View more on these topics

Lloyds to be sued by own charity, say reports

The charitable arm of Lloyds Banking Group of Scotland has launched legal action against the bank in a bid to reclaim a sum of £3.5m that it says should have passed on to good causes.

According to reports, Lloyds TSB Foundation for Scotland has served a summons to the bank, which was bailed-out by the taxpayer in 2008, after claiming the firm has breached a historic agreement between the two organisations, which sees millions donated to charities across Scotland.

The firm is understood to have received £38,920 from Lloyds Banking Group this year, despite the foundation’s chief executive Mary Craig claiming the number should be closer to £3.5m under the terms of the covenant.

The covenant, which is sealed by an act of parliament, has ensured the foundation – and sister organisations in England, Wales, Northern Ireland and the Channel Islands – receive 1 per cent of the banks pre-tax profits. This is based on the average pre-tax profits for the past three years.

The foundation argues it should have been in line to receive 19.46 per cent of the original 1 per cent. Craig says the bank has made its calculations based on losses last year of £6.2bn rather than pre-tax profits.

She says: “We cannot afford to allow the discussion about our funding to drag on any longer, as there are also implications for our future monies if the group continues to misinterpret the covenant calculation. Court action is the only way to resolve this situation once and for all.



“In previous years, the amounts reached using the formula in the covenant have been agreed between us with little difficulty.

A spokesman for Lloyds Banking Group says: “We disagree with the foundation’s interpretation. However, it would be inappropriate to comment further on the litigation.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. That Charity doesn’t sound very charitable!

    I bet that ‘charitable’ contribution from Lloyds barely covered Mary Craig’s salary let alone her final salary pension scheme!!

  2. In passing:

    “Lloyds TSB Foundation for Scotland owes it existence to The Rev’d Henry Duncan, who founded the Trustee Savings Bank in Ruthwell, Dumfriesshire in 1810. He started the Bank so that everyone, regardless of wealth or position, could benefit from a savings bank.

    In 1985, the Trustee Savings Bank Group chose to set up four independent charitable trusts (Scotland, England & Wales, Northern Ireland, Channel Islands) to distribute 1% of pre-tax profits according to the spirit and principles of Henry Duncan. The Foundation for Scotland receives almost 20% of this amount.”

    More here (with a background to the dispute):

    http://www.ltsbfoundationforscotland.org.uk/index.asp?cat=about%20us

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com