks and PPI
claims difficulties that have affected the entire personal finance
market.
As a result of the move,
which follows the removal of the Black Horse personal finance
branch network last year, the consumer lending giant headed by FLA
chairman Chris Sutton will continue solely as a motor and leisure
finance provider.
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The decision comes alongside
another raft of redundancies announced by LBG, as the 41%
Government-owned financial services provider continues the
streamlining process started with its formation through a merger of
Lloyds TSB and HBOS in early 2009.
A total of 310 jobs at Black
Horse’s personal finance division are expected to go. Employees in
Cardiff and Edinburgh will be the most affected, as the business is
centred on those two cities. The announcement means that the total
number of role reductions at LBG now stands at 22,500 since it was
formed two years ago.
However, LBG insists that
this figure has been mitigated by a large majority of affected
employees being successfully redeployed or relocated elsewhere in
the group.
Black Horse’s personal
finance business had already seen 58 branches closed and 372 jobs
shed before it was moved to sit alongside the motor finance
business in February 2009. In this incarnation, it has existed as a
central lending function sharing some resources with the motor
business.
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By GlobalDataBlack Horse will continue to
write new personal finance business until the end of February 2011.
Thereafter, the operation will wind down until all its business has
dissipated.
The news should not alarm
those employed in Lloyds’ motor finance business, also branded
Black Horse, which remains strongly supported in the point of sale
market with an expectation to lend £3bn this year. LBG has made it
clear that it will continue to operate this business.
David Oldfield, chief
operating officer, wholesale, at LBG, said: “The announcement to
cease writing new business in the group’s Black Horse personal
finance operation follows a strategic review of the business. We
will work closely with the impacted employees to help them through
these changes.”
Cath Speight, national officer at the Unite union
commented: “Unite is calling on [LBG’s] new CEO, António
Horta-Osório, to make a firm commitment to all colleagues that his
first priority will be job security when he joins the company in
early 2011.”
