Lloyds Revives 200-Year-Old TSB Name as EU Forces SpinoffGavin Finch
Lloyds Banking Group Plc, Britain’s biggest mortgage lender, will revive the two-century-old TSB name next week when it rebrands 631 branches it’s being forced to sell by European regulators.
TSB will operate as a standalone bank from Sept. 9 before Lloyds sells a stake in an initial public offering slated for the middle of next year. The lender will have 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.
The lender is reviving TSB, which it originally acquired in 1995, after Co-Operative Bank Plc pulled out of a 700 million-pound agreement to buy it in April. European Union regulators ordered the London-based lender to sell the branches by November 2013 after Lloyds received more than 20 billion pounds of state aid during the banking crisis.
“TSB will be different from other banks in that it is purely focused on individuals, families and local businesses,” the bank said in a statement. “It will focus only on individual and small business customers.”
Lloyds acquired TSB Group in 1995, nine years after the government took the Trustee Savings Bank public. At the time of the merger, TSB was the seventh-largest bank in Britain.
The spin-off has cost Lloyds about 1.3 billion pounds as it created a separate computer and treasury operation for TSB. Customers being transferred from Lloyds to TSB have all been notified by letter of the move. Customer account numbers and sort codes will remain the same after the switch, Lloyds said.
The switch is expected to be seamless, Lloyds Chief Executive Officer Antonio Horta-Osorio told the British Broadcasting Corp. Very few customers had expressed a desire not to become a TSB customer, he added.
The TSB will be run by CEO Paul Pester, who has 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.
Royal Bank of Scotland Group Plc, Britain’s biggest publicly owned lender, is also weighing an IPO of 316 branches after Banco Santander SA abandoned talks to buy them in October.