Lloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of Lloyds Bank, established in Birmingham, England in 1765 and traditionally considered one of the Big Four clearing banks, with the TSB Group which traces its origins to 1810.^[1] Lloyds TSB has an extensive network of branches and ATMs across England and Wales and offers 24-hour telephone and online banking services. Today it has 16 million personal customers and small business accounts.^[2] In Scotland, the bank operates as Lloyds TSB Scotland Plc.

Following the acquisition of HBOS in 2008, the parent Lloyds TSB Group was renamed Lloyds Banking Group.^[3] In 2009, following the liquidity crisis, HM Government took a 43.4% stake in Lloyds Banking Group and it was subsequently announced that a standalone retail banking business of 600 branches, including the TSB brand, would be divested by the Group to comply with European Union state aid requirements.^[4] As a consequence, Lloyds TSB Bank will be rebranded as Lloyds Bank by the end of 2013.^[5]

In October 2011, Moody's Analytics downgraded the credit rating of 12 UK financial firms including Lloyds TSB blaming financial weakness.^[6]

History[link]

The bank can trace its roots back to 1765 with the foundation of Taylors and Lloyds in Birmingham. This private bank converted into a joint-stock company in 1865, becoming Lloyds Bank Limited in 1889. Most recently, in 1995, it acquired the demutualised Cheltenham and Gloucester Building Society. The first Trustee Savings Bank had been founded by the Revd. Henry Duncan of Ruthwell, Dumfriesshire in 1810, but it was not until 1985 that the TSB Group was incorporated under the Companies Act.^[7] The creation of the modern bank is often credited to its CEO from 1984 to 1997, Sir Brian Pitman, who helped turn around a struggling institution by focusing on shareholder value. He narrowed the bank's business focus, and reacted to a disastrous experience lending to South American states by trimming its overseas businesses, seeking instead growth through mergers with other UK banks. While Sir Brian did attempt unsuccessfully to acquire Royal Bank of Scotland in 1984, Standard Chartered Bank in 1985, Midland Bank in 1992 and Abbey National in 2001, he was successful in 1995 in merging with Trustee Savings Bank and the Cheltenham & Gloucester building society.^[8][9][10] The creation of the modern bank was announced in 1995 and Lloyds TSB commenced trading in 1998, after the statutory process of integration had been completed.^[11]

Lloyds' three Scottish branches were absorbed into TSB Scotland, which had remained separate to TSB Bank in England and Wales following consolidation. TSB Northern Ireland was disposed to Allied Irish Banks prior to merger in 1991 and, consequently, the bank does not have a presence in Northern Ireland. TSB Channel Islands was integrated into TSB Bank in 1992. Lloyds Bank International merged into Lloyds Bank in 1986 as there was no longer any advantage in operating separately.^[12]

The Scottish Widows Fund and Life Assurance Society demutualised and was subsequently acquired by the Group in 2000.

Services[link]

The Halifax branch of Lloyds on George Square, built 1897.^[13]

The bank offers a full range of banking and financial services. Lloyds TSB Offshore Limited, a wholly owned subsidiary of Lloyds TSB Bank, operates branches in Jersey, Guernsey and the Isle of Man, while Lloyds TSB Bank (Gibraltar) Limited operates in Gibraltar; both trade as Lloyds TSB International.

Lloyds TSB is authorised and regulated by the Financial Services Authority, a member of the Financial Ombudsman Service, the Financial Services Compensation Scheme, the Association for Payment Clearing Services and of the British Bankers' Association; it subscribes to the Banking Code and Business Banking Code. The bank uses the following series of sorting codes:—

Mortgages provided by Lloyds TSB Bank in England and Wales are administered by Cheltenham & Gloucester Plc; Cheltenham & Gloucester and Lloyds TSB Scotland are members of the Council of Mortgage Lenders. Conversely, C&G savings are actually investments in Lloyds TSB Bank. It was announced in 2009 that Lloyds TSB Scotland including additional branches of Lloyds TSB in England and Wales are to be divested by Lloyds Banking Group under the Trustee Savings Bank brand, together with branches (although not the name) of Cheltenham & Gloucester. The process could take up to four years to complete.^[14]

The Lloyds TSB Foundation funds local, regional and national charities working to tackle disadvantage across England and Wales.^[15] There are separate Foundations covering Scotland, Northern Ireland and the Channel Islands.

Dropping credit rating[link]

In October 2011, Lloyds TSB's credit rating was dropped by Moody's from Aa3 to A1.^[16] The action was taken in the light of a shift in government policy to move risk from taxpayers to creditors by reducing the level of support offered to financial institutions.

