Twenty years after disappearing from the high street, the TSB bank will reappear in towns across the UK on Monday when more than 630 branches that were Lloyds units on Friday reopen with a new identity.
Best known for its slogan "the bank that liked to say yes", the standalone TSB name was axed when the bank merged with Lloyds in the 1990s. But the bank, founded in Dumfriesshire as the Trustee Savings Bank in 1810 by the Reverend Henry Duncan, will become Britain's eighth largest high street bank when relaunched.
The 39% taxpayer-owned Lloyds Banking Group will also have a new image after the spin off. Both "new" banks are being backed with multimillion-pound marketing campaigns
More than 4.6m Lloyds customers have been transferred to the 631 branches being rebranded as TSB. Around 8,500 staff are also being switched to the new bank, with £30m spent on branding and advertising.
The remaining 1,300 LloydsTSB branches will be rebranded as Lloyds Bank. Lloyds' new look – it has retained the iconic black horse – will not be made public until 23 September, though about 100 branches will display the new signage from this morning. The TSB branch rebranding started last night and will be complete by Wednesday evening.
Lloyds has been forced to split off and rebrand the TSB branches by the EU as a result of the £20bn of taxpayer money pumped into the bank during the 2008 bailouts. It has pledged to turn TSB back to its heritage as a "local" bank. The 631 branches were scheduled to be sold to the Co-operative Bank but the collapse of that deal earlier this year means it is likely the TSB network will be floated on the stock market as a separate bank.
The TSB is being unveiled a week before an industry-wide current account switching service is launched to reduce the hassle of moving a bank account.
Lloyds chief executive, António Horta-Osório, has said TSB will be a "real challenger on the high street", describing it as a "completely clean" bank, untainted by the turbulence that at times threatened to overwhelm the financial sector in recent years. It is also unencumbered by mis-selling claims. But some personal finance experts are sceptical as to whether TSB will make a big impact on the market as to start with, TSB's current account and other products will simply "mirror" LloydsTSB's offerings.
"Over time, TSB will look to offer its own products. Plans are not yet finalised and we will look to update on this in due course," said a TSB spokeswoman, adding: "It is likely that interest rates will remain aligned between TSB and Lloyds for a period of time after launch to simplify things for customers who might want to 'stay' with Lloyds, or 'go' to TSB."
TSB will offer a version of the LloydsTSB Classic account that pays 1.5% in-credit interest from £1, 2% from £1,000, and 3% from £3,000 to £5,000, provided the customer opts in. Andrew Hagger at personal finance website MoneyComms said that if TSB was going to carry on offering existing products, "I don't think they are going to make massive inroads into their competitors' slice of the market".
"They either need to come up with something that is different/innovative, or build a good reputation for customer service," Hagger said.
Richard Lloyd, executive director of consumer organisation Which?, said: "The current account market desperately needs more competition, and TSB has a golden opportunity to offer something different to attract new customers."
TSB is using the LloydsTSB Scotland banking licence, which is separate from the main Lloyds Banking Group licences, which means customers will be fully protected if they have up to £85,000 of savings tied up in TSB and £85,000 with another Lloyds Banking Group brand such as Halifax.
