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Lloyds Bank

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Not to be confused with Lloyd's of London, Lloyd's List, Lloyd's Register, or Lloyd Banks.
"Lloyds TSB" redirects here. For the Trustee Savings Bank that was later demerged, see TSB Bank (United Kingdom).
For other uses, see Lloyds Bank (disambiguation).

Lloyds Bank plc
Company typePublic limited company
IndustryFinancial services
Founded1765 (in Birmingham)
1995 (as Lloyds TSB)
2013 (as Lloyds Bank)
Headquarters
25 Gresham Street
London EC2V 7HN
,
United Kingdom
Key people
Lord (Norman) Blackwell (chairman)
Antonio Horta-Osorio (chief executive) [1]
ProductsBanking and insurance
Number of employees
45,856
ParentLloyds Banking Group
SubsidiariesLloyds Bank International Limited
Lloyds Bank (Gibraltar) Limited
Websitewww.lloydsbank.com

Lloyds Bank plc is a British retail bank with branches across England and Wales. It has traditionally been considered one of the "Big Four" clearing banks.[2] Originally founded in Birmingham in 1765, the bank expanded during the nineteenth and twentieth centuries and took over a number of smaller banking companies. In 1995 it merged with the Trustee Savings Bank and traded as Lloyds TSB Bank plc between 1999 and 2013.

The bank is the principal subsidiary of Lloyds Banking Group, which was formed in January 2009 by the acquisition of HBOS by the then-Lloyds TSB Group.[3] That year, following the UK bank rescue package, the British Government took a 43.4% stake in Lloyds Banking Group. As a condition imposed by the European Commission regarding state aid,[4] the group later announced that it would create a new standalone retail banking business, made up of a number of Lloyds TSB branches and those of Cheltenham & Gloucester. The new business began operations on 9 September 2013 under the TSB brand. Lloyds TSB was subsequently renamed Lloyds Bank on 23 September 2013.[5]

Lloyds Bank has an extensive network of branches and ATM in England and Wales and offers 24-hour telephone and online banking services. As of 2012 it has 16 million personal customers and small business accounts.[6]

By automation and many consumers use electronic banking, in October 2014 Lloyds Bank announced to cut 9,000 employees and also to close some branches.[7]

It has its operational Headquarters in London with other offices in Wales and Scotland. It also operates a number of office complex, brand headquarters and data centres in Yorkshire including Leeds, Sheffield and Halifax.

History

Origins

Sampson Lloyd II (1699 - 1779), Birmingham iron merchant and founder of Lloyds Bank in 1765

The origins of Lloyds Bank date from 1765, when button maker John Taylor and iron producer and dealer Sampson Lloyd II set up a private banking business in Dale End, Birmingham. The first branch office opened in Oldbury, some six miles (10 km) west of Birmingham, in 1864. The symbol adopted by Taylors and Lloyds was the beehive, representing industry and hard work. The black horse device dates from 1677, when Humphrey Stokes adopted it as sign for his shop. Stokes was a goldsmith and "keeper of the running cashes" (an early term for banker) and the business became part of Barnett, Hoares & Co. When the bank took over that bank in 1884, it retained the black horse as its symbol.[8]

The association with the Taylor family ended in 1852 and, in 1865, Lloyds & Co. converted into a joint-stock company known as Lloyds Banking Company Ltd.

"LLOYDS BANKING COMPANY LIMITED - Authorized Capital £2,000,000. FOUNDED ON The Private Banks of Messrs. Lloyds & Co. and Messrs. Moilliet and Sons, with-which have subsequently been amalgamated the Banks of Messrs. P. H. Williams, Wednesbury, and Messrs. Stevenson, Salt, & Co., Stafford and Lichfield. {They had an office at 20 Lombard St., London}

Your Directors have the satisfaction to report that they have concluded an agreement with the well-known and old-established firm of Messrs. Stevenson, Salt & Company for the amalgamation with this Company of their Banking Business at Stafford, Lichfield, Rugeley, and Eccleshall, and that this agreement has had the unanimous approval of the Extraordinary General Meeting held on 31st January last. It will be again submitted to you for final confirmation after the close of the Ordinary General Meeting.

TIMOTHY KENRICK, Chairman. BIRMINGHAM, 9th February 1866. [First Report of the Company - 1865]"

Two sons of the original partners followed in their footsteps by joining the established merchant bank Barnett, Hoares & Co. which later became Barnetts, Hoares, Hanbury and Lloyd— based in Lombard Street, London. Eventually, this became absorbed into the original Lloyds Banking Company, which became Lloyds, Barnetts and Bosenquets Bank Ltd. in 1884, and, finally, Lloyds Bank Limited in 1889.

