Lloyds Banking Group is intending to remove positions within its risk management sector following an internal evaluation that labelled the department as an impediment to the bank’s strategic change. The reorganisation details were revealed in a memo last month by Lloyds’ chief risk officer, Stephen Shelley. He stated that two-thirds of the managerial staff see risk management as a hindrance to advancement. He further mentioned that fewer than half of the total employees agreed that taking intelligent risks is being promoted.
In the memo, Shelley said that the bank is making adjustments to their approach towards risk and control, with the immediate focus being on non-financial risks. He also shared that a novel model will allow Lloyds to make quicker progress, wherein roles and responsibilities are more clearly defined.
Independent BTU union’s general secretary, Mark Brown, opined that Lloyds appears to be making detrimental decisions in a crucial period when the bank is subject to scrutiny concerning the likely mis-selling of car financing. He warned that easing Lloyds’ risk controls might put the bank’s future in grave danger. Lloyds has set a reserve of £450 million (€526 million) to address any potential costs linked with the car loan investigation. Financial analysts at RBC project that this issue could lead up to Lloyds incurring approximately £2.5 billion in costs, surpassing all its competitors.
In delineating its strategic plan, the bank confirmed that it might need to part ways with some of its valuable associated colleagues while also creating new positions and enhancing others’ skills. After considering the new positions available, the restructuring process indicates a reduction of around 45 roles in total.
The reshuffling threatens approximately 175 permanent positions, with 150 of these within the risk division according to an insider. Even so, the bank has plans to create 130 positions focusing on specific risk and technical mastery.
The memo further acknowledges the exasperation caused by deep-rooted working procedures and time-consuming processes that detract from the bank’s competitiveness causing them to fall behind their competitors’ pace.
Lloyds is currently two years into implementing a £4bn investment scheme spanning five years. The plan is aimed to redirect its earnings from the mortgage sector and focus on less interest rate-dependent income sources such as insurance and wealth management.
The banking establishment, employing approximately 60,000 personnel, has undertaken an extensive assessment of several middle-management roles spanning its operation. This initiative is aimed at intensifying its emphasis on digitised services. The bank’s risk management sector provides jobs for around 3,600 staff members. – Copyright The Financial Times Limited 2024.