Making use of resources that its smaller rivals can only envy, the Geneva-based arm of Lloyds Banking Group has commissioned numerous YouGov surveys over the last few years into the attitudes of wealthy Brits still living in the UK, as well as those abroad, in an effort to understand their thinking.
A central finding of all this research suggests that the current strategy of Lloyds TSB International, to expand its range of products and services targeted at Brits abroad, is practically a no-brainer.
According to Lloyds TSB International’s most recent study of wealthy Brits still resident in the UK, published in January, 17% of those with at least £250,000 worth of savings and investments excluding property, report they are considering leaving the UK to live abroad, either temporarily or permanently, in the next two years, an increase of 3 percentage points from the last time the survey was conducted. Already an estimated 5.5 million Britons live abroad, or about one in 10 of the population.
“Around half [of the more than 1,000 wealthy Britons surveyed] think that the UK has a worse quality of life (47%), lower levels of happiness (50%) and higher stress levels (55%) than other developed countries,” the study’s authors noted in their executive summary.
Statistical interest
Not surprisingly, such statistics are viewed with interest by companies that cater for wealthy British expats. And one such company is Lloyds TSB International itself, according to Nicholas Boys Smith, who heads up its so-called International Affluent arm, and who, unusually for someone in the offshore financial services sector, also happens to be a former parliamentary candidate who has served as a front bench adviser in Government and in Opposition.
That is not to say that Lloyds TSB International is “about to open up branches in every town in China”, nor is it a simple matter of “Britain isn’t growing, therefore let’s do stuff abroad”, says Boys Smith, who has been with the company since 2007 and who has a total of 11 years of experience in the wealth management and financial services sector. (Prior to joining Lloyds TSB International, he helped to build a wealth management business in China and ran part of a private bank in Geneva.)
Almost infinite
But it is hardly a secret that the economy in the UK, where the major share of Lloyds Group’s current business is, is not growing as fast as some other parts of the world, or that its banking market is mature and competitive. Meantime, Boys Smith notes, the opportunity internationally is “almost infinite”.
So it makes sense, he says, to make a greater effort than previously to reach, internationally, more of the “many thousands of people leaving the UK each year, permanently or for long periods of time, with whom we have a UK relationship at the moment of their departure”.
“Certainly the recent experience we’ve had in the part of the business that I run has shown that it doesn’t take a huge amount to dramatically up our success rate.”
Measures Boys Smith says Lloyds TSB International has taken to boost its visibility and presence among expatriate Britons include an effort to form more relationships with the multi-national companies that employ British expatriates around the globe, and the introduction of new investment products and services, such as the Lloyds TSB International Lifestyle discretionary portfolio, launched in 2010.
“The minimum investment for that is £100,000, but we have a similar, unitised product, the Multi-Strategy Fund, which has a minimum of just £10,000. It’s not yet available in all geographies, but it will be shortly,” Boys Smith says.
Beyond this, Lloyds TSB International seeks simply to make more expats and soon-to-be-expatriate Brits aware of such Lloyds TSB International staples as its international mortgages; its wealth structuring solutions team (normally for “high net worth” clients with £2m or more in investible assets); and its core product, the Premier International Account, an online current account which comes with certain expat-friendly extras such as multi-currency capabilities and worldwide travel insurance.
Not an Expatland newbie
Although the Lloyds TSB International name may still be unfamiliar to many, the entity itself is far from new to the international scene. If you travel back through the family trees of the banks that combined over the years to form the business that Lloyds TSB International is today, you discover that its international presence dates back to 1862, when it had offices in Argentina and Brazil. (South America remains one of its most important international regions.)
In 1919, again through one of its component entities, it became the first foreign bank to open a branch in Switzerland, and in 1962, it was the first merchant bank to open in the Channel Islands, an area where, through its Islands Personal Banking operation, it remains a key local player, as it also is in the Isle of Man.
Lloyds TSB International claims to have been offering mortgages to clients interested in buying property internationally for longer than any other major UK bank (more than 30 years), and its multi-currency mortgages remain among its best-known products.
Point of contact
It has offices in “nearly all major expat cities” in 10 countries, which provide a point of contact to intermediaries as well as to such “business introducers” as corporations, whose employees are offered Lloyds TSB International products and services; its undisclosed number of clients may, it says, be found in more than 100 countries across Europe, the Americas, Asia and Africa.
While the obvious strategy for a UK-based bank to tailor its services to expatriate Brits might seem to be one that is based on geography, Boys Smith says Lloyds TSB International “customer segments rather than physical location” actually works far better.
Thus it is that whether they’re living in Zurich or South Africa – or haven’t even left the UK yet, but are in the process of planning their move – Lloyds TSB International clients come in three sizes: mass affluent, affluent and high-net-worth.
For obvious reasons clients are not told of these distinctions, but they do enable Lloyds TSB International’s relationship managers to accommodate the needs of those with, say, £100,000 to £250,000 in investible assets; those with £1m to £2m; and those with more than £2m.
Hong Kong closure
A business the size of Lloyds TSB International rarely develops without the occasional setbacks, particularly since the global downturn that began in 2008, which saw its parent, the Lloyds Group, becoming part (40%) nationalised.
Most recently, Lloyds TSB International revealed in February that it had closed a representative office in Hong Kong as part of a strategy to “focus on geographies where it can invest and build scale from its existing position”, and that existing clients there would continue to be looked after by the Lloyds TSB International Offshore Centre in the Isle of Man” and by its online “24/7 banking” service.
The Hong Kong branch of Lloyds TSB remains open for business as usual, and the International Mortgage Service business there also remains unaffected, the company said.
Despite such setbacks, Boys Smith notes that corporately, the international operation is viewed with increasing interest by the parent banking group. And given that profit in his particular area rose, he says, by “just under 45% last year”, this is possibly not surprising.
“More and more Britons are leaving the UK, so we’re in a market that the bank is interested in,” he says.
“We are now one of the areas where there is a recognised clear potential at the most senior level for top-line growth.
“Although we are in a constrained and difficult environment for expenditure and investment, we [Lloyds TSB International] are getting good investment and good support, in order to be hiring the right people, developing new products and improving our services.”
