The major bank TSB has announced that it will cut jobs and close branches this year.
The lender’s Spanish owner, Sabadell, announced a £29 million restructuring plan on the same day that Deutsche Bank said it would cut 3,500 jobs.
The banks benefited from high credit costs and were able to enjoy increasing profits and shareholder distributions. However, central banks, including the Bank of England, are expected to cut borrowing costs this year.
This will reduce the amount of interest lenders collect on mortgages and other loans.
And investment banks like Deutsche Bank suffer from a lack of business execution.
Job cuts: Spanish TSB owner Sabadell announced a £29m restructuring plan on the same day Deutsche Bank announced it would cut 3,500 jobs
British banks, including Barclays and Lloyds, have accelerated their cost cuts recently.
Last week Lloyds announced it would cut 1,600 jobs and in November Barclays said it could cut up to 2,000 jobs to save £1bn.
Nearly 200 bank branches will be closed this year and 645 will be closed in 2023 as more customers switch to online banking.
Asked whether TSB’s restructuring would involve cutting staff and branches, Sabadell boss Cesar Gonzalez-Bueno said: “It will involve both.”
TSB reported a 30 percent jump in profits in 2023, from £183.5 million to £237.2 million, and will pay a dividend of £120 million to Sabadell, which bought the company for £1.7 billion in 2015.
The bank has not confirmed how many jobs will be lost or how many branches will be closed.
A TSB spokesman said: “We have been clear that we are focused on reducing costs, but as with any announcement about a change to the way we work, we always consult our colleagues first.”
At the end of last year, TSB employed 5,426 people, up from 5,482 in 2022, and the number of branches fell from 220 to 211.
Meanwhile, Deutsche Bank said yesterday it would cut 3,500 jobs as it reported a 30 percent drop in fourth-quarter profits.
The company plans to cut four percent of its total workforce by the end of next year to save £2.1 billion in costs and boost profits.
Deutsche Bank employs around 90,000 people worldwide.