A. On Monday September 9, 2013, Lloyds Banking Group is creating two new banks – Lloyds Bank and TSB. Between September 9 and 11, every one of the UK’s 164 branches of C&G will be rebranded to TSB, alongside 467 Lloyds TSB branches (185 of which are based in Scotland). The remaining Lloyds TSB branches (that’s around 1,300) will be rebranded to Lloyds Bank before the end of September. Lloyds Banking Group also owns HBOS (Halifax and Bank of Scotland) which will remain unaffected by the changes.
Our Editor, Clare Francis catches up with one of TSB’s head honchos, Peter Navin in the new bank’s Wilmslow branch in Cheshire:
Q. Why has it happened?
A. As a condition of Lloyds’ government bailout in 2009, the bank was ordered to sell off a proportion of its branches to comply with EU competition rules. The 631 branches concerned were originally going to be bought by the Co-operative Group but the deal fell through in April this year.
Q. How big is TSB?
A. TSB will still be the eighth largest bank in terms of its branch network size, coming just behind Halifax. It will be double the size of the Royal Bank of Scotland (RBS) branch network.
Q. Who owns TSB?
A. TSB will remain part of Lloyds Banking Group until it is floated on the stock market. At this point it will have nothing to do with Lloyds and will become a public company in its own right. The first stage of this process – an IPO (Initial Public Offer) – is targeted for mid-2014, when an assessment will be made as to what price the shares will be sold at.
Q. What does it mean for customers?
A. The changes described above are big news and will affect nearly 5million customers – but how?
If you are a C&G customer, you will automatically have your accounts transferred to TSB. All products and services – as well as account numbers and sort codes – will remain the same. You can still use your C&G chequebook until it runs out, when you will be sent a new TSB-branded one. The good news is former C&G customers will have access to a current account under TSB (C&G only offered savings and mortgages).
If you are a Lloyds TSB customer at one of the affected 467 branches, you will have a choice about whether you want to be transferred to Lloyds Bank or TSB depending on which branch is most convenient for you. So far, an estimated 1,000 customers due to stay with Lloyds have requested to be transferred to TSB. If you don’t state a preference though, you will be automatically moved to TSB. Again, all your accounts including sort codes and account numbers will remain the same.
Staff in the 631 branches that are transferring to TSB will stay put, which means customers will receive the same service from the same people.
Q. Will TSB operate under its own banking licence?
A. TSB will use the Lloyds TSB Scotland banking licence, which is separate from the main Lloyds Banking Group licence. From September 9, the Lloyds TSB Scotland banking licence will be renamed TSB Bank plc.
Q. Will TSB launch any new products?
A. Not initially. Deals available at TSB will mirror those available at Lloyds, though there may be variations in name. Lloyds Vantage current accounts for example, will be re-named Enhance. It’s likely to be the New Year before any new deals are launched as Lloyds is looking for as much consistency as possible in the initial transfer stages. However, with retail banking becoming more competitive, it’s worth keeping your ear to the ground.
Q. What else can I expect from TSB?
A. TSB says it will increase competition by being more service-focused. For example, if a struggling first-time buyer is rejected for a mortgage, TSB will help them check their credit score rather than just suggesting they do it themselves. TSB also wants to be seen to be doing its bit for the community. Some branches, for example, will have a wifi-enabled meeting space you can book if you are setting up a local business.