Lloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of
Lloyds BankLloyds Bank Plc was a British retail bank which operated in England and Wales from 1765 until its merger into Lloyds TSB in 1995; it remains a registered company but is currently dormant. It expanded during the nineteenth and twentieth centuries and took over a number of smaller banking companies...
, established in
BirminghamBirmingham is a city and metropolitan borough in the West Midlands of England. It is the most populous British city outside the capital London, with a population of 1,036,900 , and lies at the heart of the West Midlands conurbation, the second most populous urban area in the United Kingdom with a...
,
EnglandEngland is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
in 1765 and traditionally considered one of the
Big FourBig Four is the colloquial name for the four main banks in several countries, where the banking industry is dominated by just four institutions and where the phrase has gained currency.-Australia:...
clearing banks, with the
TSB GroupThe Trustee Savings Bank was a British financial institution which specialised in accepting savings deposits from the poor. They did not trade their shares on the stock market and, unlike mutually held building societies, depositors had no voting rights nor the ability to direct the financial and...
which traces its origins to 1810. 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. In Scotland, the bank operates as
Lloyds TSB Scotland Plc.
Following the acquisition of
HBOSHBOS plc is a banking and insurance company in the United Kingdom, a wholly owned subsidiary of the Lloyds Banking Group having been taken over in January 2009...
in 2008, the parent Lloyds TSB Group was renamed
Lloyds Banking GroupLloyds Banking Group plc is a major British financial institution, formed through the acquisition of HBOS by Lloyds TSB in 2009. As at February 2010, HM Treasury held a 41% shareholding through UK Financial Investments Limited . The Group headquarters is located at 25 Gresham Street in London, with...
. In 2009, following the
liquidity crisisA bank rescue package totalling some £500 billion was announced by the British government on 8 October 2008, as a response to the ongoing global financial crisis. After two unsteady weeks at the end of September, the first week of October had seen major falls in the stock market and severe worries...
, 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 UnionThe European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
state aid requirements. As a consequence, Lloyds TSB Bank will be rebranded as Lloyds Bank by the end of 2013.
In October 2011,
Moody's AnalyticsMoody’s Analytics provides capital markets and risk management professionals with credit analysis, economic research, financial risk management software, and advisory services...
downgraded the credit rating of 12 UK financial firms including Lloyds TSB blaming financial weakness.
History
The bank can trace its roots back to 1765 with the foundation of Taylors and Lloyds in
BirminghamBirmingham is a city and metropolitan borough in the West Midlands of England. It is the most populous British city outside the capital London, with a population of 1,036,900 , and lies at the heart of the West Midlands conurbation, the second most populous urban area in the United Kingdom with a...
. 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
RuthwellRuthwell is a village and parish on the Solway Firth between Dumfries and Annan in Dumfries and Galloway, Scotland.Ruthwell's most famous inhabitant was the Rev. Dr. Henry Duncan. He was a minister, author, antiquarian, geologist, publisher, philanthropist, artist and businessman.In 1810, Dr...
,
DumfriesshireDumfriesshire or the County of Dumfries is a registration county of Scotland. The lieutenancy area of Dumfries has similar boundaries.Until 1975 it was a county. Its county town was Dumfries...
in 1810, but it was not until 1985 that the TSB Group was incorporated under the
Companies ActThe Companies Act 1985 is an Act of the Parliament of the United Kingdom of Great Britain and Northern Ireland, enacted in 1985, which enabled companies to be formed by registration, and set out the responsibilities of companies, their directors and secretaries.The Act was a consolidation of...
. 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 ScotlandThe Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
in 1984,
Standard Chartered BankStandard Chartered PLC is a multinational financial services company headquartered in London, United Kingdom with operations in more than seventy countries...
in 1985,
Midland BankMidland Bank Plc was one of the Big Four banking groups in the United Kingdom for most of the 20th century. It is now part of HSBC. The bank was founded as the Birmingham and Midland Bank in Union Street, Birmingham, England in August 1836...
in 1992 and
Abbey NationalAbbey National plc was a UK-based bank and former building society, which latterly traded under the Abbey brand name. It became a wholly owned subsidiary of Grupo Santander of Spain in 2004, and was rebranded as Santander in January 2010, forming Santander UK along with the savings business of the...
in 2001, he was successful in 1995 in merging with Trustee Savings Bank and the Cheltenham & Gloucester building society. 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.
