Lloyds TSB set for £80m deal to sponsor London Olympics

Lloyds TSB is set to become the first sponsor of the London Olympics in a deal worth an estimated £80m.

A source close to negotiations said a deal should be completed soon between the bank and the 2012 Games organisers, Locog, which aims to raise up to £750m through sponsorship.

Lloyds is thought to have beaten off competition from the rival banks HSBC, Bank of America and Citigroup, which had been linked to the deal. Last month, Barclays, Locog's main lender, decided not to bid in light of its £60m-plus endorsement of Premier League football.

The "deal" reflects a more decisive strategy at Lloyds TSB, following a high turnover of personnel. Nigel Gilbert, who joined as marketing director from the electronics giant Lowe last October, is thought to have been involved in talks with Locog.

A spokeswoman for Lloyds TSB, which gives 1 per cent of profits to charity but has not previously sponsored sport or the arts, would not confirm the report in Marketing magazine that it would back the Olympics. "As the UK's largest bank, we get approached with all sorts of sponsorship opportunities," she said.

A spokeswoman for Locog would not comment on the report, but stressed no deal had been finalised. "It is important to remember the tender is still open and so nothing has been finalised. We are still on target to make an announcement by March."

Locog's sponsorship negotiations have been led by commercial director Chris Townsend, who had hoped to clinch an initial deal worth £100m. Locog has identified a further five categories for tier-one sponsors which they hope to sign up this year. In return, the firms will be granted limited use of the Olympic rings as incorporated in the 2012 Games logo which is on the drawing board. Sponsors will also be given tickets and hospitality opportunities at the Games and the cachet of calling themselves official Olympic sponsors.

Blue-chip firms will probably assemble the funding by combining their budgets for marketing and corporate social responsibility (CSR). Big companies have an annual CSRbudget of up to £20m, and a London-based bank could easily justify spending that on the Olympics. CSR benefits would include enthusing local staff to take up active lifestyles.