Yahoo Finance RPT-British bank Lloyds plans cuts to FX business - sources
(Repeats Jan 21 story with no changes to text)
By Saikat Chatterjee and Thyagaraju Adinarayan
LONDON, Jan 21 (Reuters) - Britain's Lloyds Banking Group plans to scale down its foreign exchange business by the end of the year, stung by low profitability and rising competition from its rivals, three sources familiar with the matter said.
As part of a global strategic review announced in early 2018, Britain's biggest mortgage lender, which is widely seen as a bellwether for the UK economy, announced plans to focus more on its digital offering and the small- and medium-sized sector.
A source familiar with the situation said the bank would restrict its directly managed FX offering to G10 currencies such as the dollar, pound and euro.
Most cuts will come in the corporate FX sales division, said the person, adding that the FX business would for the most part go electronic.
About 10 jobs are "at risk", one ex-employee said, noting that Lloyds had already been trimming its foreign exchange team, especially on the corporate sales desk.
A spokeswoman said the bank remained committed to servicing their clients for their foreign exchange needs across the major and emerging market currencies and had no plans to change their offering.
No figures were immediately available on the actual number of people employed in Lloyds' FX business, or how many jobs would ultimately be lost.
But a third source said job losses were a certainty, with the cuts likely to be completed before June.
Lloyds last week warned its 60,000 staff to expect a cut in bonus payments after the bank took a 1.8 billion-pound ($2.35 billion) hit on mis-sold loan insurance payouts, The Guardian reported, citing an internal staff memo.
While no data was available on how big Lloyds' currency trading business was, one influential industry consultancy estimated it at around $200 million - tiny compared to $3 billion to $4 billion at Citigroup.
But even if Lloyds is a minor player in the global $6.6 trillion a day foreign exchange market, its retreat would be part of a broader trend whereby many lenders have exited FX trading due to relentlessly shrinking margins.
Years of record low volatility have made it hard to generate profits from currency trading, and the retreat of small players has seen top-five banks tighten their grip on the market, holding as much as 50% of the business.
($1 = 0.7668 pounds) (Reporting by Saikat Chatterjee and Thyagaraju Adinarayan; Additional reporting by Iain Withers; Editing by Sujata Rao and Jan Harvey)
