Co-operative Group hints TSB more likely to survive in Scotland

THE venerable TSB brand stands more chance of surviving long-term in Scotland than elsewhere, the chief executive of prospective new owner Co-operative Group has strongly hinted.

Lloyds will rename 632 branches as TSB in the run-up to them being acquired by the Co-op at the end of next year.

Co-op chief Peter Marks said one possibility is that the net-work might eventually be run as “a hybrid”. This would raise the possibility of the TSB name surviving in some areas where it is historically strong, while other acquired Lloyds branches switch to the Co-op Bank brand.

“It [TSB] is well known in Scotland, for instance, it has some identity there,” Marks said. His comments follow the sale of the branch network, including 185 Lloyds TSB Scotland branches, as ordered by the European Commission in return for Lloyds receiving a taxpayer bailout.

The sale also includes 250 Lloyds TSB and Halifax outlets in England and Wales, and 164 Cheltenham & Gloucester branches.

But it is thought that the Co-operative Group privately believes a famous name from Victorian times has less resonance for consumers now in areas such as Middle England, than it does in its Scottish historic heartland.

Marks stressed that Co-operative Group planned to use TSB as an “interim brand” for the branch network, probably for a few years, but no options were ruled out longer term.

“No decision has been taken whether we will continue with it. That is still a work in progress,” he said.

“For the time being, and certainly perhaps for the next two or three years, the TSB brand will be on the Verde operation.”

Historically, TSBs (originally Trustee Savings Bank) specialised in accepting savings from the poor. Between 1970 and 1985 the various Trustee Savings Banks in the UK were amalgamated into a single TSB Group, which was floated on the London Stock Exchange.

In 1995 the group was taken over by Lloyds. Meanwhile, Marks said Co-operative Group had a track record in integrations, including Somerfield supermarket group and Britannia building society, but did not underestimate the challenge of assimilating the Lloyds assets.

“Any chief executive who says it’s easy integrating big acquisitions is round the bend,” he said. Marks also said recent scandals such as Libor-rigging and money-laundering had given Co-operative a “tremendous” fillip, with a 60 per cent increase in customers switching to the ethical bank over the past few months.