Report: Lloyds to axe ‘impeding’ risk team after company memo

People walking past a retail branch of Lloyds Bank.
Image courtesy of Shutterstock.com

Financial Times has reported that Lloyds Banking Group plans to axe risk management staff after an internal review found the function was a “blocker to our strategic transformation”.

In a memo seen by the Financial Times last month, the bank’s Chief Risk Officer Stephen Shelley said that two-thirds of executives believed risk management was blocking progress while “less than half our workforce believe intelligent risk-taking is encouraged”.

Shelley added that the lender was “resetting” the bank’s approach to risk and controls, with the initial focus on “non-financial risks”. He believes that a new model would enable Lloyds to “move at greater pace” bringing in clearer roles and responsibilities.

The alleged memo came at a time when the lender landed itself in hot water as part of an industry-wide investigation surrounding the mis-selling of car finance.  

Mark Brown, General Secretary of the independent BTU union, said that Lloyds seemed to be “throwing the baby out with the bathwater”, adding that alleviating risk controls “could potentially have catastrophic consequences for the future of the bank”.

The memo continued: “We know people are frustrated by time-consuming processes and ingrained ways of working that impede our ability to be competitive and leave us lagging behind our peers.”

The supposed plan set out by Lloyds includes around 45 role reduction, with new roles being created. 

An unnamed spokesperson has told the FT that about 175 permanent roles were in jeopardy as a result of the changes, 150 of those in the risk division. However, the bank also planned to create 130 jobs focused on specialist risk and technical expertise.

This news comes after Lloyds announced in January that it was shrinking its physical banking presence by closing its ‘mobile banking’ operation, which provided banking services to towns and villages via vans.