Lloyds TSB to launch European Internet bank

Will compete with Egg, Smile other standalone online banks

Lloyds TSB has confirmed rumours that it is to launch an Internet banking operation.

The bank already operates an online PC banking service for personal and business customers. The new pan-European operation will compete with Internet-only banking services such as Prudential's Egg and Halifax's upcoming Greenfield. Online banks are able to pose a significant challenge to brick and mortar institutions. Dramatically reduced overheads from the lack of any physical infrastructure means that they are able to offer cheaper services.

The company said that it was unable to go into details of the service, such as timing, as it was still in early planning stages. "All we are able to say is that we do have plans to launch a European Internet bank," said a spokeswoman.

Lloyds TSB said that it was even unsure at this stage whether the new operation would be in the form of a standalone operation in the style of Egg. "We haven't decided that yet," said the spokeswoman.

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