Lloyds banks warn coronavirus18 Mar 2020 07:58
Lloyds will delay part of a £3bn technology investment programme in response to the coronavirus pandemic to maintain its capital levels, its chief executive said today, as the head of Royal Bank of Scotland (RBS) warned the outbreak would dent profits.
Horta-Osorio warned that a decline in consumer spending would lower Lloyds’ fee income, and that the banking giant was likely to sell fewer mortgages as homebuyers are prevented from viewing potential properties by the social isolation measures.
Speaking at the same conference, RBS chief executive Alison Rose said it was “too early” to know what likely financial impact Covid-19 would have on the bank, but added that the Bank of England’s recently 50 basis-point rate cut was likely to hurt its income.
The BoE’s emergency cut would hit revenues by around £170m per 25 basis point cut – translating to a roughly £340m hit in total, Rose said.
“Clearly a lower rate environment places more pressure on the NIM [net interest margin, a measure of profitability] and we will obviously respond to that,” she said.
Rose also told the conference that RBS was experiencing volumes of payments “close to Black Friday levels” without experiencing any issues.
Read more: London Metal Exchange plans to suspend ring trading amid coronavirus outbreak
Rose, who took over as chief executive of the lender in November, said that over 19,000 staff had worked from home last Monday and that RBS had the functionality for over 36,000 employees to do so.
The bank’s executive team are working across split sites, she continued, and will be “able to manage business as usual”.
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