Lloyds: FT Story On Changes In Risk Function, Little Surprise, Should Not Impact Spreads

Lloyds Banking: FT story indicating job losses and a reset in its risk function. Little surprise with the company’s regulatory track record and should not impact spreads, we feel. (LLOY LN)

• FT is quoting sources indicating the risk function is a “blocker to our strategic transformation” with restructuring news coming from a recent memo from Chief Risk Officer Stephen Shelley. The article indicates 175 staff are at risk, out of a total of 60,000 staff.
• Indications are that the process will start with a focus on non-financial risk which infers it will become more widespread. Restructuring within banks is nothing new and, after yet more recent regulatory failures (e.g. car finance), we’re unsurprised to see Lloyds running a (small) cull in a division.
• Close Brothers (CBG LN), not a EUR credit name, has been the key victim of the UK car finance crackdown and more sweeping changes there appear likely, we feel.