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TSB returns to high streets

The new bank is unencumbered by scandal. But can its new chief exec create a bank people want to join?

by Emma Haslett
Last Updated: 11 Oct 2013
‘Like the legend of the phoenix’ – as squeaky-voiced crooner Pharell Williams sang in this summer’s chart-topper Get Lucky – TSB, ‘the bank that likes to say yes’, has been reborn, rising from the ashes of Lloyds’ 631-branch Project Verde network.

For the time being TSB – which is made up of branches Lloyds was told to sell off by the EU as part of the conditions of its 2008 bailout – will remain under Lloyds’ control. But the bank says it wants to float the new brand by the middle of next year.  

The good news is that the bank’s resurrection doesn’t include the heinous orange-and-blue colour scheme it sported in the early nineties. Instead, it features white lettering on three joined circles, with the tagline ‘welcome back to local banking’. Considering Lloyds has 2,300-odd branches in comparison to TSB’s paltry 631, customers who have to travel to reach their local TSB might see a touch of irony in that…

Although customers were told which bank they were with based on their sort codes, new TSB customers were given the option of switching back. And of the 4.5 million designated as TSB customers, 4,000 have asked to stay with Lloyds. Not a bad figure.

Interestingly, though, 600 have switched the other way. Perhaps that’s something to do with the fact that, as Lloyds chief exec Antonio Horta-Osorio pointed out, it’s ‘completely clean’ – unencumbered by PPI mis-selling scandals, Libor fixing, bailouts, over-paid staff, toxic assets...  

In fact, having been absorbed into Lloyds in 1995, it’s essentially been in hibernation through the whole of the previous economic cycle – from the boom of the late 90s to the bust of 2007.

So this is a chance for Paul Pester, the new bank’s chief executive (an Oxford physics graduate who has led Project Verde since May 2011), to create the kind of bank people want to become customers of, rather than grudgingly join.

What may be a problem is that as the branch network was originally supposed to be absorbed into the Co-operative Bank under a deal which fell through last year, Pester was never really supposed to end up as the chief executive of a retail bank.

He has experience at Santander UK, where as managing director he oversaw the integration of Bradford & Bingley with Abbey and Alliance & Leicester – but creating a new brand from scratch is a different challenge altogether. No pressure, then…

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