Reuters - Video

EDITION: U.S. | U.K. | IN

Business

TSB debuts - but is it a good bet?

Friday, Jun 20, 2014 - 02:15

June 20 - Lloyds sells a bigger-than-expected share of TSB in a more aggressive approach to spinning off the new challenger bank. Hayley Platt looks at TSB's prospects at a time when a string of other small lenders are coming onto the market to take on the UK's big four.

▲ Hide Transcript

View Transcript

The UK's TSB, an offshoot of Lloyds Banking Group, got off to a flying start on its first day of trading. Shares were up more than 10 percent thanks to strong investor appetite. Lloyds had originally planned to sell just a quarter of its stake, but upped it to just over a third. The shares went on sale at 260p each, valuing the new retail bank at £1.3 billion. TSB is among the so-called 'challenger banks' competing with the UK's big four high street lenders. Its CEO Paul Pester says it wants to bring a new type of bank to Britain. SOUNDBITE: Paul Pester, Chief Executive Office, saying (English): "We've taken all sales targets out of our telephone operators for instance, so when you call us we will not be trying to sell you a credit card or home insurance. If you go into our branches they're measured on how good a customer service they deliver, not on their sales performance." TSB has 4.5 million customers and operates 6 percent of Britain's bank branches. And although it only has 4.2 percent of market share, it's not expected to stay small for long. Dominic Elliott of Reuters Breakingviews. SOUNDBITE: Dominic Elliott, Reuters Breakingviews, saying, (English): "TSB wants to grow very fast. It's outlined how quickly it wants to grow its mortgage book for example and there's a worry there that you get the same sort of problems that you have with Northern Rock, with Alliance and Leicester and Bradford and Bingley, where these banks push for growth. They've got the worst customers if you like, who are the least credit worthy and there's a worry that TSB could have the same problem." Further new British banks are expected to float over the next two years. The question for investors is whether to buy TSB now or wait and see who else comes to market. SOUNDBITE: Dominic Elliott, Reuters Breakingviews, saying, (English): "For starters it's going to be given 450 million pounds cash to develop its own IT system when it finally severs its links entirely from Lloyds. It will also be insulated from any of the scandals that have affected Lloyds. And it's got a very strong balance sheet, it's got a lot of capital but that itself is one of the problems. Because at the moment TSB hardly makes a return on equity, it's only about 5 percent, very low." UK tax payers still own a quarter of Lloyds. Part of the terms of its bailout with EU regulators, was that it slimmed down its operations. It has until the end of next year to sell its remaining shares in TSB.

TSB debuts - but is it a good bet?

Friday, Jun 20, 2014 - 02:15

Money »

S&P 500 just shy of record S&P 500 just shy of record

Wed, Aug 20, 2014 - (2:23)

Apple hits $100 a share Apple hits $100 a share

Tue, Aug 19, 2014 - (2:06)

Nasdaq closes at 14-year high Nasdaq closes at 14-year high

Mon, Aug 18, 2014 - (2:23)

Putin puts Wall Street in buying mood Putin puts Wall Street in buying mood

Thu, Aug 14, 2014 - (2:10)

We've become a promotional culture-RetailMeNot's Bodge We've become a promotional...

Thu, Aug 14, 2014 - (4:39)

Dow back to positive territory for year Dow back to positive territory for year

Wed, Aug 13, 2014 - (2:18)

Markets cheer Russia's Ukraine exit Markets cheer Russia's Ukraine exit

Fri, Aug 08, 2014 - (1:50)

Russia, Iraq push Dow to three-month low Russia, Iraq push Dow to three-month low

Thu, Aug 07, 2014 - (2:27)

Wall Street gains but telecom disconnected Wall Street gains but telecom disconnected

Wed, Aug 06, 2014 - (2:28)

Stocks zapped by energy weakness Stocks zapped by energy weakness

Tue, Aug 05, 2014 - (2:46)

Stocks recover with refocus on earnings Stocks recover with refocus on earnings

Mon, Aug 04, 2014 - (2:19)

The Exchange »

The Exchange: Hot commodity The Exchange: Hot commodity

Wed, Jul 16, 2014 - (9:25)

The Exchange: Constitutional crusade The Exchange: Constitutional crusade

Wed, Jun 25, 2014 - (11:35)

The Exchange: The value of money The Exchange: The value of money

Mon, Jun 02, 2014 - (9:53)

The Exchange: China’s Second Continent The Exchange: China’s Second Continent

Tue, May 27, 2014 - (9:35)

The Exchange: A master of business arts The Exchange: A master of business arts

Thu, May 08, 2014 - (8:24)

The Exchange: America's bankrupt cities The Exchange: America's bankrupt cities

Mon, May 05, 2014 - (8:52)

The Exchange: Let the rocking commence The Exchange: Let the rocking commence

Tue, Apr 08, 2014 - (8:13)

The Exchange: The Moneyball fallacies The Exchange: The Moneyball fallacies

Mon, Mar 24, 2014 - (9:54)

Is doing good a good business? Is doing good a good business?

Mon, Mar 17, 2014 - (7:38)

Reuters Investigates »

Re-homing victim: "I could have been dead" Re-homing victim: "I could have been dead"

Wed, Feb 19, 2014 - (8:24)

Cops and loggers in the Amazon rainforest Cops and loggers in the Amazon rainforest

Fri, Jan 10, 2014 - (4:01)

"Passed around like a dog" "Passed around like a dog"

Thu, Aug 29, 2013 - (6:32)

Adopted, then abandoned online Adopted, then abandoned online

Thu, Aug 29, 2013 - (13:21)

How the DEA keeps its secrets secret How the DEA keeps its secrets secret

Mon, Aug 05, 2013 - (1:36)

How education lost its role as the great equalizer - Reuters Investigates How education lost its role as the great...

Mon, Dec 17, 2012 - (7:52)

Jihad Jane: From abused child to American jihadist - Reuters Investigates Jihad Jane: From abused child to American...

Sat, Dec 08, 2012 - (10:01)

Jihad Jane: The order to kill - Reuters Investigates Jihad Jane: The order to kill - Reuters...

Sun, Dec 09, 2012 - (10:39)

Moving Pictures »

"Old timers" sail the Chesapeake Bay "Old timers" sail the Chesapeake Bay

Mon, Aug 11, 2014 - (2:27)

Burned memories Burned memories

Fri, Aug 08, 2014 - (3:02)

Images of July Images of July

Thu, Jul 31, 2014 - (1:20)

World Cup: passion on the pitch World Cup: passion on the pitch

Fri, Jul 11, 2014 - (1:00)

A refugee in America gives back A refugee in America gives back

Wed, Jul 02, 2014 - (3:25)

A long search for refuge A long search for refuge

Fri, Jun 20, 2014 - (3:04)

World Cup: Around the globe in 50 goals World Cup: Around the globe in 50 goals

Fri, Jun 06, 2014 - (1:08)

VIVID – Sydney’s spectacle of light VIVID – Sydney’s spectacle of light

Fri, May 30, 2014 - (1:37)

The week that changed Boston The week that changed Boston

Mon, Apr 14, 2014 - (3:28)