Scottish customers may take encouragement from the revival of a brand with origins in Dumfriesshire, where in 1810 the Reverend Henry Duncan established a bank to support the poor during times of hardship.
The TSB brand is back as part of the Lloyds Banking Group overhaul under EU competition requirements forcing it to sell 632 of its branches. Those branches, including 185 Lloyds TSB outlets in Scotland, had been destined for the Co-operative until that deal fell apart. Instead, those branches will from tomorrow be renamed TSB, as will 282 Lloyds TSB and 164 C&G branches in England and Wales.
The switch isn’t without controversy. Customers being transferred get no say in the matter and many will be further away from their closest branch (although, to Lloyds’ credit, it has been communicating with those affected).
The customers being moved will be especially sensitive to any teething troubles and Lloyds can expect a barrage of complaints should the transition prove bumpy.
And that’s where we come to the nub of it: how can TSB re-establish itself as a brand apart from a bank that has become, in some minds, toxic. Take its part in the payment protection insurance (PPI) scandal, for instance. All banks are not equal in this, and Lloyds is one of the biggest culprits.
Two years ago Lloyds Banking Group boss Antonio Horta-Osorio won praise for “kitchen-sinking” bad news by making provision for £3.2 billion in PPI compensation and costs. The assumption was that he was dealing with the problem.
Not quite. This year it was revealed that staff at a Deloitte-run Lloyds call centre were told to deny or delay PPI claims in the hope they would be dropped.
Now, new Financial Ombudsman Service figures show that it upheld 90 per cent of PPI complaints against Lloyds in the first half of this year. In other words, Lloyds (including Bank of Scotland and Halifax) is rejecting huge numbers of valid claims for compensation. Its uphold rate was more than double that of several other less-than-angelic banks, including Royal Bank of Scotland.
How does TSB prosper with that in the background? It should start by going back to basics and putting individual and small business customers first, as the TSB mission statement promises. The aim is for TSB to be a “completely clean bank”, in the words of Horta-Osorio – a step removed from the financial scandals of recent years.
Let’s hope it can pull that off, for the benefit of its own customers and the wider market. But it would be a remarkable feat, given its parent group’s role in the PPI scandal and its continued failure to face up to its responsibilities.