Will the Lloyds TSB switch really be "seamless"?

Maybe not.

For the 4.6 million Lloyds TSB customers being forcibly switched to the new TSB Bank as of 9 September, the move will be a "seamless transition." So says Antonio Horta-Osorio, chief executive of Lloyds Banking Group in an interview with the BBC. According to Horta-Osorio, the only change customers will notice will be a change of name. There is a bit more to it than that.

Ahead of the European Commission imposed carve up of Lloyds TSB, the group has a network of almost 2,000 branches. Before long, customers of the new TSB Bank will have a network of only 631 branches compared to the new Lloyds network of around 1,300 outlets. Customers of the new TSB Bank wanting to use a re-branded Lloyds branch will be treated as customers of a rival bank and pay service charges accordingly.

Lloyds customers using a newly re-branded TSB branch or vice-versa – TSB customers using a Lloyds-branded branch – will also find that their deposits will take longer to reach their accounts. Lloyds and TSB will, after all, be totally separate banks. In all of this, it is hard to regard the customer as being on a winner but the banks will be on a "nice little earner" in the future if you dare to use the wrong brand of branch.

The European Commission and the UK government will however pat themselves on the back and proclaim that an additional bank means more choice for the consumer so must be a good idea. Pure poppycock but the exercise has provided a windfall for IT contractors and branding consultants, among others. For Lloyds, the cost of this exercise has been massive: somewhere between £1.3bn and £1.5bn and counting.

As for being "seamless"? Well customers of TSB – in addition to having a branch network that has shrunk by two-thirds – will need to use new bank cards and negotiate around a new website. The website is down for much of this weekend by the by but in fairness to the bank, this has been flagged up well in advance. Then there is the management of Lloyds and the new TSB. In fairness to them, the project has been a massive undertaking and the TSB launch is going ahead next week on schedule.

For that, the management of Lloyds TSB deserves considerable credit. But by one measure – the inability to handle and assess customer complaints – Lloyds TSB is in a league of its own. The statistics released yesterday by The Financial Services Ombudsman were a shocker and shame Lloyds TSB.

It came as no surprise to read that a whopping 43 per cent of all PPI complaints in the first half of the year related to Lloyds and its various subsidiary brands. Lloyds has form as regards PPI – it was the most successful in selling – or mis-selling PPI – and has been getting more practice than most in handling PPI complaints. One might be forgiven for thinking that they would have got the hang of it by now. Not a bit of it. In February, it was fined £4.3m for dragging its heels in delaying PPI compensation to 140,000 customers.

Fast forward a few months and we learn that Lloyds complaints handling process is so dire that the Ombudsman found against Lloyds TSB in 90 per cent of PPI cases; as regards its Bank of Scotland business unit, the figure was not much better at 87 per cent. By contrast, the Ombudsman found against HSBC in less than one case in two (45 per cent) while Royal Bank of Scotland did even better with only 34 per cent of Ombudsman complaints relating to PPI mis-selling going against the bank.

For the record, the figure at Nationwide Building Society was a mere 7 per cent. Customers of the new TSB may be forgiven for hoping that certain aspects of Lloyds TSB’s customer service ethos remains with the new Lloyds.

Lloyds TSB. Photograph: Getty Images

Douglas Blakey is the editor of Retail Banker International

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PMQs review: Theresa May shows how her confidence has grown

After her Brexit speech, the PM declared of Jeremy Corbyn: "I've got a plan - he doesn't have a clue". 

The woman derided as “Theresa Maybe” believes she has neutralised that charge. Following her Brexit speech, Theresa May cut a far more confident figure at today's PMQs. Jeremy Corbyn inevitably devoted all six of his questions to Europe but failed to land a definitive blow.

He began by denouncing May for “sidelining parliament” at the very moment the UK was supposedly reclaiming sovereignty (though he yesterday praised her for guaranteeing MPs would get a vote). “It’s not so much the Iron Lady as the irony lady,” he quipped. But May, who has sometimes faltered against Corbyn, had a ready retort. The Labour leader, she noted, had denounced the government for planning to leave the single market while simultaneously seeking “access” to it. Yet “access”, she went on, was precisely what Corbyn had demanded (seemingly having confused it with full membership). "I've got a plan - he doesn't have a clue,” she declared.

When Corbyn recalled May’s economic warnings during the referendum (“Does she now disagree with herself?”), the PM was able to reply: “I said if we voted to leave the EU the sky would not fall in and look at what has happened to our economic situation since we voted to leave the EU”.

Corbyn’s subsequent question on whether May would pay for single market access was less wounding than it might have been because she has consistently refused to rule out budget contributions (though yesterday emphasised that the days of “vast” payments were over).

When the Labour leader ended by rightly hailing the contribution immigrants made to public services (“The real pressure on public services comes from a government that slashed billions”), May took full opportunity of the chance to have the last word, launching a full-frontal attack on his leadership and a defence of hers. “There is indeed a difference - when I look at the issue of Brexit or any other issues like the NHS or social care, I consider the issue, I set out my plan and I stick to it. It's called leadership, he should try it some time.”

For May, life will soon get harder. Once Article 50 is triggered, it is the EU 27, not the UK, that will take back control (the withdrawal agreement must be approved by at least 72 per cent of member states). With MPs now guaranteed a vote on the final outcome, parliament will also reassert itself. But for now, May can reflect with satisfaction on her strengthened position.

George Eaton is political editor of the New Statesman.