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Lloyds Reports Website Failures as Lender’s TSB Begins First Day

Rebranded TSB
A pedestrian passes a newly rebranded branch of TSB, part of the Lloyds Banking Group Plc, in London. Photographer: Matthew Lloyd/Bloomberg

Sept. 9 (Bloomberg) -- Lloyds Banking Group Plc, Britain’s largest mortgage lender, said some customers didn’t have access to online banking after the introduction of its TSB business.

“We experienced a temporary issue with our Internet-banking service earlier this morning, which affected the ability of some customers to log on successfully,” Lloyds said in an e-mailed statement today, without elaborating. “The issue is now completely resolved and we apologize for the inconvenience. Our branches, telephone banking and cash points were not affected.”

TSB will operate as a standalone bank from Lloyds before an initial public offering slated for the middle of 2014. The lender has 4.6 million customers and about 20 billion pounds ($31 billion) in mortgages and loans, making it the seventh largest in the U.K., according to Lloyds.

Lloyds has revived 200-year-old TSB, which it originally acquired in 1995, after Co-Operative Bank Plc earlier this year pulled out of a 700 million-pound purchase agreement. European Union regulators ordered the London-based lender to sell the branches by November 2013 after it received more than 20 billion pounds of state aid during the banking crisis.

The spinoff has cost Lloyds about 1.3 billion pounds as it created a separate computer and treasury operation for TSB. Customer account numbers and sort codes will remain the same after the switch, according to the bank.

TSB will be run by Paul Pester, who previously held a similar position at Richard Branson’s Virgin Money Holdings U.K. Ltd. Pester joined Lloyds as managing director of consumer banking and payments in 2010.

To contact the reporters 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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