Lloyds Bank to cut £2bn in costs as part of AI-powered strategy

Lloyds Banking Group will launch a four-year strategy in January focused on efficiency, technology-led growth and higher shareholder payouts. Chief executive Charlie Nunn said the UK’s largest high street lender would invest £13bn in the business by 2030 while cutting a further £2bn in costs. Investment priorities include “AI-powered advice” for wealth management and workplace pensions, personalised offers based on customer behaviour, and tools supporting relationship managers. Lloyds also expects agentic AI to help differentiate its services, introduce products it has not previously offered and improve productivity. Nunn gave no details of potential job losses. He said the bank would consider the same levers used over the past five years, including technology, office-space reviews and productivity improvements. The changes would affect work, he said, requiring continued reskilling and new hiring. Lloyds’s 550 branches will remain important, but their role will be guided by customer behaviour and data. The plan also marks a shift toward international expansion after the retrenchment that followed the bank’s bailout during the 2008 financial crisis. Lloyds aims to grow its corporate and institutional banking operations in the US and Europe. The bank is betting on AI and blockchain to reduce mortgage approval waiting times to about three days. It also plans greater rewards and loan discounts for loyal customers. Lloyds will expand its car-loan division, which remains affected by the long-running motor finance commission scandal. It plans a one-stop-shop app allowing drivers to buy cars, arrange insurance and set up electric-vehicle charging points. Chris Beauchamp, chief market analyst at IG, said the move away from traditional lending was delivering but remained a work in progress. He warned that international expansion and becoming a larger global player would be demanding, with success far from guaranteed. The strategy accompanied better-than-expected second-quarter profits of £2.3bn for April to June, up 14% year on year. Lloyds announced a 1.58p-a-share dividend and its first half-year share buyback, worth £1bn. Its share price rose 1.7% on Thursday morning.