Lloyds’ big push targets affluent: Leaked memo reveals major strategy to drum up sales from middle class
Lloyds Banking Group has hatched a secret plan to turbocharge sales of its services to well-heeled, middle-class customers, The Mail on Sunday can reveal.
New boss Charlie Nunn has devised a growth strategy putting what the bank has described as its ‘mass affluent’ customers – typically people earning more than £75,000 – at the centre of its business.
According to an internal memo, the FTSE100 lender will merge its private banking division, which caters for wealthier individuals, with its more broadly focused consumer relationships arm.
Growth strategy: Lloyds will merge its private banking division, which caters for wealthier individuals, with its more broadly focused consumer relationships arm
It means the two divisions will co-ordinate their efforts to sell investment products alongside insurance and other services.
The memo, sent by senior Lloyds banker Antonio Lorenzo, said the merger will take place in July and that work ‘has already started to define the vision’. It added: ‘A key part of this will be connecting banking, insurance, lending, payments and investments into a single integrated proposition. This provides a terrific opportunity for our private banking team, led by Debbie Burton, to become part of the new Consumer Relationships business.’
The latest move is part of a strategy to boost Lloyds’ growth in areas outside of traditional high street banking, where it already has the lion’s share of the market in current accounts and mortgages.
In his first annual results in February, Nunn outlined a blueprint to rake in an extra £1.5billion in annual revenue by 2026, split equally between lending income and fees from products such as insurance.
The bank, which has 26million customers, has calculated the ‘mass affluent’ market could expand at 10 per cent a year. Lloyds plans to invest £300million on developing services for the affluent middle class. It hopes that will boost the total balances of the accounts held by customers by as much as £15billion by 2026.
Gary Greenwood, an analyst at Shore Capital, said: ‘They’re looking to get more bang for their buck from mass affluent customers.
‘There’s a difference between forcing products down people’s throats that they don’t actually need – like the sales practices of the past that led to mis-selling – and getting customers to buy products that they actually want. The bigger risk is that they over-charge on one product to sell others more cheaply.’
Last week, the bank announced changes to its management team. Lloyds’ commercial banking boss David Oldfield will leave next year and retail banking head Vim Maru will also exit the bank.