Lloyds Banking Group is to cut 15,000 jobs and halve its international presence under a radical overhaul by its new chief executive aimed at returning the part-nationalised British bank back to health.

Lloyds said today it will deliver £1.5 billion of annual savings by 2014, which would allow it to invest an extra £2 billion in its core retail banking activities. The cost of the programme will be £2.3 billion.

The bank aims to cut its international presence to under 15 countries by 2014 from 30 now.

Lloyds announced the winding down of Bank of Scotland (Ireland) as a licensed bank last year and the transfer of the existing business to Bank of Scotland in the UK.

New chief executive Antonio Horta-Osorio, whom Lloyds poached from rival Santander UK, said his plan will create a more agile organisation by cutting through middle management, centralising control functions, and creating a simpler legal structure.

"We will unlock the potential in this franchise over time by creating a simpler, more agile and responsive organisation, and by making substantial investments in better-value products and services for our customers, to deliver strong, stable and sustainable returns for our shareholders," Mr Horta-Osorio said in a statement.

Lloyds, 41 per cent owned by the British government after needing to be bailed out during the financial crisis and with 30 million customers, said it will "revitalise" the bank, including the Halifax brand it inherited after its troubled 2008 takeover of HBOS.

Bancassurance will remain a core part of the group and it said it plans to restart a progressive dividend payments once it is allowed to do so.

Lloyds and Royal Bank of Scotland were bailed out and part-nationalised by the British government during the credit crisis. Britain ended up with a 40.6 per cent stake in Lloyds and around 83 per cent of RBS.

Lloyds shares closed up 1.1 per cent at 44.66 pence yesterday.

Reuters