Executive Summary
Lloyds Banking Group (LON:LLOY) changed its name from Lloyds TSB in 2009, following the acquisition of HBOS. The company provides a broad range of banking and financial services to personal and business customers, mainly in the UK, although it has worldwide interests in over 40 countries. Lloyds Banking Group is listed on both the London and New York Stock Exchange, and is one of the largest companies within the FTSE 100. Its brands include Lloyds TSB, Halifax, Bank of Scotland, Scottish Widows, Clerical Medical, and Cheltenham and Gloucester. In 2009, the company reported revenue of £23.96m and made a profit before tax of £1.04m.
Company History
Lloyds TSB was formed in 1995 following the merger of Lloyds bank and TSB. Further key milestones in the company’s history are provided below.
- June 1999: TSB and Lloyds Bank branches are rebranded Lloyds TSB;
- March 2003: Scottish Widows joins the Group, creating one of the largest providers of life, pensions and unit trust products;
- December 2005: the company reached an agreement to sell the credit card business of Goldfish to Morgan Stanley for a premium if £175m
Current Events
- January 2009: Lloyds TSB completed the acquisition of HBOX (LON:HBOS), making it the largest retail bank in terms of customer numbers in the UK, and creating Lloyds Banking Group.
- March 2009: the company accepted funding from the UK government - as a result, the government (and UK taxpayers) currently own 43% of the bank [1]
- In recent news, Lloyds Banking Group is reported to be cutting jobs in its Insurance and Investments division [2]
Following the takeover of HBOX (LON:HBOS), Lloyds discovered that the company had bad debts of £13,4bn, £9bn of which were due to reckless lending on commercial property. As a result, Lloyds has reported a loss for the first half of 2009, compared with a profit of £2.78bn in the first half of 2008. [3]
Business Model
Lloyds’ business model is based on the development of strong customer franchises and deep customer relationships, and investing and acquiring for the long-term. [4]
The business is structured into three main divisions:
UK Retail Banking : UK Retail Banking operates under a number of well known brand names, including Lloyds TSB, Cheltenham & Gloucester, Scottish Widows, Halifax and…