Expansion

Lloyds Bank, "at the sign of the black horse" (prior to TSB merger).

Through a series of mergers, including Cunliffe, Brooks in 1900, the Wilts. and Dorset Bank in 1914 and, by far the largest, the Capital and Counties Bank in 1918, Lloyds emerged to become one of the "Big Four" clearing banks in the United Kingdom. By 1923, Lloyds Bank had made some 50 takeovers, one of which was the last private firm to issue its own banknotes—Fox, Fowler and Company of Wellington, Somerset. Today, the Bank of England has a monopoly of banknote issue in England and Wales.[9] In 2011, the company founded SGH Martineau LLP.

In 1968, a failed attempt at merger with Barclays and Martins Bank was deemed to be against the public interest by the Monopolies and Mergers Commission. Barclays finally acquired Martins the following year.[10] In 1972, Lloyds Bank was a founding member of the Joint Credit Card Company (with National Westminster Bank, Midland Bank and Williams & Glyn's Bank) which launched the Access credit card (now MasterCard). That same year it introduced Cashpoint, the first online cash machine to use plastic cards with a magnetic stripe.[11] In popular use, the Cashpoint trademark has become a generic term for an ATM in the United Kingdom.

Under the leadership of Sir Brian Pitman between 1984 and 1997, the bank's business focus was narrowed and it reacted to disastrous lending to South American states by trimming its overseas businesses and seeking growth through mergers with other UK banks. During this period, Pitman tried unsuccessfully to acquire The Royal Bank of Scotland in 1984, Standard Chartered in 1986,[12] and Midland Bank in 1992. Lloyds Bank International merged into Lloyds Bank in 1986, since there was no longer an advantage in operating separately.[13] In 1988, Lloyds merged five of its businesses with the Abbey Life Insurance Company to create Lloyds Abbey Life.

Lloyds TSB

The Lloyds TSB logotype used 1995 – 2009 (group) and 1999 – 2013 (bank).

The bank merged first with the newly demutualised Cheltenham & Gloucester Building Society (C&G), then with the TSB Group in 1995.[14][15] The C&G acquisition gave Lloyds a large stake in the UK mortgage lending market.[16] The TSB merger was structured as a reverse takeover; Lloyds Bank Plc was delisted from the London Stock Exchange and TSB Group plc was renamed Lloyds TSB Group plc on 28 December, with former Lloyds Bank shareholders owning a 70% equity interest in the share capital, effected through a scheme of arrangement. The new bank commenced trading in 1999, after the statutory process of integration was completed.[17] On 28 June, TSB Bank plc transferred engagements to Lloyds Bank Plc which then changed its name to Lloyds TSB Bank plc; at the same time, TSB Bank Scotland plc absorbed Lloyds' three Scottish branches becoming Lloyds TSB Scotland plc. The combined business formed the largest bank in the UK by market share and the second-largest to Midland Bank (now HSBC) by market capitalisation.

Lloyds Abbey Life became a wholly owned subsidiary of the group in 1996, absorbing Hill Samuel in 1997, before closing to new business in 2000. In 2007, Abbey Life was sold to Deutsche Bank for £977 million.[18]

In 1999, the group agreed to buy the Scottish Widows Fund and Life Assurance Society for £7 billion.[19] The society demutualised in 2000, shortly before the acquisition was completed.[20] In 2001, Lloyds TSB made a bid to acquire Abbey National; however, the bid was blocked by the Competition Commission, who ruled that a merger would be against the public interest.[21]

In October 2011, Lloyds TSB's credit rating was reduced by Moody's from Aa3 to A1.[22] 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.

Lloyds TSB was the first Official Partner for the 2012 Summer Olympics in London.[23]

Divestment and return to Lloyds Bank

A rebranded Lloyds Bank branch in Wetherby, West Yorkshire (October 2013)

After the 2008 rescue of HBOS,[24] Lloyds TSB Group was renamed Lloyds Banking Group.[25] In 2009, following the liquidity crisis, HM Government took a 43.4% stake in Lloyds Banking Group. The European Commission ruled that the group must sell a portion of its business by November 2013, as it categorised the stake purchase as state aid.[26]

