Where is everyone moving their Lloyds Vantage money to?

skitskut

I haven't got the offer probably as my letter states that 'As you usually keep under £5,000 in your account the changes are good news for you...'
This is strange though as I've had a balance of over £5,000 for longer than I've had one under £5,000! I probably wouldn't have taken the offer anyhow.

opinions4u

A._Badger wrote: »

Lloyds is playing a dangerous game here - and not for the first time, as has been pointed out.

The way I prefer to think of it is not that we are Lloyds customers but that we lend the bank money.

Yes, but lending them the money at 4% means the account is unprofitable. If they believe they can raise the same funds cheaper elsewhere surely that makes commercial sense.

To get those loans (and to get borrowers) Lloyds spends millions on advertising and promotion, yet it casually creates bad will with customers it already has and has spent a lot of money enticing on board.

It's a niche product that they've probably spent very little on advertising.

Still, if we needed evidence of how inept Lloyds' senior management can be we have only to look at the HBOS takeover.

Quite. Although when it boils down to it, when Lloyds senior management were told by the EU that they had to dispose of several hundred branches they were quite keen to keep the Halifax and Bank of Scotland networks as part of LBG and dispose of their own Lloyds TSB Scotland and 25% of their Lloyds TSB England & Wales networks. Alongside their long neglected C&G branches.

While picking up British banking's biggest ever turkey (Bank of Scotland Corporate) they seem to have acquired a HBOS retail network that they value more than the one they had prior to the "merger".

Baldur

theoretica wrote: »

I wonder if there is a correlation between receiving this offer and the privacy/do not send me things settings- I told them not to send me offers by any means and haven't received a mention of this incentive saver.

Unlikely - I always check/uncheck all of the "please send me all of your advertising drivel/offers" on any product for which I apply but still received the offer.

Cook_County

Interesting - I have signature over 3 sets of these accounts (10 Vantage accounts in total I think) and have not received this offer for any of the 3 named account holders. This will doubtless mean several thousand pounds moving away from Lloyds Banking Group.

Andystriker

I received this offer in the letter I got today. I have 3 vantage accounts all with £7000 in, but I also have a Regular Saver Account paying 5% which I took out last year.

Maybe thats why they offered it to me????????????

A._Badger

opinions4u wrote: »

Yes, but lending them the money at 4% means the account is unprofitable. If they believe they can raise the same funds cheaper elsewhere surely that makes commercial sense.

We have no way of knowing what profit Lloyds has been making on these 4 per cent accounts. But let me take a guess - they won't have lost anything at all on them. Just made a slightly reduced profit.

Will they attract the same money at a lower rate? I'd say it is unlikely.

opinions4u wrote: »

It's a niche product that they've probably spent very little on advertising.

That's not really the point I was making. All businesses have to spend considerable sums of money attracting customers. Any competent businessman (ie not someone in 'marketing') knows that it is better to hold onto the customers you have than throw money at trying to attract new ones.

Alienating existing Lloyds customers with this curious marketing ploy means they will have to attract expensive replacements. It's not the money wasted on attracting people to Vantage - it's the money it will cost to replace them when they go.

It's only a personal anecdote but, for example, I've been a Lloyds customer for decades. This is the second time they've applied this Mystic Meg criteria and passed me by on a special offer. I'm sufficiently irritated to consider moving my business elsewhere, which, if I did, would cost Lloyds far more than they would have paid me if they had included me in the offer. I doubt I'm alone.

Woe betide any business that doesn't value the customers it already has.

opinions4u

A._Badger wrote: »

We have no way of knowing what profit Lloyds has been making on these 4 per cent accounts. But let me take a guess - they won't have lost anything at all on them. Just made a slightly reduced profit.

They will be losing money on any easy access account they are paying 4% interest on. Why do you think nobody else is offering a similar rate?

Will they attract the same money at a lower rate? I'd say it is unlikely.

Perhaps they already have.

http://2010.lloydsbankinggroup-annualreport.com/business-review/divisional-results/Retail.aspx

Note the £10bn increase in savings balances. Certainly more than just interest capitalisation and certainly ahead of market growth. I reckon that the Halifax Direct Reward ISA paying 3% will also have done fairly well for them too - better to pay 3% for ISA money that tends to stick rather than 4% for tarts' money in current accounts.

These guys seem to know how to bring in the money in decent quantities and it's not surprising that they should choose to jetison some more expensive deposits.

zzzLazyDaisy

Andystriker wrote: »

I received this offer in the letter I got today. I have 3 vantage accounts all with £7000 in, but I also have a Regular Saver Account paying 5% which I took out last year.

Maybe thats why they offered it to me????????????

Nope, that's not it - I have three vantage accounts all maxed, and a regular saver paying 5%, and a fixed term ISA, but it wasn't offered to me.

I'm not bothered though, I wouldn't have taken up the offer anyway - I've decided to use the funds for a conservatory :-)

savetilibleed

I had the letter yesterday as well - just the 'interest rates are changing' style - to say take a look at llydstsb.com/savings to find out what's available right now. Eerm nuffunk!

I transferred an ISA out from them about a month ago so maybe they took umbridge at and that's why I had no offer. Or maybe not!

Jimmy-p_3

Got my letter in, will be buying Silver coins with my excess money,,,4% a year Vantage,,,sky is the limit PM's