MORE than 630 bank branches rebranded as TSB by Lloyds Banking Group yesterday could still be snapped up by a trade or financial buyer before a planned flotation next summer, the head of the business revealed yesterday.
Lloyds was ordered to sell the branches by the European Commission in return for its £20 billion taxpayer bailout in the 2008 financial crash.
It plans the business to be run on a stand‑alone basis ahead of the listing, with its own board from the end of this year, but TSB chief executive Paul Pester said that could change.
“It’s absolutely possible that someone may come in and say this is a fantastic business, we’ll make you an offer for it. That’s something we can leave Lloyds to deal with,” Pester said at the launch of the new business in London’s Baker Street.
TSB will become Britain’s eighth biggest retail bank with 4.5 million customers, 6 per cent of the British branch network and 4.3 per cent of the current account market.
Pester said that he believed the bank would have a commercial advantage in being focused on transparent, community lending to households and small businesses, as well as on mortgages.
He said that, from his canvassing of customers, it was clear they wanted “transparent banking” where “every penny is to fuel the local economy”.
Pester added: “Banks became disconnected from the communities they were meant to be serving over the last 20 years or so.
“They know [money deposited with TBS Bank] is not being used to fund investment banking, derivatives trading, overseas expansion. It’s not being used to pay bankers’ bonuses.”
The new boss said he had his own ideas on addressing the controversial subject of banker bonuses, but would only be able to go public with them when he could put it to the new TSB board early in the New Year.
Asked at the launch about TSB’s likely stock market valuation, Allison Brittain, Lloyds’s group retail director, said: “It’s a nice balanced strongly-capitalised, fully UK-oriented bank with a good distribution network.
“I think it’ll be a great stock, but it all comes down to the market and the price on the day. If we over-price it it won’t go.”
The return of the 200-year old TSB brand to the high street, 18 years after it merged with Lloyds, is partly the result of action by regulators and the government to introduce greater competition for the country’s banks.
Other steps include the relaxation of capital requirements for new entrants to the sector, and the introduction of rules on 16 September requiring banks to make sure customers can switch current accounts within one week.
• The Financial Conduct Authority (FCA), which regulates financial markets and promotes competition, unveiled plans yesterday to carry out a market study of the £1 trillion British cash savings market.
The FCA said it planned to study whether competition was working effectively for consumers with savings accounts.