It reads like a John Grisham novel! An internal Lloyds Banking Group report called “ Project Lord Turnbull Report” was published on Tuesday and alleges serious misconduct by the Bank over the handling and disclosure of fraud on an industrial scale at the HBOS Reading Unit. This follows Kevin Hollinrake, Chair of the all-party parliamentary group on fair business banking, who said last week that the group would publish the report unless Lloyds published it first.

Amongst other things, the report claims that if HBOS had properly disclosed the  Reading fraud in its 2007 Annual Report, the £4bn rights issue in 2008 and the the takeover by Lloyds would not have happened.

The report says: “At a basic level, if the Reading incident had been properly disclosed in the 2007 Annual Report and Accounts then it is unlikely that the rights issue would have been capable of proceeding and irrespective of whether the Government stepped in or not at that time to prevent the collapse of HBoS, it is unlikely that a solvent acquisition by Lloyds TSB would have occurred”.

The Reading scandal is important because it involved people in senior management positions and we want to ensure that their actions are looked at properly and not swept under the carpet. The Union is involved in almost daily cases where the Bank is quite willing to throw the book at junior members of staff for minor mistakes of no financial consequence, and we want to ensure that senior members of staff, who all too often in these types of cases walk away scot free, are held to the same exacting standards. We are also interested to know the truth about what happened at Reading and what the HBoS Board knew about it at the time. Mr. Harry Baines, General Counsel of HBoS and a member of the Executive Board, was appointed to the Chairmanship of the Lloyds Banking Group Trustee Board, a position that is highly remunerated, a number of years ago. In a letter to Mr Andrew Bailey on 18th April 2017 we said:

“If there is evidence that the Executive Committee of HBoS were aware of the issues in Reading and agreed not to disclose those to the FCA and shareholders, we would expect sanctions to be brought against all those involved. If there is any evidence that Mr Baines was involved in a cover up, and that can only be determined by the FCA, then we would expect him to be removed from the Chairmanship of the Lloyds Banking Group Trustee Board without delay”.

The Union is reviewing the Turnbull Report and we will cover it again in a further Newsletter. We are also awaiting publication of the Dame Linda Dobbs Report; the former judge was appointed by the Bank last year to review claims of a “cover-up” in Reading.

What’s Going On With Mortgages?

MAPAs are concerned that the new ‘Local Customer Mortgage Plans’, which will be launched on 1st July, will be used as a forcing tool to get them to see more customers and produce more business. Robin Bulloch, MD of Lloyds and Bank of Scotland Community Banks, said: “We know that having a clear plan and regularly visiting and refreshing that plan improves the way we perform…”. It seems that in anticipation of the launch, Line Managers are contacting MAPAs asking them to justify the hours they spend not seeing customers. In one case, the hours when the MAPA was not being productive, which means not seeing customers, included the 5 hours when she was supposed to be on her lunch break. The fact that the member of staff found it almost impossible to take her lunch breaks anyway, was conveniently ignored by her Line Manager.

Some MAPAs have reported to the Union they are being told to deter existing customers from coming into the branch to discuss rate renewals because the Bank will be launching P4L shortly for those type of customers and that’s a more profitable product.  

One member of staff said:

“We are to deter at every opportunity an existing customer coming in to see us when they want to do a rate renewal.  BUT guess what P4L is coming for those types of customers in the near future.  The bank is such a hypocrite, because once we can sell that to the customer we will be allowing them to come in to discuss the product transfer.  We don’t want them now, so please explain letting “customers be seen when wanted and where wanted”, This is not on the bank’s agenda at this point in time, as that type of customer isn’t making the bank some new money, until of course they can be sold P4L!!”

We would like to hear from MAPAs who have been given similar ‘instructions’ or ‘suggestions’ so that we can determine how widespread this is across the Lloyds and Bank of Scotland Community Banks.

Gaming the system, which simply means using the rules and procedures to manipulate the system for a desired outcome, is still alive and kicking in LBG. We had hoped that this type of behaviour had been stopped along time ago. In one Region, MAPAs have been told:

“…..that every customer that we quote for Life cover must go to a full application, as it doesn’t reflect in our figures that we are quoting enough customers.  Yet our recordings evidence our conversations on protection, but this isn’t actually good enough.  So regardless of whether the customer wants to or not, they will be going through full underwriting, as this is what XXXXX the Regional Mortgage Manager has dictated that we do.  If the customer doesn’t actually want it, then tough, (as this no longer affects our risk scores) the application can sit in the system till it drops off.  Is this treating customers fairly?”.

We understand that the mortgage business has got to deliver £89 million of income growth by 2020, with cost savings of £27 million but going back to the old ways is not the way forward. We will be monitoring the use of Local Customer Mortgage Plans and if we see any evidence of those being used to push sales improperly we will raise our concerns with the FCA directly. Meanwhile, in respect of rate renewals and life cover quotes we would like to hear from MAPAs about their own experiences. Members can email us at or they can contact us on 01234 716029. (Choose Option 1)


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