The new bank, which officially opened its doors yesterday, has made a great play of being born fully formed but notably lacks an intermediary channel. TSB says had the original sale of the business to the Co-op been completed, it would have simply piggy-backed onto its existing systems.
Following the collapse of the Co-op deal, plans were put in motion to build an intermediary channel from scratch and the bank has revealed to Mortgage Solutions that it will offer mortgages through brokers from 2014, probably toward the end of the year.
TSB chief executive Paul Pester said intermediaries would play an important part in the business going forward.
The new bank encompasses more than 600 branches and brings with it 4.5m customers. Its unveiling was supported by a slick cinema advert, billboard poster campaign and a promise to return to TSB’s local lending roots.
All products offered in TSB branches today are a mirror image of those in Lloyds Bank, primarily to avoid customer confusion, but the whole range will be differentiated in the coming months. It is understood that mortgages will be one of the first products to evolve.
All TSB’s mortgage customers have been split from Lloyds in the same way as current account and savers – based on the branch where the product was taken out. This means that no mortgages originated in the intermediary channel or via Lloyds TSB’s phone banking service should have made the switch.
Some mortgage accounts have been left with Lloyds, particularly those in severe arrears, to meet the European Commission’s ruling that TSB’s back book is at least as healthy as Lloyds TSB.
TSB said commercial sensitivity ahead of the float meant it was unable to offer certain figures, but TSB holds around £25bn of loans and the majority of these are mortgages.
Product director Mike Regnier said that TSB has a keen interest in buy-to-let but its portfolio is small at present given the low volumes of these mortgages originated in Lloyds TSB branches.
TSB may be promoting itself as a ‘local bank,’ but branch managers will not have the ability to overrule lending decisions made by its centralised computer systems.
Helen Rose, chief operating officer, confirmed that TSB completed 30 pipeline mortgages on its first day. Although, it will surely be difficult to attract new customers in the short-term when its products mirror what is now a major rival.
But any competition in the mortgage market is welcome and, given the fanfare surrounding TSB’s launch, it will be interesting to see what impact it has on the market.
