Lloyds TSB

Lloyds TSB

Infobox Company
name = Lloyds TSB Group plc

type = Public (lse|LLOY, nyse|LYG)
genre =
foundation = 1995 (Lloyds Bank: 1765) (Trustee Savings Bank: 1810)
founder =
location_city = London, Group Headquarters
Edinburgh, Registered office
location_country = United Kingdom
location =
locations =
area_served =
key_people = Sir Victor Blank, Chairman Eric Daniels, Chief Executive
industry = Banking
products = Banking Investment banking Insurance
services =
market c

revenue = £16,874 million GBP (2007)
operating_income = £5,139 million GBP (2007)
net_income = £3,321 million GBP (2007)
assets =
equity =
owner =
num_employees = 74,000 (2006)
parent =
divisions =
subsid =
homepage = [http://www.lloydstsb.com/ lloydstsb.com]
footnotes =
intl = yes

Lloyds TSB Group plc (lse|LLOY, nyse|LYG) is a leading British financial institution with its Group head office in London and its registered office Edinburgh, Scotland 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).cite web |url=http://query.nytimes.com/gst/fullpage.html?res=990CE2DA163EF931A25753C1A963958260 |title=Lloyds Bank to merge with TSB |publisher=New York Times |date=1995-10-12 |accessdate=2008-09-17] The Group's head office is 25 Gresham Street,London with its Registered address at Henry Duncan House, 120 George St, Edinburgh.

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 plc. 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. Lloyds TSB's Triple A (Moody's) senior-debt rating was placed on review for possible downgrade following the announcement of the organization's planned acquisition of HBOS.

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. [cite web |url=http://uk.reuters.com/article/mergersNews/idUKWLA975220080917 |title=HBOS confirms in takeover talks with Lloyds TSB |date=2008-09-17 |accessdate=2008-09-17] These talks arose following a run on the share price of HBOS connected with the subprime mortgage credit crisis and short selling of shares [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] . Later in the day it was announced that Lloyds TSB had agreed to buy HBOS for 232p per share. [cite web |url=http://news.bbc.co.uk/1/hi/business/7622180.stm |title=Lloyds TSB seals merger with HBOS |date=2008-09-17 | accessdate=2008-09-17] On 18 September, Lloyds TSB confirmed the £12.2 billion deal. [cite web |url=http://news.bbc.co.uk/1/hi/business/7622380.stm |title=Lloyds TSB unveils HBOS takeover |publisher=BBC News |date=2008-09-18 |accessdate=2008-09-18]



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, founded by John Taylor and Sampson Lloyd in 1765 in Birmingham. [cite web |url=http://www.lloydstsb.com/about_ltsb/lloyds_bank.asp |publisher=Lloyds TSB |title= Lloyds BankHistory |accessdate=2008-09-17] 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. [cite web |url=http://www.lloydstsb.com/about_ltsb/tsb.asp |title=TSB Bank History |publisher=Lloyds TSB |accessdate=2008-09-17]

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. [cite web |url=http://news.bbc.co.uk/1/hi/business/the_company_file/375807.stm |title=Lloyds TSB buys Scottish Widows |publishre=BBC News |date=1999-06-23 |accessdate=2008-09-17] 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. [cite web |url=http://findarticles.com/p/articles/mi_qn4158/is_20000902/ai_n14333782 |title=Standard Chartered wins $1.3bn Chase deal |publisher=The Independant |date=2000-09-02 |accessdate=2008-09-17]

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. [cite web |url=http://www.telegraph.co.uk/money/main.jhtml?xml=/money/standfirst/2001/03/09/cnlods09.xml |title=Report damns Lloyds TSB's bid for Abbey National |publisher=The Telegraph |date=2001-03-14 |accessdate=2008-09-17]

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. [cite web |url=http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=3507900 |title=Lloyds TSB confirms possible sale of National Bank |publisher=NZ Herald |date=2003-06-17 |accessdate=2008-09-17]

In July 2004, Lloyds TSB Group announced the sale of its business in Argentina to Banco Patagonia Sudameris S.A [cite web |url=http://www.hipotecario.com.ar/media/pdf/InformacionFinanciera/Bonos/Prospectos2007-en.pdf |title=Banco Hiptecario Prospectus Page 118 |publisher=Banco Hiptecario |format=PDF |year=2007 |accessdate=2008-09-17] and its business in Colombia to Primer Banco del Istmo, S.A.

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. [cite web |url=http://news.bbc.co.uk/1/hi/business/4544520.stm |title=Lloyds TSB sells Goldfish brand |publisher=BBC News |date=2005-12-20 |accessdate=2008-09-17]

In 2007, Lloyds TSB announced that it has sold its Abbey Life insurance division to Deutsche Bank for £977m. [cite web |url=http://findarticles.com/p/articles/mi_hb5929/is_200708/ai_n23838399 |title=Lloyds TSB sells Abbey Life for £1bn |publisher=Finanical Advisor |date=2007-07 |accessdate=2008-09-17]

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. [cite web |url=http://www.guardian.co.uk/money/2007/apr/03/islamicfinance.religion |title=Lloyds TSB launches Sharia Business Account |publisher=The Guardian |date=2007-04-03 |accessdate=2008-09-17]

Takeover of HBOS

On 17 September 2008, the BBC reported that HBOS was in takeover talks with Lloyds TSB, in response to a precipitous drop in HBOS's share price connected to short selling. [cite web |url=http://news.bbc.co.uk/1/hi/business/7621151.stm |title=HBOS confirms Lloyds merger talks |publisher=BBC News |date=2008-09-17 |accessdate=2008-09-17] The takeover talks concluded successfully that evening, with a proposal to create a banking giant which would hold a third of the UK mortgage market. [cite web |url=http://news.bbc.co.uk/1/hi/business/7622180.stm |title=Lloyds TSB Seals Merger with HBOS |publisher=BBC News |date=2008-09-17 |accessdate=2008-09-17] . An announcement was made at 0700 on 18 September 2008.

