Northern Rock announced it was cutting 1300 jobs yesterday and Lloyds TSB reported a 70% fall in profits as the credit crunch continued to make its impact felt in the banking sector.
Lloyds TSB, which owns Scottish Widows, said its pre-tax profit for the first six months of the year fell to £599m compared to £1993m for the same period last year as it wrote off investments linked to the credit markets.
It also warned that house prices could fall by up to 15% this year, meaning it might have to put upwards of £100m aside to cover bad debts on its mortgages.
Northern Rock, which was nationalised in February, confirmed plans to cut 2000 jobs by 2011. It said 1300 positions would go through redundancy, some 500 of them voluntary, with the rest achieved by not replacing departing staff.
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