Key Points
• Lloyds Banking Group plans to shut its invoice factoring and discounting unit by end-2025.
• Decision affects Commercial Finance business serving small and medium-sized firms.
• Existing clients to be run off or transferred as part of an orderly exit.
ISLAMABAD: Britain’s largest mortgage lender, Lloyds Banking Group, is set to close its invoice factoring and invoice discounting unit by the end of this year as part of a wider effort to simplify operations and focus on core banking activities, the Financial Times reported on Sunday.
According to the report, Lloyds has informed staff and customers that the Commercial Finance division, which provides invoice-based lending mainly to small and medium-sized businesses, will be wound down in an orderly manner. The group does not plan to take on new clients and will either run off existing facilities or transfer customers to alternative providers.
The report cited people familiar with the matter as saying the move reflects Lloyds’ assessment that invoice finance no longer fits with its long-term strategic priorities. The unit, which was expanded after the financial crisis as banks sought asset-backed lending opportunities, represents a small part of Lloyds’ overall balance sheet.
According to a spokesperson quoted by the Financial Times, the bank was committed to supporting affected customers and colleagues through the transition, adding that the decision followed a review of the business portfolio and capital allocation.
The closure comes at a time when UK banks are under pressure to improve returns, cut costs and sharpen their focus on products that offer scale and stable income. Invoice factoring, which involves advancing funds against unpaid customer invoices, has faced intensifying competition from specialist lenders and fin-tech firms in recent years.
Lloyds, which is majority focused on the UK market, has been reshaping its commercial banking operations under chief executive Charlie Nunn, and placing greater emphasis on transaction banking, deposits and digital services. The planned exit from invoice finance is expected to result in a limited number of job losses, although the bank aims to redeploy staff where possible, the report added.
