Lloyds, the new TSB Bank and how customers are affected

Artist's impression of how the new branch will look
Image caption More than 600 branches will be rebranded as TSB

The accounts of millions of Lloyds customers are being transferred to a new stand-alone bank, called TSB.

The new institution faces an element of uncertainty after a proposed deal to sell 631 branches to the Co-op collapsed.

Instead TSB will be sold through a listing on the stock market, probably in late 2014.

Antonio Horta-Osorio, chief executive of Lloyds Banking Group, says the transition for customers will be "seamless". It will not affect the key functions of their accounts, and they do not need to do anything at this stage.

However, there have been website problems on the launch day.

Which customers are affected?

Millions of Lloyds current account customers are being moved to a new bank called TSB. They are customers of more than 600 branches picked by Lloyds Banking Group in the summer of 2012, including all of its Cheltenham & Gloucester branches, and all Lloyds branches in Scotland.

You can browse the list to see which branches are affected.

This will potentially affect 4.6 million customers, including 3.5 million in England and Wales. The vast majority are personal current account customers, but there are some business customers too.

Have they been warned this is happening?

All of the customers in England and Wales had already received a letter just before Christmas explaining to them that their account was going to be transferred to the TSB Bank.

Mr Horta-Osorio said that all these customers would notice was a change in the name of the bank in the early stages.

When the transition is made, customers can choose to leave TSB if they wish to, and return to banking with Lloyds. However, this will be a bit like moving accounts to another bank.

So what happens next?

The branches affected will change their signs and branding to TSB in the middle of September.

This will be followed by bank statements, cheque books and debit and credit cards all being altered to carry the TSB brand.

Bank account numbers and sort codes will remain the same. No-one's cards will stop working. They will simply be reissued with a new name for the bank, in due course.

Anyone who is worried can call a helpline at Lloyds on 0800 028 0428.

Image caption Millions of customers have received letters explaining the move

What about mortgages, overdrafts and interest rates?

All mortgages will carry on as normal, and interest rates will continue on existing overdrafts, savings and so on.

In the long-term, any new owner of TSB Bank will be able to determine what rates are offered.

So how did the Co-op feature in all this?

The Co-op was in talks to buy all these branches and so run the new TSB Bank with all these millions of customers' accounts.

But this deal has now fallen through.

Instead, the stand-alone TSB Bank will be sold through a listing of shares on the stock market. So the owner or owners of this bank are presently unknown.

When will we know more?

The new TSB Bank's flotation on the stock market will probably not take place until the second half of 2014.

The sale was demanded by Brussels. So, the UK government and Lloyds will need to ask the European Commission to extend its end-2013 deadline for the sale.

Are my savings safe?

All customers of banks with a UK banking licence have a guarantee of safety on the first £85,000 of their savings per person, per institution if a bank, building society or credit union collapses.

The new TSB Bank will be a separate institution, technically taking over the banking licence of Lloyds TSB Scotland.

This means that, for example, up to £85,000 saved in a Halifax account and up to £85,000 saved by the same person with TSB would all be safe.

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