John Ward – Lloyds/TSB Split : From The Wunderkind That Cost You £20bn, A Cock-Up On Day One – 9 September 2013

JohnWCongratulations, you may now be a TSB customer.

Lloyds/TSB has been in the process of splitting its banking operations over the weekend. If you used your bank online over the weekend or first thing this morning, you will have been given some information about this. The split is to satisfy EC Sprouts worried about Lloyds/TSB’s large brand share in this obviously open and free-market financial sector, despite the fact that the group is still largely owned by us.

There are three problems with what’s being done:

1. If you haven’t been online – and your bank branch is about to be rebranded TSB – you won’t know about it….but your accounts with Lloyds will already have disappeared from your online page, thus giving you a mild heart-attack. This is an example of touchy-feely bank service; it is entirely normal, and nothing to worry about. Full information can be dug out from here. Meanwhile, this quote comes from one of the many Lloyds customers who wrote to me yesterday:

‘I object very strongly to the idea that MY business can be sold off by any one who chooses to anyone who wants to buy it without my permission. And I don’t want my accounts ‘separated’ because there are costs of transaction and timing in transfering between different banks.

Anyway, a few days ago I receive an odd letter from TSB ‘welcoming me to their bank’. Well I did not think the sale was happening yet – if at all. The letter contained no dates or any other info about what might be about to happen.

This evening I logged into my lloyds online banking to find – YES – my savings and isa are there – BUT MY CURRENT ACCOUNT AND CC ACCOUNT have disappeared!! I can’t transfer money from my savings account to my current account – there is simply no reference to it. And since I make all my payments online from my current account I CAN’T PAY ANYONE. My list of payees was associated with my current account and it has now disappeared. Deep breath. At this point I am very angry.’

Excellent!

2. The Treasury and its various agents from Goldman Sachs to Tony Blair have been trying to sell the TSB part of the Group ever since the Co-Op bank deal broke down. They have failed miserably – suggesting that this is not a good place for your money to be. It’s a blessing that the Co-Op deal broke down, because the Co-Op is now insolvent, and its customers (ordinary folks like you and me) are going to be the lucky recipients of Britain’s first bailed-in haircut. It could be 5%, could be 95%: but remember, it’s all your fault. This is an example of Coalition touchy-feely service; it is entirely abnormal, and trust me, you should be worried already.

3. Although not much has been said about this, TSB is to be floated on the London Stock Exchange next year. Floating former mutuals is, if you recall, precisely how we got into this cesspit in the first place. Anyway, what makes this deal unique even in banking history is that the flotation will be selling a bank to the market which, at the minute, has no tiller at the helm at all. It is a shell, with no management and no fiduciarily responsible management. Nobody: no company officers whatsoever. So there will be no accountability anywhere until ownership is sorted out. Another reason why your money is going to be in a very dark place.

Now obviously, given Lloyds is going to be the flagship brand partly owned by the Treasury, they’re not going to leave any toxic sh*t there, are they? No, I doubt that very much. I may be wrong, but I’d imagine the HBOS mountain of irradiated Fukushima rods will either be quietly buried in the Treasury write-off half-point type at next year’s Budget….or hidden somewhere in the float’s offer documentation. It’ll be under some anodyne heading such as ‘miscellaneous assets’ or ‘extraordinary items’ or ‘Mrs Bingham’s clothing allowance’.

If this is spotted by the City – frankly, even if it isn’t – then the ‘launch’ may not go according to plan….and TSB will go down in history as being the bank with a maiden share price that left the Titanic’s maiden voyage looking like a qualified success.

Anyway, this is the summary heads-up: if your branch is to be TSB’d, you just got sold into slavery through becoming the customer of an unsaleable bank with added sub-prime content, no management – and a slim chance of being City-owned next year.

I am not qualified to offer financial advice, but this is what I would do if this unfortunate forced change applied to me:

THINK OF THE CO-OP, AND GET THE MONEY INTO SOMEWHERE ELSE NOW

Ithangyooo.

www.hat4uk.wordpress.com / link to original article

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