Although the announcement by the HBOS board confirmed agreement to be taken over by Lloyds TSB, two main steps are required for this to take place:
* Three quarters of HBOS shareholder votes in agreement with the board's actions;cite web |url=http://www.investorrelations.lloydstsb.com/media/pdf_irmc/ir/2008/2008Aug_LTSB_Acquires_HBOS.pdf|title=Recommended acquisition of HBOS plc by Lloyds TSB Group plc|publisher=Lloyds TSB|date=2008-09-17 |accessdate=2008-09-18]
* UK government dispensation with respect to competition law.As most of the shareholding votes with HBOS are in the hands of institutional investors, it is unlikely there will be sufficient shareholder protest to the takeover, and as Prime Minister Gordon Brown personally brokered the deal with Lloyds TSB [cite web |url=http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4772801.ece
title=Gordon Brown steps in to secure HBOS rescue |publisher=The Times Online |date=2008-09-17 |accessdate=2008-09-18
] , the dispensation should be a formality. The only event which could hold up these steps is a criminal investigation by the Serious Fraud Office over the circumstances of the short selling, as has been initiated by New York's Attorney General into similar events on the NYSE. [cite web |url=http://www.newsday.com/business/ny-bzsell1911976270sep19,0,7431880.story?track=rss |title=AG Cuomo announces probe into short-selling |publisher=www.newsday.com|date=2008-09-18 |accessdate=2008-09-19] However, the SFO has not indicated it is conducting such an enquiry.

The Lloyds TSB board stated that troubled banks Merrill Lynch and Morgan Stanley were amongst the advisers recommending the takeover.


The Group is organised as follows:
* UK Retail Banking - Helen Weir, Group Executive Director [cite web |url=http://www.investorrelations.lloydstsb.com/gr/overview_ukrb_page.asp |publisher=Lloyds TSB |title=Retail Banking |accessdate=2008-09-18]
** 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 [cite web |url=http://www.investorrelations.lloydstsb.com/gr/overview_ii_page.asp |publisher=Lloyds TSB |title=Insurance and Investments |accessdate=2008-09-18]
** 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.
*** Scottish Widows
*** [http://www.lloydsTSBinsurance.co.uk/ Lloyds TSB Insurance Services Limited]

* Wholesale and International Banking - G Truett Tate, Group Executive Director [cite web |url=http://www.investorrelations.lloydstsb.com/gr/overview_wib_page.asp |publisher=Lloyds TSB |title=Wholesale and International Banking |accessdate=2008-09-18]
** 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.
*** [http://www.lloydsTSBcorporatemarkets.com/ Lloyds TSB Corporate Markets]
*** [http://www.lTSBcf.co.uk/ Lloyds TSB Commercial Finance]
*** Blackhorse
*** Offshore Banking

Awards and recognition

In July 2007, Euromoney announced Lloyds TSB as the winners of its Awards for Excellence. [cite web |url=http://www.financemarkets.co.uk/2007/07/16/lloyds-tsb-%E2%80%93-best-bank-award/ |title=SLloyds TSB - Best Bank Award |accessdate=2008-09-17]

In April 2008, Lloyds TSB Corporate Markets was recognised as ‘Bank of the Year’ for the fourth year running. [cite web |url=http://www.realfd.net/daily-insights/leading-the-finance-team/5227621/winners-of-the-2008-cbirealfd-fds-excellence-awards-announced.thtml |title=Real FD Awards |accessdate=2008-09-17]

In June 2008, Lloyds TSB came top in the Race for Opportunity’s (RfO) annual survey. [cite web |url=http://www.peoplemanagement.co.uk/pm/articles/2008/06/lloyds-tsb-tops-workforce-diversity-chart.htm |title=Lloyds TSB tops workforce diversity chart |accessdate=2008-09-17]


Lloyds TSB was appointed the first Official Partner for the London Olympics 2012. [cite web |url=http://www.lloydstsblondon2012.co.uk/default.htm |title=Lloyds TSB - London Olympics 2012 |accessdate=2008-09-17]

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. [cite web |url=http://www.santamariaracing.co.in/sponsors.html |title=Santamaria-Woods Sponsors |accessdate=2008-09-17]

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. Fact|date=August 2008

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.


External links

* [http://www.investorrelations.lloydstsb.com/ir/homepage.asp Group overview]
* [http://www.lloydstsb.com/ Lloyds TSB web site]
* [http://www.lloydstsb-asia.com/ Lloyds TSB Asia web site]
* [https://www.lloydstsb.es/ Lloyds TSB Spain web site]
* [http://www.leasing4business.co.uk/ Lloyds TSB Autolease]

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