- POSTED: 10 Sep 2013 00:59
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Britain's part-nationalised Lloyds Banking Group on Monday relaunched TSB as a standalone lender, under plans to meet EU competition criteria and prepare for LBG's return to the private sector.
LONDON: Britain's part-nationalised Lloyds Banking Group on Monday relaunched TSB as a standalone lender, under plans to meet EU competition criteria and prepare for LBG's return to the private sector.
LBG rebranded 631 of its British branches, calling them TSB, ahead of their stock market flotation planned for next year. TSB was a familiar part of Britain's banking landscape until Lloyds snapped it up 18 years ago and folded it into its name.
Following the 2008 financial crisis, Lloyds TSB merged with British rival HBOS to form LBG.
"LBG is increasing choice and competition in the market by launching one bank and revitalising another," LBG chief executive Antonio Horta-Osorio said in a company statement.
He had already stated that the move would create a "completely clean bank" untainted by recent scandals in Britain's banking sector such as the Libor interest rate-rigging affair and mis-selling of insurance products to customers.
TSB - whose history dates back to 1810 - becomes Britain's eighth biggest bank in terms of store numbers, with 631 branches and 8,000 staff.
The new bank has around 4.6 million customers and more than 20 billion pounds ($31 billion, 24 billion euros) of loans and customer deposits.
The move follows the collapse earlier this year of a deal, dubbed Project Verde, to sell the rebranded branches to The Co-operative Group after the potential purchaser ran into financial trouble.
"The creation of the two new brands follows a ruling by the European Commission in 2009 that said Lloyds Banking Group should transfer part of its business to a new owner," LBG added in Monday's statement.
LBG, meanwhile, remains 39-percent owned by the British government after it received a vast state bailout at the height of the 2008 global financial crisis.
"The relaunch of TSB onto our high street today is another sign of progress in the biggest ever overhaul of our banking system," Britain's finance minister George Osborne said in a speech Monday on the economy.
Osborne recently announced that he was considering share sale options for LBG, alongside the future flotation of TSB, as the government seeks to return the state-rescued lender to the private sector following a turnaround in its financial performance.
LBG posted profit after tax of 1.56 billion pounds in the six months to the end of June, which compared with a net loss of £697 million during the first half of 2012, recent company data showed.
LBG's performance contrasts with that of Royal Bank of Scotland, which remains almost totally nationalised as a result of the financial crisis and which is seen as having far more work to do than Lloyds before it can return to the private sector.
Shares in LBG closed up 1.47 percent to 76.52 pence Monday on London's FTSE 100 index of top companies, which dipped 0.25 percent overall to 6,530.74 points.
"For Lloyds, this (rebrand) is part of the bank's strategy to de-risk, scale down due to its huge size and steer into sustainable profitability in order to eventually see the UK government sell their stake in the bank," said analyst Joe Rundle at traders ETX Capital.
Osborne meanwhile on Monday insisted that recent economic data vindicated his austerity measures and warned that any backtracking could jeopardise Britain's economic recovery.