Lloyds TSB is planning the first network of banks dedicated to business customers in an attempt to pave the way for another merger and lessen the impact of closing 800 high street branches.
The bank, which is looking for the maximum takeover target the competition authorities will allow, must convince the regulators it continues to offer a comprehensive business banking service.
Like every other major bank, Lloyds is in the process of a cost-cutting programme. Since its merger with TSB was approved in 1998, it has been closing high street branches and putting more resources into direct and automated operations.
Lloyds TSB group head of retail banking Gordon Pell says: “The main thing a branch can do that a direct operation can’t is take in and process cash deposits from business customers.
“We are looking to set up dedicated branches in 50 major UK business centres over the next five years. These will be located on ring-roads and industrial estates, and will have a different mix of services from our existing network.”
Lloyds TSB is testing a business branch in Reading with a cashier service, Internet access and a team of business banking managers.
Plans for the network emerged as Lloyds TSB revealed its interim results last week. Pre-tax profits were up 16 per cent to £1.85bn for the six months to June 30.
Group chief executive Peter Ellwood said the only thing preventing Lloyds TSB from merging with another high street bank was regulators’ concern over the lack of choice this would offer small businesses.
Only the main UK clearing banks – Lloyds TSB, NatWest, Barclays, Midland (HSBC), Royal Bank of Scotland and Bank of Scotland – offer comprehensive business services.