Everything about Lloyds Tsb totally explained
Lloyds TSB Group plc is a leading financial institution with a London based head office and operations that span the globe including the US, Europe, Middle East and Asia. Its individual business units provide an extensive range of financial products and services, both in the United Kingdom and overseas. It was formed in 1995 by the merger of
Lloyds Bank and the
Trustee Savings Bank (TSB). The Group's head office is at 25
Gresham Street,
London.
Lloyds TSB is currently the fifth largest banking group in the UK, operating in
England and Wales as Lloyds TSB; and in
Scotland as Lloyds TSB Scotland. Its other subsidiaries include the mortgage bank
Cheltenham and Gloucester; life assurance company
Scottish Widows; and finance house
Black Horse.
Lloyds TSB Group's activities are organised into three businesses: UK Retail Banking and Mortgages, Insurance and Investments, and Wholesale and International Banking. At the end of 2006, Group Assets totalled £343,598 million, and the organisation employed over 63,000 staff. Lloyds TSB provides a service to a large number of clients in a broad range of markets. The organisation has a Triple A (
Moody's) rating.
History
Formation
Lloyds TSB was created in 1995, when the Lloyds Bank and the Trustee Savings Bank ("TSB") agreed to merge their operations, creating at that time the second largest bank in the UK by market capitalisation after
HSBC Holdings; and the largest by market share.
Lloyds Bank was one of the oldest banks in the UK, formed in
1765 in
Birmingham. Through a series of mergers Lloyds emerged to become one of the
Big Four banks in the UK.
In contrast TSB was created in 1985, by an Act of Parliament that merged together all (except
Airdrie Savings Bank) the remaining savings banks in Great Britain under TSB Bank plc. However the TSB could trace its roots back to the first savings bank founded by
Henry Duncan in
Ruthwell,
Dumfriesshire in
1810.
UK expansion
The creation of Lloyds TSB was the beginning of a large scale consolidation in the UK banking market. In 1995, the merger between TSB and Lloyds Bank formed Lloyds TSB Group plc, one of the largest forces in domestic banking.
In June 1999, TSB and Lloyds Bank branches in England and Wales were re-branded Lloyds TSB. Branches in Scotland came under the new brand of Lloyds TSB Scotland, which now has branches stretching from the Northern Isles to the Mull of Galloway.
In 2000, the group acquired
Scottish Widows, a mutual life assurance company based in Edinburgh in a deal worth £7 billion.
(External Link
) This made the group the second largest provider of life assurance and pensions in the UK after the
Prudential. In September the same year, Lloyds TSB purchased Chartered Trust from the
Standard Chartered Bank for
£627m to form Lloyds TSB Asset Finance Division which provides motor, retail and personal finance in the
United Kingdom under the trading name Black Horse.
Lloyds TSB continued to take part in the consolidation, making a takeover bid for the
Abbey National in 2001, although this was later rejected by the
Competition Commission.
In October 2003, Lloyds TSB Group agreed the sale of its subsidiary, NBNZ Holdings Limited comprising the Group's New Zealand banking and insurance operations to Australia and New Zealand Banking Group Limited.
In July 2004, Lloyds TSB Group announced the sale of its business in Argentina to Banco Patagonia Sudameris S.A and its business in Colombia to Primer Banco del Istmo, S.A.
Most recently, on 20 December 2005, Lloyds TSB announced that it had reached an agreement to sell, for cash, the credit card business of Goldfish to Morgan Stanley Bank International Limited for a premium of G.B.P.175 million.
As at 31 December 2006, Lloyds TSB Group's total group assets were £344 billion and there were some 63,000 employees. Lloyds TSB Group plc's market capitalisation as at that date was some £32 billion.
In 2007, Lloyds TSB announced that it has sold its Abbey Life insurance division to Deutsche Bank for £977m. Lloyds TSB also became the first mainstream bank to launch a sharia-compliant business account, with the Islamic Business and Corporate account being the latest financial product to be run in line with sharia principles. Other range of Islamic finance services included the launch of the sharia student account. Truett Tate, group executive director of wholesale and international banking at Lloyds TSB, said: "The entrepreneurial spirit in the UK is truly something to be proud of, and Muslim businesses are making a phenomenal contribution to this through their creativity and incredible work ethic. Britain is rapidly establishing itself as a centre of Islamic finance and Lloyds TSB has been at the forefront of this growth."
Financial difficulties and successes
At the time of creation, Lloyds TSB was the largest bank in the UK and Europe. However it has lagged behind the growth of other UK banks, most notably the
Royal Bank of Scotland. An acquisition of
Scottish Widows Life Assurance Society was judged to be poor value for money. Poor performance led the bank to dispose of many overseas assets, namely the Brazilian and New Zealand operations.
