The move is said to be part of the integration of Lloyds with HBOS, acquired by Lloyds last year in a badly-bungled rescue attempt which resulted in the combined group having to be bailed out by the taxpayer in pretty short order. But the speed and totality of the closure has brought cries of outrage from unions, which claim that the 150 yr old C&G name is being sacrificed in order to save a more tarnished, if much bigger brand.
Either way, it’s not hard to see why Lloyds has made this move. Faced with the choice between the Halifax brand – still Britain’s biggest mortgage lender despite its recent travails – and the hugely less well known, if comparatively blameless C&G, it was pretty obvious which one was going to be the loser.
Coming as it does barely a fortnight after it was revealed that the Abbey name is also to disappear from our high streets, it’s also another nail in the coffin of the crop of former building societies which demutualised and became banks back in the 90s.
Lloyds is also killing off the even smaller, if almost as historic, Clerical Medical brand. The closures may also be an attempt to toss a bone to EU regulators, which are still understandably uneasy that the Lloyds/HBOS merger will damage competition in the marketplace. For reasons that look shakier as every day passes, our own competition watchdog waived its own rules especially to OK the deal, which would never have been allowed under normal circumstances.
Lloyds has already culled 3,000 jobs this year and now employs 140,000. As the news of yesterday’s £4.3bn rights issue demonstrates, the bank is extremely keen to pay down its debt to the taxpayer as soon as humanly possible and get back to being a free agent, so there may well be more of the same to come. Some industry watchers are predicting losses totalling 25,000 by the time the merger process is complete.
Although the C&G branches are all going, existing C&G customers will retain accounts and mortgages in the Cheltenham & Gloucester name, at least for the time being.
It’s pretty grim tidings for anyone who works for C&G of course, but the markets take a sterner view of these matters and Lloyd’s actions seem to have met with approval there – shares are up almost 4% this morning. Even bad news can be good news for some.