Lloyds TSB Foundation talks fail to produce agreement 0

Governance | Gareth Jones | 9 Nov 2009

The Lloyds TSB Foundation has announced that it has failed to come to an agreement with its benefactor the Lloyds Banking Group to ensure its future funding.

Hopes had been raised by news that talks were to resume at a meeting last Friday, but in a statement, the Foundation’s chief executive Mary Craig (pictured) said the Banking Group’s position was “largely unchanged”.

“Regrettably, the Banking Group’s proposal has not changed substantially and remains unacceptable to the Foundation on the basis of legal and financial advice that made it clear the proposal was not in the best interests of the Foundation and, therefore, the charities we support.”

She added: “At today’s meeting the Banking Group did discuss our proposal but was not prepared to accept any part of it as a useful way forward.

“Whilst we understand that they are keen to reach one agreement with all four Foundations, Lloyds TSB Foundation for Scotland is governed by an independent board of trustees, who can only speak for Scottish interests.”

Craig said the trustees would now “consider their overall position”, as they face the prospect of winding up the Foundation after next month’s grant round.

Foundation will still receive more under new deal, says Group

The Lloyds Banking Group wishes to halve the proportion of its profits payable to the Foundation to 0.5 per cent, in return for providing funding until the Group returns to profit.

It also wants a say in where grants are allocated, but denies this amounts to a loss of independence.

A spokesman for the Group said the 1 per cent figure had originally applied to TSB, but now it had merged with Lloyds, the Foundation was entitled to much more, “more than any other financial service provider’s contribution” to a foundation.

He argued that the Foundation would therefore still be receiving more under the proposed deal than it would have done had the merger not taken place.