Santander acquires TSB
Has the wandering orphan has finally found a home?
There is a rationale to Santander’s acquisition of TSB.
The Spanish owned Santander made its entry into the UK market, swallowing low hanging, though somewhat overripe fruit, following the great regulatory disasters afflicting UK banking in 2008. Alliance and Leicester, Giro Bank and Bradford and Bingley were early day acquisitions and merging the hotchpotch IT systems, not to mention the diverse, to put it mildly, cultures of three separate entities, must have given CEO Steve Pateman nightmares. Lobbing another banking system misfit into the pot has a logic, one reinforced by the Spanish ownership of the two actors here.
Along the way TSB was acquired by Lloyds Bank, then under the seemingly anxious to be seen in a relationship, Peter Ellwood. Like the guy grabbing the last girl on the dancefloor so he was not seen by his contemporaries leaving alone.
It was a marriage doomed for divorce.
It had the easy fit virtues of merging a Jaguar agency with a Lada distributor. Lloyds’ customers had a major culture shock when the TSB personal account software, designed the manage its blue collar clientele, mercilessly refused to honour the golf club, bar bill cheque that took the account a miserable few quid over, as had been the way. I will not go into other culture clashes and Lloyds did benefit from adding TSB’s invoice finance operations to its own.
Compelled to call time on the marriage by the European Commission, following the UK government hand out when rescuing Bank of Scotland, Gordon Brown and the UK banking system from ignominy, I doubt Lloyds shed few tears as TSB packed her bags and walked, helpfully taking a few Lloyds branches feeing the chill, with it. The newly independent TSB has an IT disaster that did little to encourage customers to stay and its acquisition by Santander allows that, now mighty, component of the UK financial services industry to demonstrate that its recent irritation with the cloying and margin killing, regulation of the FCA, was a but hiccup. We will see.
The TSB was born of worthy culture to encourage thrift and prudence among the UK’s less monied. Passed around by the big players, it never reasserted it intended role as UK banking shed its own values as a profession and became a financial services bazaar, just when many people in the UK needed TSB’s values most.
A cruel one-off example. One of my dearest friends was a TSB adherent and he was accosted front of house by a financial services salesperson, a new phenomenon then, who proclaimed, “Good morning sir, I see you have just had some very good luck”.
The remark was prompted by a substantial, single credit entry on his bank account.
It was there as my chum had paid in the life insurance payout of his beautiful young wife. She had recently died, in hospital and in his arms, of cancer leaving him with two young boys to bring up.