The bank revealed both Intelligent Finance and Bank of Scotland will cease new lending through intermediaries but it will retain BM Solutions, Halifax Intermediaries, Cheltenham & Gloucester for Intermediaries and Scottish Widows.
National account teams of the separate brands will be consolidated under the Lloyds umbrella. The bank will also keep its mortgage centres in the West Midlands, Halifax and Scotland.
Lloyds Banking Group sales director Nigel Stockton says: “These are tough changes but focusing our attention on these key intermediary brands will help us deliver a better quality of service and range of products to our intermediary partners.”
Although Lloyds will be shutting down the 164 Cheltenham & Gloucester high-street branches and slashing 1,660 jobs, intermediaries are pleased that a multi-brand adviser strategy will be retained within the bank.
Mortgageforce managing director Kevin Duffy says: “There were no surprises for advisers when they learned of the restructure. The good news is intermediaries came out better than the direct channels. Brokers wanted BM, Halifax and C&G to stay, so they will be happy.”
Mortgage Intelligence managing director Sally Laker agrees, saying the restructure could have been a lot worse for IFAs.
She says: “Lloyds will still deliver choice to the broker, which is ultimately good for the borrower. Nigel Stockton understands retail and intermediary sales and I hope Lloyds can make them work together.”
Quantum Mortgages director Fahim Antoniades says Lloyds will be able to compete with its peers through C&G for business. He says: “Traditionally, advisers saw C&G as a top-five prime lender with a niche for competitive rates, so it is good that it is remaining.”
He also thinks it was a good decision to keep BM.
“Lloyds will have looked at where brands crossed over but BM has no cross-over. Admittedly, being a specialist provider means it is not the flavour of the year but Lloyds will keep it bubbling over ready for when things pick up again. It is a very strong intermediary brand,” he says.
London & Country mortgage adviser David Hollingworth says the decision to scrap BOS and IF for intermediaries is not much of a surprise.
He says: “BOS’s offering always had tensions with BM’s proposition, as they both offered similar buy-to-let and self-cert deals. BOS was also competing with Halifax on mainstream products, so brokers will not miss it particularly.
“IF is an interesting one as it seemed to rise from nothing, exploded on to the market and then fell back into the shadows But, with Scottish Widows offering offset, brokers will be happy as they will still be able to access all the types of products they could before.”
John Charcol senior technical manager Ray Boulger believes advisers will be content but that the threat of dual-pricing still hangs over the sector.
He says: “The bank still has Halifax for both channels, so still has the potential to dual-price.
“It will be interesting to see whether C&G offers a similar range to Lloyds TSB. This restructure may give Lloyds the scope to dual- price even more or it may mean advisers will be offered completely different loans.
“There is no reason to think this restructure will mean things get worse for advisers. But right now, it is the lenders who are in the driving seat, so we just do not know yet.”
Where does the group go from here? This “brand mapping” was long expected in the intermediary industry, and some feel the process was an excuse for Lloyds to take the focus off spending Government money on mortgages for those who need it most.
Duffy says: “It is time for Lloyds to get on and push some of that Government money into the intermediary channels. When will we see some higher- LTV loans return and which brand is going to offer them?”
Personal Touch Financial Services sales director Dev Malle says: “The next phase will be interesting as advisers and distributors will be looking at which systems the group adopts. From an intermediary perspective, the BM and Halifax systems are superior.”
Laker says: “We might see banks’ intermediary and direct channels work together better but we might also see the opposite.”