Profitable Lloyds pledges to keep free banking

LLOYDS Bank promised yesterday not to impose charges on current accounts in credit, defying other big banks such as Barclays and NatWest which desperately want to make the move to restore profits, writes Peter Rodgers.

Announcing a 28 per cent rise in profits before tax to pounds 801m, Brian Pitman, Lloyds chief executive, said that if another bank imposed charges, Lloyds would be happy to take away its customers. 'We would be able to hold off doing the same because we are more profitable. We don't have to jack up charges.'

Other high street banks are poised to charge for current accounts in credit. They say high charges to customers in the red are subsidising the free service for those in credit. No bank has dared to make the first move because of the likely hostile reaction from account holders.

Lloyds plans eventually to introduce a new type of account for more prosperous customers, perhaps with telephone banking. It may include some charges for those in credit. But Mr Pitman said this would not affect existing accounts.