Lloyds unsure on future of new TSB bank

TSB will be spun off after a deal with the Co-Operative bank fell through. Picture: AP
TSB will be spun off after a deal with the Co-Operative bank fell through. Picture: AP
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LLOYDS Banking Group is yet to decide whether to establish the headquarters of the new TSB Bank in Scotland after a deal to sell 632 branches to the Co-operative Group fell apart last month.

The bank is still working on plans to spin out the branches into a separate bank floated on the London Stock Exchange.

Sir Win Bischoff, chairman of Lloyds, said he was fully aware of the Scottish case but added that the bank “hasn’t taken a view” yet on where the TSB will be based. The brand, formerly the Trustee Savings Bank, was founded by the Reverend Henry Duncan in Dumfriesshire in 1810. Up to a third of the branches to be spun out of Lloyds are based in Scotland.

Bischoff, pictured, who was in Edinburgh to attend a ceremony for 58 graduates of the Career Academies UK programme, said: “I have heard those calls. We haven’t taken a view on it.”

He insisted that the bank’s plan to sell the branches to the Co-op was “always plan A”. But he said that alongside the negotiations with the Co-op, the board maintained an alternative £1 billion plan to float the branches as a separate bank. Lloyds was forced to offload the branches by the European Commission after it was rescued by the UK government.

Last month the Co-operative pulled out of the deal, warning that it was not “in the best interests” of its customers.

Bischoff said: “Our view was always that it was plan A. But we had a plan B. We wanted to do the Co-op deal but the Co-op gave its reasons why they didn’t want to do it.”

Analysts have estimated that the flotation of the TSB Bank will add a further £200m to £300m to the £1bn cost of selling the branches.

Bischoff founded the Career Academies UK programme in 2002. A branch was established in Scotland in 2008 by Colin Stewart, country head for Scotland for Citi. The programme recruits high school students for a two year “enrichment” programme designed to boost confidence and develop skills. Bischoff said: “This thing was started because there was a view that young people particularly from less privileged backgrounds would never go into these marbled halls of insurance or banks or the finance departments of a big companies like BP or AstraZeneca – they think ‘it’s not for me, they wouldn’t accept me’.

“Once they are in there as interns they see things – that the man in the corner office probably went to university and so that raises their aspirations. Secondly, they fit in.

“The confidence aspect is so important. Many of these young kids, when you interview them they tend not to look you in the eye. They look down at their shoes. They come out of this and they look at you – it is just wonderful.”