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Lloyds Bank

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Lloyds TSB Group plc
Company typePublic (LSE: LLOY, NYSE: LYG)
IndustryBanking
Founded1995
(Lloyds Bank: 1765)
(Trustee Savings Bank: 1810)
Headquarters
London
,
England, UK
Key people
Sir Victor Blank, Chairman
Eric Daniels, Chief Executive
ProductsBanking
Investment banking
Insurance
Revenue£16,874 million GBP (2007)
£5,139 million GBP (2007)
£3,321 million GBP (2007)
Number of employees
74,000 (2006)
Websitelloydstsb.com

Lloyds TSB Group plc (LSE: LLOY, NYSE: LYG) is a leading British 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).[1] 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. 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.

On 17 September 2008, UK banking and insurance group HBOS confirmed that it was in advanced takeover talks with Lloyds TSB about a deal to merge. [2] These talks arose following a run on the share price of HBOS connected with the subprime mortgage credit crisis and short selling of shares[3]. Later in the day it was announced that Lloyds TSB had agreed to buy HBOS for 232p per share.[4] On 18 September, Lloyds TSB confirmed the £12.2 billion deal.[5]

History

Formation

See also: Lloyds Bank and Trustee Savings Bank

Lloyds TSB was created in 1995, when the Lloyds Bank and the Trustee Savings Bank ("TSB") agreed to merge their operations,[1] 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, founded by John Taylor and Sampson Lloyd in 1765 in Birmingham.[6] Through a series of mergers Lloyds emerged to become one of the Big Four banks in the UK.

The TSB can trace its roots back to the first savings bank founded by Henry Duncan in Ruthwell, Dumfriesshire in 1810. The TSB itself 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. [7]

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.[1]

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.[8] 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.[9]

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.[10]

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.[11]

In July 2004, Lloyds TSB Group announced the sale of its business in Argentina to Banco Patagonia Sudameris S.A[12] 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.[13]

In 2007, Lloyds TSB announced that it has sold its Abbey Life insurance division to Deutsche Bank for £977m.[14]

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.[15]

Takeover of HBOS

On 17 September 2008 the BBC reported that HBOS was in merger talks with Lloyds TSB, in response to a precipitous drop in HBOS's share price connected to the credit crunch due to the subprime mortgage crisis.[16] The talks concluded successfully that evening, creating a banking giant which will hold a third of the UK mortgage market.[17]

Operations

The Teddington branch of Lloyds

The Group is organised as follows:

  • UK Retail Banking - Helen Weir, Group Executive Director[18]
    • 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 (throughout Great Britain) 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[19]
    • 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[20]
    • 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.[21]

In June 2008, Lloyds TSB came top in the Race for Opportunity’s (RfO) annual survey.[22]

In July 2007, Euromoney announced Lloyds TSB as the winners of its Awards for Excellence.[23]

Sponsorships

Lloyds TSB was appointed the first Official Partner for the London Olympics 2012.[24]

Lloyds TSB is also currently the official sponsor for the Asian Jewel Awards. The awards recognise the contribution made by the Asian community in Britain today. An example of this support is the bank's sponsorship of Peter Santamaria-Woods in motor racing.[25]

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. [citation needed]

Lloyds had previously featured in a Manic Street Preachers song "Natwest-Barclays-Midlands-Lloyds", the second track on their album Generation Terrorists, a song critical of capitalism and banks pushing consumer debt.

References

  1. ^ a b c "Lloyds Bank to merge with TSB". New York Times. 1995-10-12. Retrieved 2008-09-17.
  2. ^ "HBOS confirms in takeover talks with Lloyds TSB". 2008-09-17. Retrieved 2008-09-17.
  3. ^ http://news.sky.com/skynews/Home/Business/HBOS-Problems-Who-Is-To-Blame-For-Banks-Problems-Expert-Alistair-Milne-Cass-Business-School/Article/200809315102368?lpos=Business_News_Your_Way_Region_5&lid=ARTICLE_15102368_HBOS_Problems%3A_Who_Is_To_Blame_For_Banks_Problems%2C_Expert_Alistair_Milne_Cass_Business_School
  4. ^ "Lloyds TSB seals merger with HBOS". 2008-09-17. Retrieved 2008-09-17.
  5. ^ "Lloyds TSB unveils HBOS takeover". BBC News. 2008-09-18. Retrieved 2008-09-18.
  6. ^ "Lloyds BankHistory". Lloyds TSB. Retrieved 2008-09-17.
  7. ^ "TSB Bank History". Lloyds TSB. Retrieved 2008-09-17.
  8. ^ "Lloyds TSB buys Scottish Widows". 1999-06-23. Retrieved 2008-09-17. {{cite web}}: Unknown parameter |publishre= ignored (help)
  9. ^ "Standard Chartered wins $1.3bn Chase deal". The Independant. 2000-09-02. Retrieved 2008-09-17.
  10. ^ "Report damns Lloyds TSB's bid for Abbey National". The Telegraph. 2001-03-14. Retrieved 2008-09-17.
  11. ^ "Lloyds TSB confirms possible sale of National Bank". NZ Herald. 2003-06-17. Retrieved 2008-09-17.
  12. ^ "Banco Hiptecario Prospectus Page 118" (PDF). Banco Hiptecario. 2007. Retrieved 2008-09-17.
  13. ^ "Lloyds TSB sells Goldfish brand". BBC News. 2005-12-20. Retrieved 2008-09-17.
  14. ^ "Lloyds TSB sells Abbey Life for £1bn". Finanical Advisor. 2007-07. Retrieved 2008-09-17. {{cite web}}: Check date values in: |date= (help)
  15. ^ "Lloyds TSB launches Sharia Business Account". The Guardian. 2007-04-03. Retrieved 2008-09-17.
  16. ^ "HBOS confirms Lloyds merger talks". BBC News. 2008-09-17. Retrieved 2008-09-17.
  17. ^ "Lloyds TSB Seals Merger with HBOS". BBC News. 2008-09-17. Retrieved 2008-09-17.
  18. ^ "Retail Banking". Lloyds TSB. Retrieved 2008-09-18.
  19. ^ "Insurance and Investments". Lloyds TSB. Retrieved 2008-09-18.
  20. ^ "Wholesale and International Banking". Lloyds TSB. Retrieved 2008-09-18.
  21. ^ "Real FD Awards". Retrieved 2008-09-17.
  22. ^ "Lloyds TSB tops workforce diversity chart". Retrieved 2008-09-17.
  23. ^ "SLloyds TSB - Best Bank Award". Retrieved 2008-09-17.
  24. ^ "Lloyds TSB - London Olympics 2012". Retrieved 2008-09-17.
  25. ^ "Santamaria-Woods Sponsors". Retrieved 2008-09-17.

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