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Lloyds share price rally goes on

26 August 2009 / by Rebecca Sargent

Lloyds Banking Group's share price rally continued this morning, up a further three per cent, to 111p – a long way off from the all time low of 25p seen in March.

Since the banking giant announced its U-turn decision on the closure of its Cheltenham & Gloucester branches last week, Lloyds' share price has soared.

Other factors that may be tempting investors include plans to reorganise its asset management businesses, which could include the sale of its pensions business, Clerical Medical.

The bank also revealed that it intends to consolidate its investment management business into Scottish Widows Investment Partnership (SWIP), which will "become a centre of excellence for the Group's asset management activity."

Nevertheless, the measures, which have clearly been seen as beneficial by shareholders, will undoubtedly result in further job cuts. The Group said last week, "it is anticipated that as part of this asset management consolidation there will be some role reductions."

So far this year, Lloyds Banking Group has made 7,500 job cuts as it struggles to cope with the impact of HBOS's bad debts. Just yesterday, employees' union Unite criticised the bank over its announcement of another 200 job cuts from the group's insurance arm.

Commenting, Unite national officer, Rob MacGregor said: "We have no confidence in this bank's confused strategy. Only last week LBG decided to abandon the closure of the Cheltenham & Gloucester branch network bringing reprieve for 900 staff. This week it's cutting 200 people."

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