bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

A NEW range of specialist investment services for Hong Kong investors could emerge from the recent merger of Lloyds Bank and TSB Group.

   For in the far-flung corners of the banking and insurance giant's global empire answers are emerging as to how the diverse elements of the new group could be welded together.

   It is just over a month since Lloyds and TSB Group announced the merger of the two companies had been completed.

   TSB Group changed its name to Lloyds TSB Group and will be the quoted company and holding company for the new group.

   Lloyds Bank and TSB are subsidiaries of Lloyds TSB and their respective businesses are continuing unchanged.

   A planning unit has been appointed in London to review the various elements of the merged group. One of these is the future of Lloyds Bank's private banking operation and the Hill Samuel Group in Hong Kong.

   According to Peter Leuenberger, the general manager of Lloyds Bank International Private Banking, while a decision had yet to be made there were enough signs pointing to the future shape of the two operations.

  TSB chairman Nicholas Goodison hinted about future directions at the time of the merger launch.

   'We are both confident about the outlook for our own organisations as independent entities but we believe the merger will create a stronger, more competitive and efficient force in UK financial services,' he said.

   'We are determined that the merger will result in improvements in service for our customers, competitive products, reduced costs and improved earnings for our shareholders.'    Lloyd's and TSB had been in talks for about five years before deciding on a merger.

   Sir Brian Pitman, chief executive at Lloyds and Peter Ellwood, his opposite number at TSB, started serious discussions last September. The approach came from Lloyds.

   The combination of Lloyds and TSB will create a banking and insurance giant with assets of about HK$1.8 trillion, 90,000 staff, pre-tax profits of more than $22 billion, 3,000 branches, 15 million customers and coverage across Britain.

   There has been widespread speculation in Britain that the merger would result in a bloodbath for the group's employees.

   Banking analysts have speculated that between 10 and 15 per cent of the group's personnel in Britain could face the axe.

   Speculation about job cuts in Hong Kong, will probably be focused on Hill Samuel, which employs 13, and Lloyds Bank, which has about 120 staff.

  Mr Leuenberger said: 'For the time being it looks like they will maintain identities.

  'But it is difficult to say what is going to happen over the next 12 to 18 months.'    Mr Leuenberger, who is based in Zurich, said: 'Hill Samuel has a strong brand name. There appears to be no duplication between their operation and ours. They have a different client base to ours.'     He said that his operation was aiming for high net worth individuals with at least US$1 million to invest or deposit with its private banking operation.

   Hill Samuel, which generates the bulk of its business from multicurrency mortgages, is aiming for the newly emerging rich.

  'They are more complementary than duplicating, while the bulk of our operation is in Europe, the Asian market is very important for our private banking business because the market is growing so rapidly,' Mr Leuenberger said.

  'Europe has been saturated, while the potential of the emerging markets is unlimited.'   One immediate addition to Lloyds Hong Kong services that could arise from the merger would be developing a foreign exchange operation. This year, its global operation is expected to generate profits of more than $30 billion.

   Stephen Evans, first vice-president and senior manager, said: 'What do you do with the cash flow? You either increase dividends, buy-backs or consider acquisitions.

  'In the past we have been prepared to make acquisitions as has been seen with Cheltenham and Gloucester, the UK building society, and Lloyds Abbey Life.' 



Lloyd's merger reveals benefits