Memo reveals Lloyds strategy to boost middle class sales
Lloyds’ big push targets the wealthy: Leaked memo reveals major strategy to boost middle class sales
Lloyds Banking Group has hatched a secret plan to boost sales of its services to affluent, middle-class customers, The Mail on Sunday can reveal.
New boss Charlie Nunn has devised a growth strategy that puts what the bank has described as its “mass affluent” customers – typically people earning over £75,000 – at the center of its business.
According to an internal memo, the FTSE100 lender will merge its private banking division, which caters to the wealthiest people, with its more broadly focused consumer relations arm.
Growth strategy: Lloyds will merge its wealthier private banking division with its more broadly focused consumer relations arm
This means that the two divisions will coordinate their efforts to sell investment products alongside insurance and other services.
The memo, sent by Lloyds senior banker Antonio Lorenzo, says the merger will take place in July and work “has already begun to define the vision”. He added: “A key part of this will be connecting banking, insurance, lending, payments and investments into one integrated proposition. This provides a tremendous opportunity for our Private Banking team, led by Debbie Burton, to be part of the new Consumer Relationships business.
The latest move is part of a strategy to spur Lloyds’ growth in areas other than traditional banking, where it already has the lion’s share of the current account and mortgage market.
In its first annual results in February, Nunn outlined a plan to raise an additional £1.5billion in annual revenue by 2026, split evenly between loan income and fees from products such as insurance .
The bank, which has 26 million customers, has calculated that the “mass affluent” market could grow by 10% per year. Lloyds plans to invest £300m in developing services for the affluent middle class. It hopes this will increase total account balances held by customers to up to £15 billion by 2026.
Gary Greenwood, an analyst at Shore Capital, said: “They’re looking to get more bang for their buck from affluent clients.
“There’s a difference between forcing people into products they don’t actually need — like past sales practices that led to overselling — and getting customers to buy the products they actually want.” The biggest risk is that they overcharge on one product to sell others cheaper.
Last week, the bank announced changes to its management team. Lloyds commercial banking boss David Oldfield will leave next year and retail banking chief Vim Maru will also leave the bank.