On 24 April 2013, it was confirmed that a number of Lloyds TSB branches in England and Wales would be combined with the branches of Cheltenham & Gloucester and the business of Lloyds TSB Scotland to form a new bank operating under the TSB brand and divested by the group.[27] The selected Lloyds TSB branches and those of Cheltenham & Gloucester were transferred to Lloyds TSB Scotland plc, which was renamed TSB Bank plc and is due to be divested through an initial public offering in 2014.[28] The new bank began operating on 9 September 2013 as a separate division within Lloyds Banking Group.[29] The remaining business of Lloyds TSB returned to the Lloyds Bank name on 23 September 2013.[5]

Services

The Teddington branch of Lloyds Bank in London, designed by Randall Wells in 1929.[30]

The bank offers a full range of banking and financial services, through a network of 1,300 branches in England and Wales.[31] Branches in Jersey, Guernsey and the Isle of Man are operated by Lloyds Bank International Limited, while Lloyds Bank (Gibraltar) Limited operates in Gibraltar; both are wholly owned subsidiaries and trade under the Lloyds Bank brand.[32] Lloyds Bank is authorised by the Prudential Regulation Authority and regulated by both the Financial Conduct Authority and the Prudential Regulation Authority.[33] It is a member of the Financial Ombudsman Service, the Financial Services Compensation Scheme, UK Payments Administration and of the British Bankers' Association. The bank uses the following series of sort codes:—

Range Note
30 to 39 former Lloyds branches
77-00 to 77-44
77-46 to 77-99		 former TSB branches
(England and Wales)

The Lloyds TSB Foundation funds local, regional and national charities working to tackle disadvantage across England and Wales.[34] There are separate foundations covering Scotland, Northern Ireland and the Channel Islands.

Overseas operations

By the early 1990s, Lloyds Bank had offices in 30 countries, from Argentina to the United States of America.

Europe

1911 saw the formation of Lloyds Bank (France) when Lloyds Bank acquired Armstrong and Co., based in Paris and Le Havre. From 1917 it was run jointly as Lloyds and National Provincial Bank. In 1955, Lloyds Bank bought full ownership and it became Lloyds Bank (Foreign) and later Lloyds Bank Europe.[35]

In 2014, the Dutch branch of Bank of Scotland transitioned to the Lloyds Bank name.

Bank of London and South America

Demonstration against the Corralito, Buenos Aires, 2002.

A strong connection with South America began in 1918 with the acquisition of the London and River Plate Bank. The later merger with the London and Brazilian Bank resulted in the Bank of London and South America. The Bank of London and Montreal was a joint venture between the Bank of London and South America and the Bank of Montreal. In 1971, Lloyds Bank bought the controlling interest in BOLSA and merged it with Lloyds Bank Europe to form Lloyds and Bolsa International Bank. This became Lloyds Bank International in 1974 and was merged into Lloyds Bank in 1986.[13]

National Bank of New Zealand

In 1872, the National Bank of New Zealand was founded in London as an overseas bank and shared many directors with Lloyds Bank. In 1919, Lloyds Bank acquired a small interest in the National Bank and in 1966, purchased it outright. In 1978, the National Bank moved its head office from London to Wellington.[36]

An already commanding presence as the National Bank of New Zealand was further strengthened in 1994 by the takeover of the Rural Bank, the former New Zealand government owned bank, from Fletcher Challenge, making it the leading provider of agricultural finance in the country.

In 2003, Lloyds TSB sold the National Bank to the Australia and New Zealand Banking Group. In 2013, ANZ announced that the National Bank brand (including the black horse and colour green) would be phased out.

Asia

In 1961, Lloyds Bank transferred its Eastern Division to National and Grindlays Bank in exchange for a 25 per cent share in National and Grindlays Bank (renamed Grindlays Bank in 1975). The bank retained its interest in Grindlays until 1984, when it was sold to the ANZ Banking Group.

North America

The Bank of London and Montreal was a joint venture between the Bank of London and South America and Canadian Bank of Montreal established in 1958 and headquartered in Nassau, Bahamas. In 1970, BOLSA fully acquired BOLAM.

Lloyds Bank of Canada was formed in 1986, when the bank purchased the Continental Bank of Canada. In 1990, after several years of losses, Lloyds Bank sold its Canadian operations to the Hong Kong Bank of Canada, a subsidiary of HSBC Holdings plc.

