New blow to Lloyds TSB's Create as chief quits

Lloyds TSB's ambitions to build a significant business in the "mass affluent" market were dealt a severe blow yesterday when the head of its Create wealth management service left a week after its launch.

Laurel Powers-Freeling is leaving to join Marks & Spencer as head of the group's financial services division. The 44-year-old American will also have a seat on the main board.

Her decision to quit Lloyds raises questions about the prospects of Create, whose launch was delayed by three months. Lloyds TSB has invested £100m in the project, which is aimed at customers with salaries of £60,000-plus and "investable assets" of over £100,000. But the market has become crowded with a host of new entrants, including a joint venture between HSBC and Merrill Lynch which was launched earlier this year.

Lloyds TSB declined to say how many new customers Create attracted but said 40,000 were being transferred from its private banking unit.

The bank tried putting on a brave face on the defection yesterday. "Obviously there is a lot of mobility in the industry, particularly at a senior level," said a spokeswoman. "It is a testament to the quality of our people that she is in demand."

She will be replaced by Chris Wiscarson, who is Lloyds TSB's head of international banking.

At Marks & Spencer, Ms Powers-Freeling replaces Dave Towell, who is retiring. On the M&S board she takes over responsibility for financial services from the former finance director, Robert Colvill, who is also retiring next year.

Ms Powers-Freeling becomes the third woman on M&S's 12-strong board. She joins Alison Reed, the finance director and Dame Stella Rimington, the former head of MI5 who is an M&S non-executive.

She joins M&S on 6 November when the company reports its interim results. Her pay has not been disclosed.

She will also be responsible for the group's store card as well as personal loans, life assurance, and unit trusts.

Ms Powers-Freeling joined Lloyds TSB in 1994 as finance director at Lloyds Abbey Life. She is a graduate of Columbia University and Massachusetts Institute of Technology and worked at McKinsey, the management consultants. She later worked at Morgan Stanley and Prudential. She is married with two children.

Financial services have been one of the few bright spots at M&S over the past three years. However, profits at the division fell from £115m to £96m last year due to lower charge card profits following M&S's decision to accept major credit cards.