Lloyds Banking Group (LON:LLOY) is planning to reorganise its commercial bank and eliminate some senior management, Bloomberg has reported. The move will come with the bailed-out lender looking to cut costs at one of its biggest divisions.
Lloyds’ share price has gained ground in London this morning, having added 0.93 percent to 60.18p as of 08:37 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.05 percent higher at 7,507.98 points. The group’s shares have lost a little more than five percent of their value over the past year, as compared with a near one-percent rise in the Footsie.
Lloyds planning reorganisation
Sources with knowledge of the matter told Bloomberg that David Oldfield, a veteran at Lloyds and head of its commercial unit since last year, was leading a push to simplify the structure and reduce headcount. The people further noted that an announcement could be made this week. The move will come with chief executive Antonio Horta-Osorio looking to reduce the lender’s costs in relation to revenue.
The sources explained that the reorganisation of the commercial bank will reduce four segments to three as the mid-markets unit is merged into global corporates. The division will retain its financial institutions and small- and medium-sized enterprise arms. Some directors at the commercial bank are said to have already left the lender because of Oldfield’s plan.
Analysts on bailed-out lender
UBS, which sees Lloyds as a ‘buy,’ set a price target on the stock of 80p last week, while JPMorgan Chase & Co remains ‘overweight’ on the shares, without specifying a valuation. According to MarketBeat, the FTSE 100 group currently has a consensus ‘hold’ rating and an average price target of 74.80p.