LLOYDS Banking Group has claimed its new TSB brand is picking up customers in its Scottish heartland after the launch of new account-switching rules.
The part-nationalised lender, said it would reveal in February the outcome of talks with regulators over restarting dividend payments, signalling it could yet make a pay-out for 2013.
This comes after Lloyds, which also owns Bank of Scotland and Scottish Widows, posted an 83% rise in underlying profit to £1.5 billion for its third quarter to the end of September.
But this was wiped out by another £750 million provision for payment protection insurance mis-selling and losses on business sales that sent it to a £440m statutory loss.
Lloyds chief executive Antonio Horta-Osorio said it was "highly likely" that the Government would sell a second tranche of the bank's shares in 2014 to reduce its stake further from the current 33% mark.
Mr Horta-Osorio said that, after the introduction of new account-switching rules last month, its leading Lloyds and Bank of Scotland brands were "broadly neutral" in terms of defections.
Its challenger Halifax brand, which will return to the Scottish high street with a branch in Aberdeen in December, however, was gaining market share against the established names, he said.
Despite 4.6 million customers being transferred from Lloyds to the newly launched TSB last month, Mr Horta-Osorio said switching between the two brands was "not very significant".
In Scotland, where TSB inherited 189 branches thanks to the inclusion of the Lloyds TSB Scotland network, it is picking up customers.
"In the north of England and Scotland it (TSB) is a net switcher positive," he said.
Lloyds plans to float TSB on the stock market next year as part of a deal struck with European competition officials when they approved its 2008 taxpayer bail-out.
Mr Horta-Osorio dismissed demands made by the likes of Virgin Money that account switching be made even easier.
He said the new system was "a major milestone".
"If it doesn't perform properly other solutions could be considered," he said.
Lloyds revealed that it had spent another £586m on developing the Verde portfolio into TSB. In all, it has spent £1.4bn, having previously signalled it would cost it £1.6bn to separate out the business.
Lloyds surprised the City by taking another £750m charge to cover PPI mis-selling compensation and has now set aside more than £8bn, double its original expectation. The bank said that complaint numbers had not fallen as quickly as anticipated.
Mr Horta-Osorio said: "Product legacy issues remain but we are committed to dealing with these and ensuring customers receive fair outcomes."
Having sold a number of businesses, including its Australian operation, the Portuguese banker said Lloyds is ahead of schedule in running down its non-core business.
"The hard work of the last few years is starting to come to fruit," he added.
UK banks have set aside more than £17bn to compensate borrowers mis-sold PPI policies, meant to pay out in the event of sickness or unemployment but often sold to those who were ineligible to claim.
Lloyds will provide details on dividend pay-outs when it announces year-end results in February.
Mr Horta-Osorio said: "We are going to be a high dividend paying stock in the future."
He said Lloyds's management team was proud of the first Government share sale in September.
"It is quite likely there will be significant other tranches in 2014," he said.
Finance director George Culmer said that other banks currently paying dividends had smaller capital cushions than Lloyds.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers said: "In making this progress Lloyds has thrown the ball back into the court of the Government to ponder whether the time has come to dispose of its remaining stake and leave the company to its own devices."
Lloyds's shares closed down 1.61p or 2% at 78.01p.
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