Lloyds' three Scottish branches were absorbed into TSB Scotland, which had remained separate to TSB Bank in England and Wales following consolidation.
TSB Northern IrelandFirst Trust Bank, part of the AIB Group, is a commercial bank in Northern Ireland. The bank was created in 1991 when TSB Northern Ireland merged with the AIB Group's other interests. The bank can trace its existence back to 1816 with the founding of the Belfast Savings Bank...
was disposed to
Allied Irish BanksAllied Irish Banks p.l.c. is a major commercial bank based in Ireland.AIB is one of the so called "big four" commercial banks in the state. The bank has one of the largest branch networks in Ireland; only Bank of Ireland fully rivals it. AIB offers a full range of personal and corporate banking...
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.
The
Scottish WidowsScottish Widows plc is a life, pensions and investment company located in Edinburgh, Scotland, and is a subsidiary of Lloyds Banking Group. Its product range includes life assurance, pensions, investments and savings...
Fund and Life Assurance Society demutualised and was subsequently acquired by the Group in 2000.
Services
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
JerseyJersey, officially the Bailiwick of Jersey is a British Crown Dependency off the coast of Normandy, France. As well as the island of Jersey itself, the bailiwick includes two groups of small islands that are no longer permanently inhabited, the Minquiers and Écréhous, and the Pierres de Lecq and...
,
GuernseyGuernsey, officially the Bailiwick of Guernsey is a British Crown dependency in the English Channel off the coast of Normandy.The Bailiwick, as a governing entity, embraces not only all 10 parishes on the Island of Guernsey, but also the islands of Herm, Jethou, Burhou, and Lihou and their islet...
and the
Isle of ManThe Isle of Man , otherwise known simply as Mann , is a self-governing British Crown Dependency, located in the Irish Sea between the islands of Great Britain and Ireland, within the British Isles. The head of state is Queen Elizabeth II, who holds the title of Lord of Mann. The Lord of Mann is...
, while Lloyds TSB Bank (Gibraltar) Limited operates in
GibraltarGibraltar is a British overseas territory located on the southern end of the Iberian Peninsula at the entrance of the Mediterranean. A peninsula with an area of , it has a northern border with Andalusia, Spain. The Rock of Gibraltar is the major landmark of the region...
; both trade as Lloyds TSB International.
Lloyds TSB is authorised and regulated by the
Financial Services AuthorityThe Financial Services Authority is a quasi-judicial body responsible for the regulation of the financial services industry in the United Kingdom. Its board is appointed by the Treasury and the organisation is structured as a company limited by guarantee and owned by the UK government. Its main...
, a member of the
Financial Ombudsman ServiceThe United Kingdom's Financial Ombudsman Service is an ombudsman established in 2001 as a result of the Financial Services and Markets Act 2000 to help settle disputes between consumers and UK-based businesses providing financial services, such as banks, building societies, insurance companies,...
, the
Financial Services Compensation SchemeThe Financial Services Compensation Scheme is a "statutory fund of last resort" in the United Kingdom, set up under the Financial Services and Markets Act 2000 to compensate customers of "authorised financial services firms" in the event of their insolvency. It consolidated previous compensation...
, the
Association for Payment Clearing ServicesThe UK Payments Administration Ltd is a United Kingdom trade organisation that brings together all payment systems organisations and gives banks, building societies and card issuers a forum where they can work together on non-competitive issues...
and of the
British Bankers' AssociationThe British Bankers’ Association is the trade association which represents the banks operating within the United Kingdom.-History:It was set up in 1919. In 1972 it accepted foreign banks...
; it subscribes to the
Banking CodeThe Banking Code was a voluntary code of practice agreed by United Kingdom banks.On 1 November 2009 the Financial Services Authority Banking Conduct Regime commenced...
and Business Banking Code. The bank uses the following series of sorting codes:—
| Range |
Note |
| 30 to 39 |
former Lloyds branches |
77-00 to 77-44
77-46 to 77-99 |
former TSB branches |
| 87 |
Lloyds TSB Scotland |
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 LendersThe Council of Mortgage Lenders is an industry body representing mortgage lenders in the United Kingdom.Its members consist of banks, building societies and specialist lenders and represent 98% of mortgage lending in the UK....
