Three grant-making Lloyds TSB foundations to be renamed the Lloyds Bank Foundations

Following Lloyds' split with TSB, the foundations will each receive a proportion of up to 0.5 per cent of Lloyds Banking Group's profits, or £15m, whichever is higher

Lloyds Banking Group
Lloyds Banking Group

The three grant-making Lloyds TSB foundations will be renamed next year as the Lloyds Bank Foundations following the Lloyds’ split with TSB.

Lloyds TSB Foundation England and Wales, Lloyds TSB Foundation Northern Ireland and Lloyds TSB Foundation for the Channel Islands will each receive a proportion of up to 0.5 per cent of Lloyds Banking Group’s profits, or £15m, whichever is higher.

The total funding is split between the foundations according to the size of the country to which they belong.

The foundation for England and Wales received £25m this year from the bank, and a spokeswoman said she did not expect this figure to fall in future.

The group’s annual donation to the Bank of Scotland Foundation will double to £2m from 2014.

This foundation was set up by Lloyds after a long-running legal dispute between the bank and the Lloyds TSB Foundation for Scotland, which started after the bank announced plans to reduce the amount it gave to its four UK foundations because of major losses it incurred in the 2008 banking crisis.

The Foundation for Scotland was unable to agree a funding settlement with the group and was told in February 2010 that it would not receive any more funding from the bank once its existing agreement runs out in 2018, but will retain control over the shares it has owned in the bank since its creation.

When the group’s agreement with the Lloyds TSB Foundation for Scotland runs out in 2018, the Bank of Scotland Foundation will be moved to the same funding arrangement as the other foundations, Lloyds said.

The bank said the new funding settlement would allow the Bank of Scotland Foundation to launch a new medium-sized grants programme.

A spokeswoman for Lloyds TSB Foundation for Scotland said: "Our legal agreement with Lloyds Group continues completely unchanged. The amount we receive is a percentage of the group’s profits which is just under a fifth of 1 per cent."

She said the grant-maker owned 15 million shares in Lloyds and would continue its work when its agreement with the bank ends in 2018, using income from the shares.

In October, Lloyds reported a third-quarter pre-tax loss after having to set aside an extra £750m for mis-selling personal protection insurance, bringing the total it has put by for this purpose to £8bn.

On Wednesday, the Financial Conduct Authority fined Lloyds TSB and Bank of Scotland £28m for serious retail conduct failings.

Professor Sir Ian Diamond, chair of the foundation for England and Wales, said of the announcement about funding for the foundations: "This agreement sees the creation of a legacy that will guarantee the foundations significant funding and maintain an independently durable and lasting financial future. Together we have created a meaningful and sustainable partnership for us all."

A spokesman for Lloyds group said TSB, which became a separate bank in September, was an independent bank and it would be up to its board to make decisions about supporting charities. 

- The story was corrected on 13 December 2013 to amend an incorrect figure given by the foundation for England and Wales for the amount it received this year from the bank.

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