Lloyds told to pump extra £240m into TSB
Lloyds Banking Group was last night told to inject £240m into the revived TSB to boost its ability to challenge the Big Four British banks.
The move follows a review into retail banking by the Office of Fair Trading and the ability of the new banks being spun off by Lloyds and Royal Bank of Scotland to compete with existing players.
TSB will be set up with 631 Lloyds branches and will boast 4.6 million customers. It will be the eight biggest UK bank when it becomes a standalone entity.
But the OFT said it was concerned that TSB was "subscale" and could struggle against its larger rivals.
The funds are intended to help remedy that by strengthening TSB's finances and giving it the funds to grow its branches and market share more quickly in a tough economic climate.
All-time low interest rates will make it hard for the new bank because they squeeze the margins banks can make between what they pay to depositers and what they make on mortgages and loans.
Some £200m will be payable over four years to boost TSB's profitability with an additional £40m to improve customer acquisition and develop the TSB branch network.
Lloyds was also ordered to ensure that services such IT, that it is providing to TSB as part of the transfer, "do not limit TSB's ability to compete in the future".
- 1 Man on naked bike ride gets ejected after becoming aroused
- 4 Ann Summers survey reveals the UK's favourite sex position
- 5 Ayyan Ali: Pakistan's top model now appears in the courtroom rather than on the catwalk
Man on naked bike ride gets ejected after becoming aroused
Caitlyn Jenner's mother Ester thought her daughter, formerly known as Bruce Jenner, had transitioned for money
Charles Kennedy 1959-2015: A gifted, compassionate politician whose career was cut short by the 'demon drink' - latest news
Charles Kennedy dead: A guy once asked the Lib Dem leader who his favourite Muppet was and his letter response was wonderful
Jaden Smith wears gender fluid dress to high school prom with Hunger Games actress
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Why this year's general election was the most unfair in Britain's history
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...