Top executives quit and Create more problems for Lloyds TSB

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Lloyds TSB is to conduct a further review of its troubled private banking operation, Create, after the departure of two leading executives.

Richard Charnock, who was in charge of customer services and finance, and Paul Draycott, the marketing director, have left in recent weeks. Their departures come only a few months after the head of the operation, Laurel Powers-Freeling, jumped ship to take charge of Marks & Spencer's financial services arm.

Last month Lloyds TSB admitted that the operation had lost £33m on business last year, largely thanks to the falling markets putting off potential investors.

The business only started 13 months ago when Lloyds TSB decided to rebrand its private banking operation and turn it into a wealth management operation.

It trumpeted a link-up with Goldman Sachs, the giant US investment bank which was to provide a share-dealing and advice service. But the relationship with Goldman has yet to be activated and Lloyds TSB has admitted it is reviewing the deal. "The relationship with Goldman is in tact," said a spokeswoman. "We are looking at how we can use Goldman's services, and when or where they will be appropriate for our clients."

Lloyds TSB transferred 40,000 private banking clients to Create last year. It is understood that the number of customers still on the service has shrunk substantially.

Meanwhile, the bank is believed to have scaled back its marketing plans for the service. Within Lloyds TSB there has been disagreement about which customers it should be targeting, with Mr Charnock complaining Create could take customers from Scottish Widows, another Lloyds TSB business.

Coutts, owned by the Royal Bank of Scotland, is the only private banking service not to suffer in the economic downturn.

Gordon Pell, RBS director in charge of Coutts, said recently: "It's like Custer's last stand in the private banking market – and we intend to be the last one standing."