The boss of Lloyds Banking Group has warned that bankers will need to “reskill themselves” to survive the oncoming AI boom that stands to transform the financial services sector.
Charlie Nunn told reporters on Thursday that while he could not predict the full impact that AI would have over the next decade, it was clear that banks would be hiring staff with very different skill sets going forward. “This is going to radically change how customers experience financial services,” he said, meaning banks like Lloyds would “have to support colleagues to re-skill themselves”.
He acknowledged the bank would have to “reduce some jobs in some areas”, but played down forecasts by Morgan Stanley, which last month said more than 200,000 European bank jobs could be axed by 2030 due to AI adoption and branch closures.
“The reality is we don’t quite know how to play out in the medium term, and I think that’s where you see the larger numbers being forecast,” Nunn said. “It’s not that we’re trying to hide anything. But at this stage that’s not what we’re seeing specifically around generative AI – although I do think it will be transformational.”
Lloyds has provided a rare insight into the financial impact of its AI use, saying generative AI – which creates new content based on patterns in vast, existing datasets – provided a £50m boost to its balance sheet last year.
That involved using AI to process complaints, which were now categorised in one second rather than five minutes, and halve the amount of time spent on coding. “AI is a once-in-a-generation opportunity, and one the group is grasping for our customers,” Nunn said.
The bank expects the financial benefit to double in 2026 to more than £100m, as Lloyds embraces agentic AI: a more autonomous model that can proactively plan and execute tasks with minimal human oversight.
As for potential job losses, Nunn said: “We always take that very, very seriously and support those colleagues. But I do see that there’s lot of new roles and skills we need, and we are investing in those.”
It came as the investment minister, Jason Stockwood, said the UK could introduce a universal basic income to protect workers being disrupted by AI. While not part of official government policy, Stockwood told the Financial Times: “People are definitely talking about it.”
But Nunn suggested tech-related change was inevitable, recalling how his first job involved building electronic trading floors which ultimately helped automate wholesale banking throughout the 1990s. “We’ve seen radical efficiency improvements, and reallocation of talent and skills, through financial services for my whole 34 years I’ve been doing this job,” he said.
Lloyds on Thursday reported a 12% rise in pre-tax profits to £6.7bn for 2025, as a rise in lending and income from fee-generating parts of its operations including insurance helped offset the impact of falling interest rates last year. The better than expected rise in profits allowed Lloyds to pay shareholders another dividend worth 2.43p a share and launch a new £1.75bn share buyback programme.
Lloyds’ profit growth was due in part to a rise in mortgage lending. Nunn told BBC’s Radio 4 programme that Lloyds – which owns the Halifax brand and is the largest mortgage lender in the UK – had seen “strong volumes” and “good demand” for home loans.
“We’ve seen interest rates come down a bit and we are expecting two or more interest rate cuts this year,” he said. “Obviously as an industry, and as Lloyds Bank, we’ve been innovating around how we provide affordability and access to mortgages, which has supported that growth.”
