Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom. It operates through three segments: Retail; Commercial Banking; and Insurance and Wealth. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal and small business customers. 

The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, debt financing, and debt capital market services to small and medium-sized entities, corporates, and financial institutions. The Insurance and Wealth segment offers insurance, investment and wealth management products and services. It also provides digital banking services. 

The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows brands. Lloyds Banking Group plc's origins are back in 1695. The company was founded by George Truett Tate on October 21, 1985, and is headquartered in London, United Kingdom.

Lloyds Bank is one of the oldest banks in the UK, tracing its establishment to Taylors and Lloyds founded in 1765 in Birmingham by button maker John Taylor and iron producer and dealer Sampson Lloyd II. Through a series of mergers, Lloyds became one of the Big Four banks in the UK. Bank of Scotland, which originated in the 17th century, is the second-oldest surviving UK bank after the Bank of England. 

In 2001, a wave of consolidations in the UK banking market led the former Halifax Building Society—which originated in 1853—to agree to a £10.8 billion merger with the Bank of Scotland. Trustee Savings Bank can trace its roots back to the first savings bank founded by Henry Duncan in Ruthwell, Dumfriesshire, in 1810. TSB itself was created in 1985 by an Act of Parliament that merged all the remaining savings banks in England & Wales as TSB Bank plc and in Scotland as TSB Scotland plc.

In 1995, Lloyds Bank plc merged with TSB Group plc, forming Lloyds TSB Group plc. In 2000, the group acquired Scottish Widows, a mutual life-assurance company based in Edinburgh, in a deal worth £7 billion. This made the group the second-largest UK provider of life assurance and pensions after Prudential. In September of the same year, Lloyds TSB purchased Chartered Trust from Standard Chartered Bank for £627 million to form Lloyds TSB Asset Finance Division, which provides motor, retail and personal finance in the United Kingdom under the trading name Black Horse.

Lloyds TSB continued to take part in the consolidation, making a takeover bid for Abbey National in 2001, which was later rejected by the Competition Commission. In October 2003, Lloyds TSB Group agreed on the sale of its subsidiary NBNZ Holdings Limited—comprising the Group's New Zealand banking and insurance operations—to Australia and New Zealand Banking Group. In July 2004, Lloyds TSB Group announced the sale of its business in Argentina to Banco Patagonia Sudameris S.A. and its business in Colombia to Primer Banco del Istmo, S.A. On 20 December 2005, Lloyds TSB announced that it had reached an agreement to sell its credit card business Goldfish to Morgan Stanley Bank International Limited for £175 million. In 2007, Lloyds TSB announced that it had sold its Abbey Life assurance division to Deutsche Bank for £977 million.

On 17 September 2008, the BBC reported that HBOS was in takeover talks with Lloyds TSB, in response to a precipitous drop in HBOS's share price. The talks concluded successfully that evening with a proposal to create a banking giant which would hold a third of UK mortgages. An announcement was made on 18 September 2008. On 19 November, the new acquisition and government preference share purchase were agreed upon by Lloyds TSB shareholders. HBOS shareholders overwhelmingly approved the deal on 12 December. Lloyds TSB Group changed its name to Lloyds Banking Group upon completion of the takeover on 19 January 2009. 

On 13 October 2008, Prime Minister Gordon Brown announced a government plan for the Treasury to invest £37 billion of new capital into major UK banks—including Royal Bank of Scotland Group, Lloyds TSB and HBOS—to avert a collapse of the financial sector. Barclays avoided taking a capital investment from the UK Government by raising capital privately and HSBC moved the capital to its UK business from its other businesses overseas. It was later confirmed that Lloyds TSB would have been required by the Financial Services Authority to take additional capital from the government if it had not taken over HBOS. After the recapitalisations and Lloyds' acquisition of HBOS, the UK Government held a 43.4% stake in Lloyds Banking Group.

On 12 February 2009, Eric Daniels, the CEO of the Group, was questioned about the banking crisis during a session of the Treasury Select Committee of the House of Commons. One of the key issues concerned Lloyds' takeover of HBOS and the amount of due diligence carried out before the acquisition. Daniels said that a company would always like to do more due diligence on another company, but there are legal limits on how much is possible before an actual acquisition. Losses were slightly more than the £10 billion originally identified by the due diligence owing to write-offs of property loans because of falling property prices and the lack of demand for it. The share price of Lloyds Banking Group fell 32% on the London Stock Exchange, carrying other bank shares with it. The then-Chairman of Lloyds, Sir Victor Blank, said in August that losses had been "at the worst end of expectations", and that the Lloyds board was surprised by the speed at which the losses—which were caused by the unexpectedly sharp contraction of the world economy in late 2008 and early 2009—happened. This position was confirmed by Archie Kane, a senior Lloyds executive in Scotland, in evidence to the Scottish parliament's economy committee in December.  

In February 2009, after it became apparent that the recession would be deeper than originally anticipated, the FSA was instructed to "stress test" the banks against a severe economic downturn. The FSA stated that the assumptions underlying the stress test were not intended to be a forecast of what was likely to happen but to simulate a near-catastrophic economic scenario. 

Asset Protection Scheme. Lloyds agreed in principle to enter the government's Asset Protection Scheme to insure it against potential future losses on previous loans—primarily on the old HBOS portfolio. The fee for this would have been paid for by the issue to the government of new 'B' shares, which could have increased the government holding to a maximum of c.62%—or higher if the government had bought all the ordinary shares issued to redeem the preference shares.

According to the Accord trade union general secretary Ged Nichols, Lloyds Banking Group had cut 30,000 jobs between February 2009 and August 2011; and in August 2011 it announced another 1,300 job losses. The group sold its 70% stake in insurance company Esure to Esure Group Holdings on 11 February 2010. The share was valued at around £185 million. 

 In April 2013, Lloyds sold its loss-making Spanish retail operation—originally Banco Halifax Hispania—and the local investment management business in Spain to Banco de Sabadell. Lloyds will receive a 1.8% stake in Sabadell worth about €84 million and an additional sum of up to €20 million over the next five years. In September, it was reported that the UK government was planning to sell up to a quarter of its shares in Lloyds Banking Group. The government sold 6% of its shares at 75p, raising £3.2 billion and reducing its stake to 32.7%. The UK government then sold a further 7.8% on 26 March 2014 at 75.5p raising a further £4.2bn and reducing its stake to 24.9%. A trading plan of incremental sales during 2015 reduced the publicly owned stake to below 10% by the end of October. Sales resumed in November 2016, as the holding was reduced to 7.99%. On 17 March 2017, the British Government confirmed its remaining shares in Lloyds Banking Group had been sold.

“Our purpose is Helping Britain Prosper. We do this by creating a more sustainable and inclusive future for people and businesses, shaping finance as a force for good.”

“We will lead in the bold decisions we make as a business, from where and how we invest, to the products and services we offer, to the workplace we create. We will never stop innovating to make sustainable, ethical choices easy and rewarding.”