Lloyds Banking Group is to close all 164 of its Cheltenham & Gloucester (C&G) branches across the UK by November and will cut 1,660 jobs, the troubled lender confirmed today.

Lloyds said that 928 jobs will be lost from C&G, with the remainder cut from the Black Horse Personal Loan division.

Lloyds has shed nearly 3,000 jobs since mid-April after its disastrous merger earlier this year with HBOS. Unite, the union, has accused the bank of a embarking on a strategy of “death by a thousand cuts” and urged the bank to “come clean” about the scale of the restructuring.

A spokesman for Lloyds said customers with a Cheltenham & Gloucester mortgage will continue to have their loans under that brand. But some borrowers could be transferred to either Lloyds TSB, Halifax or Bank of Scotland under the same terms and conditions as they had before.

The compete removal of C&G on the high street prompted speculation that the brand - which has been Lloyds' flagship mortgage name - will be closed down over time. Ray Boulger, a mortgage expert at John Charcol, the brokerage, said: "It is inevitable that some brands will disappear".

Following its takeover of HBOS last year, Lloyds has a number of brands in the home loans market, including Halifax, Bank of Soctland, Intelligent Finance, Lloyds and Scottish Widows Bank. Mr Boulger said that in the buy-to-let market alone, Lloyds has three brands - Bank of Scotland, C&G and BM Solutions.

The giant bank controls 30 per cent of the mortgage market. While it may be planning to prune its brands, it is unlikely to cut its share of the market, Mr Boulger said. However, it may come under pressure to shrink by a future Government. The fewer its brands, the more difficult it will be for politicians to enforce a reduction in Lloyds' grip on the market, Mr Boulger said.

A spokesman for Lloyds, which is expected to make a formal announcement on the job cuts today after employees are briefed, said C&G would remain an important brand for the company, but he would not confirm it would retain a branch network.

This morning the Unite's joint leader, Derek Simpson, said:. “News that Lloyds is to close Cheltenham & Gloucester branches, resulting in hundreds of job cuts is nothing short of disgraceful.

“It will rip the heart out of hundreds of local communities up and down the country as customers will see their valued community bank branch close.”

Lloyds is expected to slash more jobs and cut its branch network. It is also expected to cut more brands outside of mortgages and has already said it will phase out its pension and investment brand Clerical Medical over time.

Yesterday, The Times revealed that Lloyds would repay about £2.56 billion to the Government after raising £4.3 billion by selling new shares.

It will become the first bank to repay some of the Government’s £37 billion bailout of the UK bank sector. The early repayment will help to justify the billions of pounds of taxpayers’ money pumped into the banks in the past year.

The repayment is being made far sooner than either the City or the Government could have expected, just eight months after the Treasury had to bail out Lloyds following its controversial takeover of HBOS, its struggling rival.

Shares in Lloyds rose 3.1 per cent to 63p.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive