Where is everyone moving their Lloyds Vantage money to?

kar999

Banks and bankers are now about as popular as a fart in a lift so although this move makes economic sense on their part, to us customers it's another sign of their arrogance and credibility.

I for one would happily join in moving my surplus money from Lloyds purely out of spite even if it is only a pimple on the bum of their balance sheets and would earn no more elsewhere. My branch managers commission may be depleted but sadly he's not the one whos to blame.

savetilibleed

grumpycrab wrote: »

So, the stupid question, how does the eSaver interest calcs work? Is interest calculated daily and will that include the bonus rate provided the account is still open in 12months time? (min balance is £1) e.g. if I have £X there for 6months then transfer all out - leaving £1 for the remainder 6months, will my gross interest be X*0.03/2 ?

Interest always calculated daily, as balance could change daily as you add and withdraw. OK you are not doing that but yes I would have used the calculation you have for a constant balance.

Rollinghome

anna42hmr wrote: »

Is it just me or what, but i think that we need to get perspective on this, they have not breeched any terms, and we customers etc are not entitled to the rates they held

Well my wife has had the offer of their "exclusive" account, but doesn't want it, and I don't know whether I did because I put the letter through the shredder without bothering to read it.

But just because we no longer expect banks to behave well let's not become too tolerant of them. They do have the moral obligation to treat their customers fairly just as does any other business. That I'd suggest includes treating customers equally in similar circumstances which, on the face of it, Lloyds have failed to do.

They also have an obligation to their shareholders to run their businesses competently and not to spend millions on advertising to encourage goodwill only to destroy it with the idiotic decisions made by the second-rate managers they employ.

I can well understand the annoyance caused to some of their customers at being "excluded" without the courtesy of an explanation and if Lloyds were a better managed company then so would they. It may be what we've come to expect of banks but that doesn't make it right.

ED

Proposal: several Lloyds Banking Group shareholders who are super-articulate contributors to the MSE forum (not me) attend the Lloyds Banking Group AGM in Glasgow on 18th May (a Wednesday) to express collective concerns about exclusion of some Vantage customers from eligibility to open an Incentive Saver offering 3% AER.

Firstly, are there any volunteers?

Secondly, can we collectively draft here some potential comments and questions to convey to Lloyds?

My two-pennyworth is included in Posts #94 + #115 of this thread. I would not bother were it not for the fact to date I consider Lloyds TSB has the best staffed counters in many high streets. I would not wish to see the bank fail.

What bullet-points do folk suggest be added, subtracted or adjusted from these initial ideas for use at the AGM:-

- Lloyds TSB, by barring some customers from opening an Incentive Saver at 3% AER, will lose funds from Lloyds savings accounts as well as Vantage current accounts

- Some 'excluded' customers will cease entirely their relationship with LTSB, resulting in all Vantage funds transferring to rival institutions

- Unfairness to some customers tends to spread by word-of-mouth-internet-and-media to loss of bank loyalty amongst family members, friends and colleagues

- Can Lloyds Banking Group assure shareholders it can regularly access funds more cheaply elsewhere rather than offering an Incentive Saver at 3% AER to potentially all Vantage customers with funds and savings totalling in excess of £5,000?

- What was the selection criteria for excluding many customers from the offer, as at late-April? It is noted some people with multiple Vantage current accounts have been offered Incentive Saver, so clearly the criteria is not to anger them into ditching Lloyds altogether.

- Does Lloyds TSB aim to reduce to one Vantage current account per existing customer and, upon such closures, to offer the 3% AER Incentive Saver to those currently excluded, thereby supplying the same interest rate for the funds upon the late-June drop from 4% AER in Vantage?

opinions4u

ED wrote: »

- Lloyds TSB, by barring some customers from opening an Incentive Saver at 3% AER, will lose funds from Lloyds savings accounts as well as Vantage current accounts

it's a commercial decision that somebody has to make. Those who make decisions about Vantage rates are different to those who make decisions about savings account rates. Perhaps the 3% rate is only being offered to those who don't currently save with Lloyds Tsb. The risk of damage to other savings balances is relatively small, although clearly some people have got the hump.

- Some 'excluded' customers will cease entirely their relationship with LTSB, resulting in all Vantage funds transferring to rival institutions

If those relationships are loss making surely this step is right for shareholders.

- Unfairness to some customers tends to spread by word-of-mouth-internet-and-media to loss of bank loyalty amongst family members, friends and colleagues

I assume this will be significantly less harmful than buying HBOS Corporate and needing a bailout as a result.

- Can Lloyds Banking Group assure shareholders it can regularly access funds more cheaply elsewhere rather than offering an Incentive Saver at 3% AER to potentially all Vantage customers with funds and
savings totalling in excess of £5,000?

They clearly already do. If they paid all their savers 3% they'd go bust.

- Does Lloyds TSB aim to reduce to one Vantage current account per existing customer and, upon such closures, to offer the 3% AER Incentive Saver to those currently excluded, thereby supplying the same interest rate for the funds upon the late-June drop from 4% AER in Vantage?

That would be a specific initiative that would not be relevant to a shareholder meeting. If it is in plan, which I doubt, it would be fairly clumsy of them to do it soon after making these changes though.

ED

"Perhaps the 3% rate is only being offered to those who don't currently save with Lloyds Tsb."

Not so here. The 3% Incentive Saver has been offered (+ opened) for a member of my household with several thousand pounds in a Lloyds eSaver from December to date. My eSaver has a higher balance (saving for a home). We both have £7,000 in Vantage. A difference is I alone have several Vantage accounts.

