Lloyds to be a bid- free zone till 2006

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The Independent Online

Eric Daniels, Lloyds TSB's chief executive, has ruled out any major acquisitions for at least two years.

His decision in effect removed a large part of the role set out for the finance director, Philip Hampton, and led to his departure last week.

Mr Hampton, a former merchant banker, arrived at Lloyds 18 months ago, having masterminded the demerger of Lattice from BG. He was put in charge of securing a European acquisition for the bank, but no deal was forthcoming.

Mr Daniels replaced Peter Ellwood as chief executive last summer. His back-to-basics approach brought a review of Scottish Widows, the life assurer which Lloyds kept after negotiations with Prudential collapsed, and the sale of the group's Brazilian and New Zealand operations.

These tasks used Mr Hampton's deal-making skills but their completion hastened his departure with a £600,000 payoff.

The City has focused on disagreements over whether Lloyds should maintain its final dividend - with Mr Hampton wanting to reduce a payout yielding 7.5 per cent on the group's shares, nearly twice the average of the FTSE 100. However, discussions about the final dividend have yet to begin within Lloyds' boardroom.

Mr Daniels is set to reveal a £100m programme of spending on IT systems and support for brand managers when Lloyds unveils its results in early March.

He wants to increase the amount of "wallet" - the total purchase of financial services - that Lloyds wins from its customers from the current 33 per cent to over 50 per cent. This will involve giving Lloyds customers cheap deals on other products sold by the group, such as mortgages and unit trusts.

The programme aims to give more power back to the branch managers, reversing a cost-cutting strategy started over a decade ago.

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