Lloyds TSB Offshore Ltd. plans to expand its "borderless banking" strategy by adding offices in the United States and other countries.
"We really want to tap into the rising global community," said Chris Gardiner, the associate director for the Lloyds TSB Group PLC subsidiary in the United States. "Increasingly, customers live in not just multiple homes, but multiple countries with multiple currencies. We want them to be able to take their bank account wherever they go."
Over the past 10 years the London company has established offices in Dubai, South Africa, Shanghai, and Cyprus. In the United States, it opened offices in Miami in January of last year, in Stamford, Conn., in January of this year, and in Los Angeles this past May. The three offices made Lloyds TSB Offshore the first British offshore bank with offices in the United States.
Mr. Gardiner, who is based in Miami, said in an interview last week that he wants to continue to expand.
"There are two jurisdictions internationally that we are looking at, but we really can't disclose what they are," he said. "There are two countries, in addition to what we have now, that we are very interested in. We want to get ourselves established in these markets, but open new offices aggressively from there."
Lloyds TSB Offshore offers international bank accounts, private banking services, personal loans and credit cards, international mortgage services, savings accounts, and investment products to ex-patriates in the United States or U.S. citizens who travel frequently to countries that use the British pound or the euro.
Mr. Gardiner said Lloyds is distinctive because it offers small investors "tri-currency accounts" in which a customer's assets are available in pounds, U.S. dollars, or euros, depending on the country they are in at the time. Analysts said that most banking companies offer multicurrency accounts to wealthy individuals, but a Lloyds offshore account can be opened with a minimum investment of $100.
"We find that our customers want to be able to bank when they get off of the airplane," he said. "They don't want to wait three months to qualify for a bank account in that country. They want to be able to have their money in the right currency, with an ATM card, when they reach a new country."
Analysts said most large U.S. banking companies have set their sights on foreign markets as a way to increase revenue and develop new business, but regulatory hurdles have slowed some foreign companies from expanding into the United States.
Burton Greenwald, an analyst with B.J. Greenwald Associates in Philadelphia, said most foreign banking companies use an acquisition in order to enter the U.S. market, rather than trying to maneuver through the regulatory red tape of building a branch here.
Mr. Gardiner said the United States was the most difficult country for Lloyds to enter, because of the strict regulatory requirements. "We had to make sure that we went through the right regulatory bodies to the right licenses to do all of the things that we wanted to do. And there are still certain areas where we are limited."
For example, Lloyds' private banking capabilities in the United States are much more constricted than they are in other countries, he said. Private bankers here can only refer clients to providers of specific investment products and services, whereas in a place like Dubai, Lloyds can sell and market virtually any offering.
"Under the licenses that we have [in the United States], no monetary transactions can pass through these offices, so we cannot sell investment products," he said. Instead, a Lloyds customer who has more than 350,000 British pounds (the equivalent of about $723,000) to invest is referred to a third-party relationship manager. "We can't advise them; all we can do is facilitate the introduction."
This month Lloyds introduced an international mortgage facility for Americans interested in investing in second homes in the United States, the United Kingdom, Spain, France, Portugal, Dubai, Hong Kong, Singapore, New Zealand, Canada, and Australia. In terms of investment products, Lloyds offers one-year, three-year, and five-year "offshore limited edition deposit products." Mr. Gardiner said these products are similar to certificates of deposit, except they offer the benefits of tracking a stock market.
"Investors can pull their money out at any time, and it tracks the stock market that an investor chooses," he said. "We give a guaranteed return, depending on the terms selected by the customers. For example, the five-year product has a 21% guaranteed return right now."
Over time, as Lloyds develops its U.S. operations, Mr. Gardiner hopes to add more products and services.
"It is always going to boil down to our licenses," he said. "Under these licenses, we'll do what we can do, and if we can't, we'll pass those services along to someone else."
Lloyds will need to add a new currency to the tri-currency account to move into one of the two countries it is eyeing, Mr. Gardiner said.
"Regardless of which countries we are considering, we are always looking strategically at the possibility of adding new currencies," he said. "Strategically, offering multiple currencies in one account with a very low minimum really separates us from other offshore banks."
For now, though, in the United States, Lloyds is still informing customers about more basic matters — such as the fact that it is not affiliated with the renowned insurer Lloyd's of London, Mr. Gardiner said.
"We have to actively and proactively start by educating people about who we aren't, so that we can teach them about who we are," he said. "I mean, it is not the worst thing in the world to be associated with … [Lloyd's of London], but there is a mismatch in what they do and what we do. They are an established insurance provider, and we are an offshore bank."