Controversies[link]

The Teddington branch of Lloyds in Middlesex, designed by Randall Wells in 1929.^[17]

Mistreatment of customers[link]

The methods used by a high-profile Lloyds TSB service (The Collections Dept., based in Southend-on-Sea, Essex, UK), has been strongly criticised by consumer groups and others,^[18] as have manoeuvres allegedly designed to take advantage of legal loopholes to avoid repaying charges levied against its clients.^[19] Lloyds has also been accused of religious discrimination in connection with its overdraft charges.^[20] Dissatisfaction with poor quality public service and inefficient and unfair banking transactions has been a recurring theme for surveys conducted about Lloyds, as well as some other UK High Street banks.^[21]

Senior management team[link]

There has been personal controversy surrounding the former chairman of Lloyds TSB, Sir Victor Blank, following the involvement of lawyers in a dispute with a senior Oxford academic,^[22] as well as other concerns about the Chief Executive Officer of the bank, Eric Daniels.^[23]

Employee relations[link]

The Lloyds Banking Group, which encompasses Lloyds TSB, has been repeatedly criticised for its failure to protect jobs.^[24] By March 2010, it was revealed that 15,000 workers (1 in 5 of the total workforce) had been made redundant.^[25]

Mis-selling of 'precipice' bonds[link]

In 2003, Lloyds TSB was fined £100,000,000 for its part in mis-selling high risk investment bonds.^[26]

Tax evasion and money laundering[link]

In 2009, it was alleged by the BBC Panorama programme that Lloyds TSB Jersey was encouraging wealthier customers to evade paying tax. An employee of Lloyds was filmed telling a customer how several mechanisms had been found to make their transactions invisible to the UK tax authorities.^[27] This action is also in breach of Money Laundering Regulations in Jersey.^[28] Lloyds subsequently claimed that this action was an isolated incident which they were investigating.

Near collapse, toxic assets and direct UK Government assistance[link]

By September 2009 Lloyds Banking Group and the rival RBS had, combined, received £40 billion in direct government aid.^[29] Lloyds has toxic assets totalling £260 billion.^[29]

Response to surging public anger[link]

It was announced in February 2010, that Eric Daniels had declined his personal bonus of £2.3 million in consideration of the intense anger existing amongst the public about the harmful effects to the UK economy of rescuing Lloyds Banking Group from collapse. This is the second year he has not received a bonus. His annual salary of £1 million remains unaffected.^[30]

Highest number of individual complaints via the Financial Ombudsman Service[link]

Lloyds TSB received 9,952 complaints via the UK Financial Ombudsman Service in the last half of 2009. This, when added together with the other constiuent brands of the Lloyds Banking Group (such as Halifax and Bank of Scotland) was twice the number of complaints received by the next most complained-about UK bank(Barclays) although the Financial Ombudsman Service upheld a significantly lower proportion of complaints against Lloyds TSB than it did against Barclays.^[31]

On 14 September 2010 it was announced that Lloyds Banking Group (which includes the Halifax and Bank of Scotland brands) was again the most complained about banking group in the UK, with 22,242 complaints being received by the Financial Ombudsman Service.^[32] Lloyds Banking Group say that this is because the group holds a very large proportion of the current account market.

The "British Weather Photographer of the Year" Controversy[link]

In April 2010 Lloyds TSB Insurance Services launched the "British Weather Photographer of the Year" amateur photography competition, running to 30 September 2010. During late August 2010 it came to light that the home insurance policies promoted by the competition did not cover amateur photographers who abided wholly with the competition terms and conditions.

On 22 September 2010 Mark Humpage, one of four judges in the competition spoke out on the controversy, saying "It is not ethically correct and also undermines my own association with the competition".^[33]

EU Competition Law[link]

The assistance given to Lloyds TSB has raised concerns about unfair advantage.^[29] Neelie Kroes has indicated Lloyds will need to divest large parts of its business to comply with EU regulations.

Links to arms trade[link]

In December 2008 the British anti-poverty charity War on Want released a report documenting the extent to which Lloyds TSB and other UK commercial banks invest in, provide banking services for and make loans to arms companies. The charity writes in its report that Lloyds TSB is the only high street bank whose corporate social responsibility policy does not mention the arms industry. The report claims that Lloyds TSB is the second largest shareholder among high street banks in the arms industry.^[34]

Wikimedia Commons has media related to: Lloyds TSB

References[link]

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External links[link]

• Official website
• Lloyds TSB Foundation
• Lloyds Banking Group

v t e Lloyds Banking Group Banking: Bank of Scotland · Bank of Scotland (Netherlands) · Bank of Scotland International · Birmingham Midshires · Cheltenham & Gloucester · Halifax · Intelligent Finance · Lloyds Bank International · Lloyds TSB · Lloyds TSB Scotland · Sainsbury's Bank · St. James's Place Bank · Scottish Widows Insurance: Clerical Medical · First Alternative · The Mortgage Business · Scottish Widows · Sheilas' Wheels Wholesale: Blackhorse · Lloyds TSB Asset Finance Historical: Trustee Savings Banks Act 1985 · Lloyds TSB Act 1998 · HBOS Group Reorganisation Act 2006 Defunct: Halifax (Ireland) Annual Group Revenue: GB£43.467 billion (2010) · Employees: 104,230 (2010) · Stock Symbol: LSE: LLOY · NYSE: LYG · Website: lloydsbankinggroup.com Category Commons

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