Lloyds axes jobs and estate agent before cash call
Bank continues to streamline operation
Saturday 17 October 2009
Lloyds Banking Group yesterday offloaded its loss-making estate agency chain for just £1 amid signs that a final decision on a huge cash callwill be made within days. The sale of Halifax Estate Agencies will result in the loss of 460 full and part-time jobs, although the company said compulsory lay offs would be made only "as a last resort".
The chain has been taken on by the "Your Move" owner, LSL Property Services, which is planning to rebrand the 218 offices. Other banks leftd the home-selling business some time ago and the Halifax business has been struggling in the wake of the downturn, gradually reducing its presence on the High Street.
The bank said the disposal was made because having an estate agency chain was no longer core to its "business model". Although 1,050 employees will transfer under existing terms and conditions to the new owner the 460 lay-offs will be required because 121 of the branches had Halifax counters within them which were not included as part of the sale.
Lloyds maintained that its customers would not be disadvantaged because most of the counters are within a mile or less of a Lloyds TSB, Halifax or Bank of Scotland branch, all three of which brands come under Lloyds' banner.
Lloyds has already sold Insight Investment to the US fund manager Mellon for £235m and is in talks to offload some of its Scottish Wealth management businesses to Rathbone Brothers as it continues to streamline the group, created from the shotgun wedding of the Halifax owner HBoS with Lloyds when the former was teetering on the edge of bankruptcy.
A cash call would provide capital to keep the group out of the Government's asset protection scheme, which analysts at Morgan Stanley said was no longer a cost-effective deal. More than £260bn of potentially toxic assets will be insured, but the £26bn premium, paid for in non-voting B shares, is seen as expensive.
The LSL chairman, Roger Matthews, said: "This is is a significant opportunity for LSL to acquire a high quality branch network." His operation is now the second-biggest UK estate agent, behind Countrywide.
The EC is considering whether the scheme constitues state support that could distort the market and would likely demand disposals, particularly given Lloyds' dominance in current accounts and mortgages.
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