Controversies

The Coventry branch of Lloyds Bank on High Street, designed by architects Buckland and Haywood in 1932.[37]

Payment protection insurance

In November 2005 an investigation by the Financial Services Authority (FSA) highlighted a lack of compliance controls surrounding payment protection insurance (PPI). A second investigation in October 2006 identified further evidence of poor compliance and major PPI providers including Lloyds were fined for not treating customers fairly. In January 2011 a High Court case began which in the following April ruled against the banks, on 5 May 2011 Lloyds withdrew from the legal challenge. In 2012, Lloyds announced that they had set aside £3.6 billion to cover the cost of compensating customers who were mis-sold PPI.[38]

In March 2014 it was reported that Lloyds had been reducing the compensation they offered by using a regulatory provision called "alternative redress" to assume that customers wrongly sold single-premium PPI policies would have bought a cheaper, regular premium PPI policy instead.[39]

Links to arms trade

In December 2008 the British anti-poverty charity War on Want released a report documenting the extent to which the UK high street banks invest in, provide banking services for and lend to arms companies. The report stated that Lloyds TSB is the only high street bank whose corporate social responsibility policy does not mention the arms industry, yet is that industry's second largest shareholder among high street banks.[40]

Tax evasion

In 2009, the BBC's Panorama alleged that Lloyds TSB Offshore in Jersey, Channel Islands was encouraging wealthy customers to evade tax. An employee of Lloyds was filmed telling a customer how several mechanisms could be used to make their transactions invisible to the UK tax authorities.[41] This action is also in breach of money laundering regulations in Jersey.[42] Lloyds subsequently claimed that this was an isolated incident which they were investigating.[43]

Retail conduct failings

In December 2013, Lloyds Banking Group had been fined £28m for "serious failings" in relation to bonus schemes for sales staff. The Financial Conduct Authority said it was the largest fine that it or the former Financial Services Authority had imposed for retail conduct failings. The bonus scheme pressured staff to hit sales targets or risk being demoted and have their pay cut, the FCA said. Lloyds Bank has accepted the regulator's findings and apologised to its customers.[44] In February 2014, the Twitter profile @LloydsBankHell began tracking disquiet with consumers towards the bank. [citation needed][45]

Divestment of government-owned shares

Based on figures from the National Audit Office, George Osborne's sale of a 6% tranche of Lloyds shares in autumn 2013—despite his claims that the sale had netted a profit—worked out at a loss of at least £230m for UK taxpayers.[46]

Libor rate manipulations

In July 2014, U.S. and UK regulators slapped a combined £218 million ($370 million) in fines on Lloyds and a number of subsidiaries over the bank's part in the global Libor rate fixing scandal, and other rate manipulations and false reporting.[47]