. 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.
The Lloyds TSB Foundation funds local, regional and national charities working to tackle disadvantage across England and Wales. There are separate Foundations covering Scotland, Northern Ireland and the Channel Islands.
Dropping credit rating
In October 2011, Lloyds TSB's credit rating was dropped by Moody's from Aa3 to A1. 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
Mistreatment of customers
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, as have manoeuvres allegedly designed to take advantage of legal loopholes to avoid repaying charges levied against its clients. Lloyds has also been accused of religious discrimination in connection with its overdraft charges. 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.
Senior management team
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, as well as other concerns about the
Chief Executive OfficerA chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of the bank,
Eric DanielsJohn Eric Daniels is an American banker and former chief executive officer of Lloyds Banking Group.-Early life:...
.
Employee relations
The
Lloyds Banking GroupLloyds Banking Group plc is a major British financial institution, formed through the acquisition of HBOS by Lloyds TSB in 2009. As at February 2010, HM Treasury held a 41% shareholding through UK Financial Investments Limited . The Group headquarters is located at 25 Gresham Street in London, with...
, which encompasses Lloyds TSB, has been repeatedly criticised for its failure to protect jobs. By March 2010, it was revealed that 15,000 workers (1 in 5 of the total workforce) had been made redundant.
Mis-selling of 'precipice' bonds
In 2003, Lloyds TSB was fined £100,000,000 for its part in mis-selling high risk investment bonds.
Tax evasion and money laundering
In 2009, it was alleged by the
BBCThe British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...
PanoramaPanorama is a BBC Television current affairs documentary programme, which was first broadcast in 1953, and is the longest-running public affairs television programme in the world. Panorama has been presented by many well known BBC presenters, including Richard Dimbleby, Robin Day, David Dimbleby...
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. This action is also in breach of
Money LaunderingMoney laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
Regulations in
JerseyJersey, officially the Bailiwick of Jersey is a British Crown Dependency off the coast of Normandy, France. As well as the island of Jersey itself, the bailiwick includes two groups of small islands that are no longer permanently inhabited, the Minquiers and Écréhous, and the Pierres de Lecq and...
. Lloyds subsequently claimed that this action was an isolated incident which they were investigating.
Near collapse, toxic assets and direct UK Government assistance
By September 2009 Lloyds TSB and the rival
HBOSHBOS plc is a banking and insurance company in the United Kingdom, a wholly owned subsidiary of the Lloyds Banking Group having been taken over in January 2009...
had, combined, received £40 billion in direct government aid. Lloyds has
toxic assetToxic asset is a popular term for certain financial assets whose value has fallen significantly and for which there is no longer a functioning market, so that such assets cannot be sold at a price satisfactory to the holder...
s totalling £260 billion.
Response to surging public anger
It was announced in February 2010, that
Eric DanielsJohn Eric Daniels is an American banker and former chief executive officer of Lloyds Banking Group.-Early life:...
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.
Highest number of individual complaints via the Financial Ombudsman Service
Lloyds TSB received 9,952 complaints via the UK
Financial Ombudsman ServiceThe United Kingdom's Financial Ombudsman Service is an ombudsman established in 2001 as a result of the Financial Services and Markets Act 2000 to help settle disputes between consumers and UK-based businesses providing financial services, such as banks, building societies, insurance companies,...
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.
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. 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
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".
EU Competition Law
The assistance given to Lloyds TSB has raised concerns about unfair advantage.
Neelie KroesNeelie Kroes is a Dutch politician of the People's Party for Freedom and Democracy . She served as a Member of the House of Representatives from 3 August 1971 until 28 December 1977 when she became State Secretary for Transport, Public Works and Water Management from 28 December 1977 until 11...
has indicated Lloyds will need to divest large parts of its business to comply with EU regulations.
Links to arms trade
In December 2008 the British anti-poverty charity
War on WantWar on Want is an anti-poverty charity based in London, England. It seeks to highlight the needs of poverty-stricken areas around the world and lobbies governments and international agencies to tackle problems as well as raising public awareness of the concerns of developing nations while...
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.
External links