However recent performance by Lloyds TSB reported full-year profits before tax of £4.25bn ($8.3bn), up 11% from 2005, unveiled its highest profit growth in a decade and announced its first dividend rise for five years. Signifying a turnaround in fortune and a drive in expansion. Lloyds has been investing heavily in its wholesale and international banking division, which put in a strong performance, driven by corporate markets, with profits up by 12%. The business isn't exposed to the US sub-prime related derivatives that have affected other banks.
Sponsorships
March 2007 was a milestone in the history of Lloyds TSB as It's symbolic that they were the first Official Partner for London 2012 Olympic Games worth £80 million. Along the way beating Barclays, HSBC, Bank of America and Citigroup to become the leading financial services sponsor.
Lloyds TSB's vision for partnership with London 2012 is “to inspire and support young people, communities and businesses all over Britain on their journey to the 2012 Olympic and Paralympic Games and beyond.” Lloyds TSB will focus on two key areas - youth and bringing the Games to the wider community.
Lloyds TSB is also currently the official sponsor for the Asian Jewel Awards. The awards recognise and celebrate the wealth of experience, expertise, success as well as the significant and valuable contribution made by the Asian community in Britain today, covering all aspects of the community including Business and Commerce, Entrepreneur, Professionals, Public Service, Media, Healthcare and Education and Lifetime Achievement. An example of this support is the bank's open sponsorship of the young and talented Peter Santamaria-Woods
(External Link), who has displayed much potential in the field of motor racing. This demonstrates Lloyds TSB's support of the Asian Community in Britain.
Group structure
- UK Retail Banking - Helen Weir, Group Executive Director
- Provides a full range of banking and financial services to some 16 million personal customers through over 2,000 branches across the UK, as well as telephone and internet banking services. Cheltenham & Gloucester is the Group's specialist residential mortgage provider, selling its products through branches of C&G and Lloyds TSB Bank in England and Wales. The Group is one of the largest mortgage lenders in the UK, with a market share of 8.8 per cent as at the end of 2006. Profit before tax from UK Retail Banking in 2006 was £1,549 million.
- Lloyds TSB Bank - England and Wales
- Lloyds TSB Scotland - Scotland
- Cheltenham and Gloucester- mortgage and savings bank
- Scottish Widows Bank - direct banking arm of Scottish Widows
Insurance and Investments - Archie G Kane, Group Executive Director
- Scottish Widows is the Group's specialist provider of life assurance, pensions and investment products, distributed through the Lloyds TSB branch network, through independent financial advisers and directly via the telephone and the internet. Insurance and Investments also includes general insurance underwriting and broking, and fund management. Profit before tax from Insurance and Investments in 2006 was £950 million.
Wholesale and International Banking - G Truett Tate, Group Executive Director
- Provides banking and related services for major UK and multinational corporates and financial institutions, and small and medium-sized UK businesses. It also provides asset finance and manages Lloyds TSB Group's activities in financial markets through its treasury function and provides banking and financial services overseas. Profit before tax from Wholesale and International Banking in 2006 was £1,640 million.
Awards and recognition
In April 2008, Lloyds TSB Corporate Markets was recognised as ‘Bank of the Year’ for the fourth year
running. It has also been awarded‘Adviser of the Year’ at the 2006 Finance Directors’ Excellence Awards, hosted by the CBI and
Real Finance magazine.
In June 2006 the Group’s Equality & Diversity race equality programme beat over 100 top-flight companies
to came first for the 2nd year in a row in the Race for Opportunity’s (RfO) annual survey. The survey is the
most highly regarded race equality study in the UK. All of the key strands of Lloyds TSB's equality and
diversity programme have won national recognition.
In July 2007, Euromoney announced Lloyds TSB as winners of its Awards for Excellence – the most prestigious awards in the global banking industry. It cited Lloyds TSB’s growing market share in the mortgage business as well as maintaining good asset quality vis a vis its major competitors. Lloyds TSB has also improved its capital efficiency and freed up a significant portion of its balance sheet by securitising more of its portfolio into the capital markets in the past 12 months. Euromoney further noted that “In a sea of unspectacular results Lloyds TSB’s performance deserves much credit.”
Following the Credit Crunch of 2008, this policy of heavy securitisation pursued by Lloyds among other banks, has been heavily criticised as irresponsible.
In popular culture
In January 2008, Lloyds TSB received the unusual recognition of being the first ever commercial business to see a single enter the UK top 40 in support of a public campaign against it. "I Fought the Lloyds" by Oystar was based on the song made famous by The Clash and adapted as a humorous song in support of those campaigning to get their bank charges refunded by Lloyds.
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