See also

References

  1. ^ "Directors". lloydsbankinggroup.com.
  2. ^ Lloyds Bank to merge with TSB Group The New York Times, 12 October 1995
  3. ^ Change of Company Name press release by Lloyds TSB Group plc, 16 January 2009.
  4. ^ Rights Issue and Capital Enhancement Proposals Presentations and Webcasts, Lloyds Banking Group, 3 November 2009
  5. ^ a b Parsons, Russell (4 September 2013). "Lloyds Bank to return to high street on 23 September". Marketing Week. Retrieved 10 September 2013.
  6. ^ Lloyds TSB: Case Study. The Work Foundation. January 2005.
  7. ^ Stephen Morris (23 October 2014). "Lloyds Said to Cut 9,000 Jobs Amid Online Banking Shift".
  8. ^ "Timeline 1851 - 1900". Lloyds Banking Group. 2013. Retrieved 22 September 2013.
  9. ^ A brief history of banknotes Bank of England (retrieved 11 October 2008)
  10. ^ Roskill QC, Sir Ashton (chairman) Barclays Bank, Lloyds Bank and Martins Bank: a report on the proposed merger (Chapter 1, Chapter 2 and Appendices) Presented to Parliament in pursuance of section 9 of the Monopolies and Restrictive Practices (Inquiry and Control) Act 1948 (as applied by section 6(5) of the Monopolies and Mergers Act 1965) London: HMSO, 15 July 1968
  11. ^ "History of Plastic Cards" (PDF). The Association for Payment Clearing Services. Archived from the original (PDF) on 28 January 2006. Retrieved 26 April 2014.
  12. ^ Offer Sweetened By Lloyds Bank The New York Times, 28 June 1986
  13. ^ a b Lloyds Bank (Merger) Act 1985 (cap. 9)
  14. ^ "Obituary: Sir Brian Pitman". The Telegraph. 12 March 2010. Retrieved 29 March 2012.
  15. ^ Roger Cowe (11 March 2010). "Obituary: Sir Brian Pitman". The Guardian. Retrieved 29 March 2012.
  16. ^ About C&G Cheltenham and Gloucester (retrieved 11 October 2008)
  17. ^ Lloyds TSB Act 1998 (cap. 5)
  18. ^ Blackden, Richard (31 July 2007). "Lloyds sells Abbey Life for £977m". The Telegraph. Retrieved 22 September 2013.
  19. ^ "Lloyds TSB buys Scottish Widows". BBC News. 23 June 1999. Retrieved 22 September 2013.
  20. ^ "Q&A: Standard Life demutualisation". BBC News. 31 March 2004. Retrieved 22 September 2013.
  21. ^ "Lloyds TSB/Abbey tie-up blocked". BBC News. 10 July 2001. Retrieved 22 September 2013.
  22. ^ "Moody's downgrades 12 UK financial institutions". Moodys.com. 7 October 2011. Retrieved 29 March 2012.
  23. ^ Seawright, Stephen; Muspratt, Caroline (14 March 2007). "Lloyds TSB becomes Olympic sponsor". The Telegraph. Retrieved 22 September 2013.
  24. ^ Anticipated acquisition by Lloyds TSB Group Plc of HBOS Plc Office of Fair Trading, 24 October 2008
  25. ^ Change of Company Name RNS Announcements, Lloyds TSB Group, 16 January 2009
  26. ^ Sharp, Tim (25 April 2013). "Co-op Bank pulls out of Lloyds Verde deal". The Herald. Glasgow. Retrieved 22 September 2013.
  27. ^ Simon, Emma (26 November 2012). "Millions of Lloyds customers told banking details to change". The Telegraph. Retrieved 22 September 2013.
  28. ^ "Update on 24th April 2013". Lloyds TSB. 24 April 2013. Retrieved 24 April 2013.
  29. ^ "Lloyds faces internet issues on TSB launch day". BBC News. 9 September 2013. Retrieved 14 September 2013.
  30. ^ 1. 5028 HIGH STREET (north side) Teddington No 23. Lloyds Bank TQ 1671 23/26 II 2, see Images of England No. 205455 National Monuments Record, English Heritage (Retrieved 23 November 2009)
  31. ^ "Lloyds Bank in high street relaunch". The Belfast Telegraph. 23 September 2013. Retrieved 23 September 2013.
  32. ^ "Changes to Lloyds TSB International". Lloyds Bank. September 2013. Retrieved 22 September 2013.
  33. ^ "Information about us". Lloyds Bank. September 2013. Retrieved 22 September 2013.
  34. ^ About Us Lloyds TSB Foundation for England and Wales (retrieved 3 October 2009)
  35. ^ Lloyds Bank Europe The Royal Bank of Scotland Group (retrieved 11 October 2008)
  36. ^ National Bank of New Zealand About ANZ National (retrieved 11 October 2008)
  37. ^ Lloyds Bank Emblem and Allegorical Figures (Security and Commerce?) Public Monument and Sculpture Association, National Recording Project (retrieved 23 November 2009)
  38. ^ "Lloyds TSB counting the cost of the PPI scandal". DPA Claims. 16 May 2012. Retrieved 16 September 2013.
  39. ^ Robinson, Michael (25 March 2014). "Lloyds accused of short-changing PPI claimants". BBC News. Retrieved 29 March 2014.
  40. ^ Anna Morser (October 2008). "Banking on Bloodshed: UK high street banks' complicity in the arms trade" (PDF). War on Want. Retrieved 2 November 2012.
  41. ^ Sweeney, John (21 September 2009). "Tax inquiry into Lloyds off-shore". BBC. Retrieved 23 September 2009.
  42. ^ "Q&A: Panorama on Lloyds offshore". BBC News. 21 September 2009. Retrieved 23 September 2009.
  43. ^ Farndon, Lucy (22 September 2009). "Lloyds under fire after BBC tax revelation". Daily Mail. Retrieved 22 September 2013.
  44. ^ "Lloyds bank fined record £28m for 'serious failings'". BBC News. 11 December 2013. Retrieved 11 December 2013.
  45. ^ "LloydsBankHell'". BBC News. 9 February 2014. Retrieved 9 February 2014.
  46. ^ "'£230m taxpayer blow over Lloyds'". Press Association. 19 December 2013. Retrieved 23 December 2013.
  47. ^ "Britain's Lloyds Bank fined $370 mn over Libor rigging". Daily Mail. Retrieved 28 July 2014.

Bibliography

  • Sayers, R. S. Lloyds Bank in the History of English Banking Oxford: Clarendon Press, 1957
  • Winton, J. R. Lloyds Bank 1918–1969 Oxford University Press, 1982
  • Jones, Geoffrey Lombard Street on the Riviera: British Clearing Banks and Europe 1900–1960 Business History, Vol. 24 No. 2 (pp. 186–210) July 1982

External links

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