Lloyds Bank launches £2bn AI cost-cutting drive

Lloyds Bank launches £2bn AI cost-cutting drive

Louis Goss

Thu, July 30, 2026 at 11:28 AM GMT+3 2 min read

Britain's biggest lender has revealed plans to cut its costs by £2bn using AI.

Lloyds Bank outlined a new four-year programme to boost efficiency by "realising AI value" which it claimed would "drive a productivity step change".

The new strategy came as Lloyds announced pre-tax profits of £4.3bn for the first half of 2026, marking a 23pc increase on the same period last year.

Lloyds said it planned to use so-called AI "agents", which can act as a kind of autonomous digital co-worker, to "transform" its customer service operations and "unlock colleague productivity".

However, the cost-cutting drive will revive concerns about the effect of AI on jobs.

The bank did not offer any forecast of the number of new roles it expected to create through AI or the old jobs that might be cut.

Mark Brown, general secretary of the Affinity union, which represents Lloyds staff, accused the bank of preparing to offshore jobs to India after it announced plans to open a new technology centre in Hyderabad.

He said: "The new Prime Minster can't hope to grow the economy if Lloyds – which makes 96pc of its profits in the UK – is allowed to offshore key knowledge-based jobs."

Lloyds does not recognise Affinity's figures.

Charlie Nunn, Lloyds' chief executive, said: "We think at least 50pc of what we're doing in AI is going to be about differentiating and extending what we do for customers into new areas.

"The other 50pc is around helping our colleagues do their tasks more effectively."

He said this would require bankers to "reskill and redesign" how they work.

In January, Mr Nunn said that AI would force bankers to "reskill themselves" and warned the bank would have to "reduce some jobs in some areas".

However, he played down predictions the technology would replace hundreds of thousands of banking positions.

2030 strategy

Alongside its results on Thursday, Lloyds announced plans to invest £13bn in its digital systems and new wallet apps for its 28 million customers.

The announcement, part of its new "Accelerate 2030" plan, comes after it acquired digital banking app Curve last year.

Lloyds already uses AI to process customer complaints and says the technology delivered a £50m benefit to its balance sheet in 2025. It expects AI will give it an additional £100m benefit this year.

The bank said its profits were boosted by higher interest rates, which helped boost its net interest income by 9pc to £7.3bn.

The profit rise prompted renewed calls from unions for a bank tax.

The current bank surcharge sees lenders pay an additional 3pc corporation tax on the profits above £100m. The bank surcharge was reduced from 8pc in April 2023.

Paul Nowak, the general secretary of the Trades Union Congress, said: "This is further proof that we need to increase the bank surcharge."

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