Around a third of Lloyds' branches were rebranded to TSB over the weekend, with 4.5 million customers transferred to the new bank. Why did the change occur, and what can customers expect?
Why has this happened?
Lloyds has been forced to offload 631 branches as part of a directive by the European Commission. A deal with the Co-operative Bank to buy the branches collapsed earlier this year, so TSB has been launched as a standalone bank while the search for a new buyer continues.
The new bank includes all customers of Cheltenham & Gloucester and Lloyds Scotland. Around 3.5 million customers in England and Wales were informed some months ago that their accounts would be changing.
While some customers have expressed their disappointment at being transferred, others have embraced the clean slate and have already enquired about a transfer to the new TSB.
Fundamental changes: None
Though Lloyds boss Antonio Horta-Osorio promised a ‘seamless’ transition, the bank did not get off to the perfect start. Internet banking troubles on the first morning have left customers concerned that there could be teething problems with the advent of the new bank.
But customers will see little fundamental change in their banking activity. The change for customers is effectively a rebrand rather than anything more structural.
Bank account numbers and sort codes will remain the same. Existing bank cards, mortgages, overdrafts, and credit facilities will continue as normal.
The biggest change for customers on the surface is that they will receive new cards featuring the TSB brand. Online banking will be carried out through the new TSB site, and a new mobile app is due for release in the coming days.
TSB: More a rebrand than fundamental changes. Customers' details will remain the same.
Future changes: Possible
Critics are sceptical about the fashioning of TSB as a ‘new bank’, arguing that it will simply mirror Lloyds and offer little to the market in terms of competition.
It seems likely that rates will remain synchronised with Lloyds, at least during the bank’s infancy, to avoid provoking unrest from customers.
But the future is more difficult to predict. TSB must still be sold on, and the new bank may be given more autonomy to compete if Lloyds wants an extension from the Commission that will allow it to float TSB on the stock market next year.
TSB: Same or Different?
The Lloyds boss, Antonio Horta-Osorio, has promised a ‘clean’ bank in TSB.
Lloyds has been embroiled in scandal over recent years, including a high volume of PPI-related complaints and revelations about the bank’s controversial ‘salespoint’ system.
And critics are already refuting Lloyds’ claims of 'cleanliness', accusing the bank of mistreating customers by transferring them to a new bank without their consent.
New TSB customers who wish to remain with Lloyds will now have to transfer their current account (though from next week, this becomes a much easier process).
Equally, though, there are many who seem unperturbed by the switch and attracted to the clean slate. Around 1,000 customers have enquired about switching to the new bank.
The acid test is how long this great cleanliness lasts. But the switch certainly shouldn’t sully things any further.