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Lloyds Doesn’t Have to Offer Highest Saving Rates, Tookey Says

Nov. 8 (Bloomberg) -- Lloyds Banking Group Plc, Britain’s largest mortgage provider, is attracting customers without offering the best rates on its savings accounts, acting Chief Executive Officer Tim Tookey said.

“We don’t have to offer the highest rates in order to attract savings,” Tookey, who is also the lender’s finance director, said on a conference call with journalists today. “We did not outperform in that on price; we outperformed on service and we outperformed on product design and the positioning of product.”

Lloyds’s customer deposits rose 4 percent to 396.8 billion pounds ($638 billion) in the first nine months of the year, mitigating higher wholesale funding costs, the bank said today in a statement. Savers with 5,000 pounds or more in some of the bank’s Halifax or Bank of Scotland accounts qualify for a prize draw of 100,000 pounds beginning December, according to the bank’s website.

“The most important thing to remember is we had a lower savings rate than many other household-name banks,” Tookey said. “This isn’t about building hot money deposits here today and gone tomorrow.”

Third-quarter pretax profit before costs linked to the lender’s purchase of HBOS Plc fell 21 percent to 644 million pounds ($1.03 billion) from the second quarter, Lloyds said in a statement today. That missed the 754 million-pound median estimate of six analysts surveyed by Bloomberg. Bad loans fell 30 percent to 1.96 billion pounds, 300 million pounds less than estimated by Andrew Lim, an analyst at Espirito Santo Investment Bank in London.

To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net. Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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