Shane O'Riordain: Lloyds Bank door remains open to the Scottish foundation

We have recently set out our community investment plans for Scotland, including plans to establish a Bank of Scotland Foundation in due course. At the same time, following a meeting this month with the trustees of the Lloyds TSB Foundation for Scotland, the group, regrettably, has had to give notice that it is ending its long relationship with the foundation.

We are proud of our contribution to Scottish communities. Over the past 25 years, the group has given the foundation 85 million. This funding has been distributed through more than 12,000 awards to charities across Scotland. Since 1997, the four Lloyds TSB Foundations across the UK have received a total of 390m from Lloyds TSB Bank, which has been invested in local community initiatives and charities.

We have been seeking to agree a long-term and sustainable funding solution with all of the four Lloyds TSB Foundations. Our solution is about enabling the foundations to continue supporting charities, despite the tough economic climate our company, like many others, is dealing with.

Our proposal has been agreed by the other three Lloyds TSB Foundations. Between them, they account for 80 per cent of all the giving activity that we fund through the foundations.

In line with other major companies, we have asked the Scottish foundation to align a proportion of its grants to support the fundraising activities of our 20,000 Scottish colleagues and the overall ethos of the group, including financial literacy and financial inclusion. We believe that this complements and, indeed, strengthens the charitable mission of the foundation.

Our proposal honours the existing covenants while substantially accelerating payments to the foundations. The Scottish foundation would receive significantly increased funding, at a level higher than it received in 2009 and substantially higher than the covenanted payments, over the next few years.

Thereafter, the covenanted payments to the foundations would be revised from 1 per cent to 0.5 per cent of the enlarged group's pre-tax profits. Over the medium and longer term, we believe that the Scottish foundation could expect to enjoy significantly higher levels of income than it has in the past. This is because of the much larger size and scale of the enlarged group.

The Lloyds TSB Foundation for Scotland will continue to receive significant funding from the group over the next nine years. Almost a fifth of 1 per cent of the group's pre-tax profits each year will be given to the Lloyds TSB Foundation for Scotland, subject to a de minimis clause, where appropriate.

While the group has served notice of termination, our offer remains on the table. We are open to an accommodation with the Scottish foundation if the trustees accept the same arrangement as the other three foundations. We believe very firmly, as do the other foundations, that the same deal – and no other – should be available to all.

Lloyds Banking Group's community investment is bolstered further by the group's wider commitment to Scottish communities shown through various sponsorships. These include Scottish Athletics, Young Scot and National Galleries of Scotland.

Our position is clear: due to our standing as one of Scotland's largest corporate donors, we will continue to support many good causes across Scotland. Our door remains open to the Scottish foundation.

Shane O'Riordain is group communications director, Lloyds Banking Group