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(Corrects name of Shawbrook CEO to Ian Henderson from IanRichardson)
* Lloyds to rebrand 631 branches ahead of planned IPO in2014
* Lloyds was ordered to sell branches by EU regulator
* Move part of measures to stimulate competition
* New switching rules to be introduced from Sept 16
By Matt Scuffham
LONDON, Sept 6 (Reuters) - Britain's 200-year-old TSB bankreturns to the high street on Monday after an 18-year absence,the result of action by regulators and the government tointroduce greater competition for the country's banks followingseveral consumer scandals.
TSB, set up in the 19th century as the Trustee Savings Bankgroup for those with modest means, is currently owned by LloydsBanking Group, Britain's biggest retail bank, which hasbeen ordered to run it as a standalone brand and plans tooffload it entirely via a stock market flotation in 2014.
Britain's banking industry has been dominated for decades bya handful of names: Lloyds, RBS, Barclays, HSBC, and Santander UK control 83 percent of retailaccounts. But public anger and mistrust has been stoked recentlyby scandals where it emerged that banks had misled clients intobuying loan insurance they did not need, and separatelycollaborated to fix benchmark interest rates.
An influential cross-party committee of lawmakers set up toreview standards within the industry said in June that a lack ofcompetition in UK retail banking was an important reason whypoor standards of conduct persisted in the industry.
The commission also backed moves to relax capitalrequirements for new entrants and the introduction of rulesrequiring banks to ensure customers can switch accounts within aweek which come into effect on Sept. 16.
TSB will benefit from having an established branch networkand infrastructure. It will have 631 branches and 4.5 millioncustomers and its relaunch will also be backed by a 30 millionpounds marketing push from Lloyds.
Lloyds, Britain's biggest retail bank, was ordered to sellthe TSB branches by the European Commission as a condition of a20.5 billion pounds ($32 billion) government bailout.
"(TSB) will have from day one one of the things which thechallenger banks have tended not to have which is scale. Thebusiness, in a hundred yard dash, would be starting at the 90yard line rather than the 110 yard line," said Ian Henderson,chief executive of Shawbrook, a much smaller bank which was setup in 2011 and lends mainly to small businesses.
Henderson said TSB can differentiate itself through itsproducts, strategy, marketing and brand.
"If that stacks up and people buy into it, then that oughtto further enhance competition," he said.
Other industry experts were sceptical. Shore Capital'sbanking analyst Gary Greenwood said he didn't expect a dramaticchange in the competitive landscape in the next five years.
"TSB will be painted as a new challenger brand on the highstreet but I doubt that its pricing is going to be verydifferentiated to competitors. Current accounts tend to be verysticky and customers only tend to move if they have a really,really bad experience," he said.
Mark Garnier, a Conservative member of the cross-partyparliamentary committee on banks, said fresh blood was needed.
"TSB is certainly not the answer. We want entrepreneurs tocome into the marketplace and start opening banks," he said.
The TSB's trustee savings banks were amalgamated in the1970s and 80s into the TSB Group, which subsequently floated onthe London Stock Exchange in 1986, before being acquired byLloyds Bank in 1995. Lloyds re-branded the branches and the TSBname disappeared from the high street.
Lloyds had planned to sell the business to the Co-operativeBank but that deal collapsed in April amid concernsover the Co-op's capital strength. It must now ask Europeanregulators to extend a November 2013 deadline for the sale.
($1 = 0.6399 British pounds) (Editing by Sophie Walker)