"If those relationships are loss making..." and "If they paid all their savers 3% they'd go bust."

Would they? I believe Sky News and Telegraph newpaper business journalist Jeff Randall mentioned a month ago Lloyds Banking Group pays higher than non-bailed out banks to borrow funds by normal channels due to the HBOS takeover fiasco. Do you have evidence 3% AER would be loss-making? From memory I believe Eric Daniels, then Group Chief Executive, stated it costs more than 4 point something per cent. Anyone here record the interview?

opinions4u

ED wrote: »

"Perhaps the 3% rate is only being offered to those who don't currently save with Lloyds Tsb."

Not so here. The 3% Incentive Saver has been offered (+ opened) for a member of my household with several thousand pounds in a Lloyds eSaver from December to date. My eSaver has a higher balance (saving for a home). We both have £7,000 in Vantage. A difference is I alone have several Vantage accounts.

Fair enough. I was speculating, hence the word "perhaps".

"If those relationships are loss making..." and "If they paid all their savers 3% they'd go bust."

Would they? I believe Sky News and Telegraph newpaper business journalist Jeff Randall mentioned a month ago Lloyds Banking Group pays higher than non-bailed out banks to borrow funds by normal channels due to the HBOS takeover fiasco. Do you have evidence 3% AER would be loss-making? From memory I believe Eric Daniels, then Group Chief Executive, stated it costs more than 4 point something per cent. Anyone here record the interview?

I believe that LBG holds around £240bn in retail deposits. 2010 profits were £2.2bn.

The net retail margin in the 2010 reports and accounts is 2.46%.

Paying all savers with an easy access account a 3% interest rate would involve increasing most customer interest rates by significantly more than 1%. In many cases by 2.9%.

Assuming a mere 1% increase across all balances this would turn them in to a loss making bank again. Continue with that strategy for any extended period of time and the bank would fail.

LBG already attract funds in to accounts that pay 2% or less. Lloyds TSB Easy Saver. Halifax Guaranteed Saver. Cheltenham Gold. All of these fall to 0.5% or less at the end of 12 months and I'd guess most customers forget to do anything about it at this and settle for the lower rates.

Their 2010 accounts show a growth in retail deposits of £11.5bn. Taking a commercial decision to shed part of those that currently pay 4%, and continuing with a strategy that attracts funds for 2% on their main branch based accounts, seems to make absolute commercial sense. As a shareholder, you should be delighted with this initiative.

Personally I'm quite happy playing the rate tart and following the highest non-Santander rate I can find.

Rollinghome

ED wrote: »

Not so here. The 3% Incentive Saver has been offered (+ opened) for a member of my household with several thousand pounds in a Lloyds eSaver from December to date. My eSaver has a higher balance (saving for a home). We both have £7,000 in Vantage. A difference is I alone have several Vantage accounts.

"If those relationships are loss making..." and "If they paid all their savers 3% they'd go bust."

We don't know what proportion of Vantage customers have been excluded from the "exclusive" account but if it wasn't commercially viable to have them all receiving 3% then presumably they could have pitched the rate marginally lower. At around 2.9% it would have been below the rate available elsewhere, including at the group's own Halifax, and so ensured a lower take up, would not have caused offence to either you for being unfair or the other person in your household, and have saved them 0.1%.

If they make similar decisions in future it could mean they'll need to pay above the going rate just to compensate for the ill-will they generate, as does Santander. They may find that none of those daffy cartoon characters in their expensive advertising will ever buy back lost goodwill.

The moral is that headless chickens shouldn't be running banks.

kar999

Maybe there should be a poll to determine the rhyme and reason behind the offers for the Incentive Saver account.. one assumes there must be one but from reading this and the other thread I have yet to establish the correlation. I can only assume there must be a computer running alogorithmic programmes by cartoon accountant/banker characters with big noses somewhere.

Personally I don't really care as the banks, and many organisations like utility and insurance companies run business models that reward loyal customers with derision, penalising the old, longstanding and inncoent with punative rates and/or higher costs/premiums than new customers.

I'm a rate tart and proud of it! I just feel sorry for folks like my less than savvy in-laws in their 80's with their life savings earning 0.1% because the banks that once looked after them all their lives, and they put their trust in, are now milking them dry.

Eco_Miser

anna42hmr wrote: »

i can get people are frustrated but surely people must accept

1. they can change the rates on their current accounts if they wish

Of course they can, has anyone said different?

anna42hmr wrote: »

2. they have no obligation to anyone to offer alternate products to anyone

But if they do offer alternate products, why only to some? And is it good business sense NOT to offer an alternate to to customers who a) have several thousand pounds which won't be earning interest in future if left where it is; and b) have tens of thousands of pounds that will only be earning the same rate (or less) as competitors are offering?

anna42hmr wrote: »

3. if people dont like it then they can vote with their feet

They are, and are posting here telling us they have done so.

anna42hmr wrote: »

4. how many other banks provide the rates they have for how long they have for current accounts!

None, which is why they were so popular. But that was then, nice while it lasted, and now it's time to move on, we don't owe them any loyalty.

anna42hmr wrote: »

5.. The rates were what they have been since 2009 so to be honest i am surprised it did not change earlier

So am I, OTOH rate increases are predicted, so why cut now?

anna42hmr wrote: »

6. At least they gave everyone a couple months notice of the change so people can decide what to do with the excess funds!

I believe that is a regulatory requirement.

anna42hmr wrote: »

Is it just me or what, but i think that we need to get perspective on this, they have not breeched any terms, and we customers etc are not entitled to the rates they held

They have cut their rate, so it's time to find a new home for our money. That's what this thread is about.