TSB bank has reappeared on the high street today, after a third of Lloyds branches were rebranded over the weekend.
The bank, which merged with Lloyds in the 1990s, has been relaunched as a standalone entity following a decree by the European Commission that required Lloyds to sell off branches following its Government bailout.
Around a third of the branches owned by Lloyds Banking Group, including all Cheltenham and Gloucester and Lloyds TSB Scotland branches, have now been switched to the new standalone brand, along with 4.5 million customers.
Lloyds boss Antonio Horta-Osorio has promised customers a 'seamless' transition between the two banks. Account numbers and sort codes will remain the same, while existing Lloyds bank cards will remain active while they are replaced by new TSB-branded cards.
TSB bank has its own registration with the Financial Services Compensation Scheme, which means that deposits up to the value of £85,000 per person are insured. (Find out more about the FSCS).
TSB Bank relaunched on the high street today as the eighth largest high-street bank.
Competition
Its 631 branches and 8,000 staff will see TSB reappear as the eighth largest bank on the UK high street. It remains part of Lloyds Group for now, but will be sold off next year as part of Project Verde.
A deal with the Co-operative Bank to sell the branches fell through in April, before concerns were raised about the Co-op’s capital position.
Lloyds was ordered to sell off the branches to improve competition in the banking sector. The five largest UK banks control five in every six current accounts, which emphasises their dominance over smaller challengers.
631 branches now form the standalone TSB bank after Lloyds were unable to sell off the branches in time.
Critics have suggested that the new TSB bank will add little competition to the market because its products are likely to be very similar or identical to Lloyds’ existing portfolio.
But a new £750 million system due to launch next week will make it much easier to switch bank accounts, which is expected to spark competition in the market. (See our guide on the new Switching System.)
Already, banks including Halifax and the RBS Group have begun promoting cashback current accounts in a bid to attract new customers.
And a number of existing Lloyds customers have embraced the idea of a clean slate, with around 1,000 having already applied to be transferred across to the new TSB.
Keith McDonald
Which4U Editor
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