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Wednesday, 13 December, 2000, 12:59 GMT
Goldfish takes plunge into banking logo providing the infrastructure for Goldfish bank
British Gas owner Centrica and High Street bank Lloyds TSB are joining forces to launch a telephone and internet bank under the Goldfish brand.

"There have been limitations to internet banking... We believe a more integrated approach is the way forward

Centrica spokeswoman

Centrica, which owns the Goldfish credit card, says the bank will offer financial services over the phone and internet to a projected two million customers by 2005.

The operation will be developed around the infrastructure set up for the pan-European internet bank, which High Street giant Lloyds TSB is in the process of launching.

Centrica said that a decision to ensure customers could access Goldfish bank by telephone reflected concerns over the spread of internet banking.

Internet 'not the only answer'

"There have been limitations to internet banking," a Centrica spokeswoman told BBC News Online.

"We believe a more integrated approach is the way forward, after studying the findings of market research."

Egg, one of the leading internet-only banks, has recently stopped charging customers who deal with it over the phone, as it seeks to appeal to a wider base than purely online customers.

Prudential-owned Egg lost 115m in the first nine months of the year, but boasts 1.2 million customers.

Lloyds TSB, which will have a 30% stake in the Goldfish bank, said it was keen to explore all options when developing new operations.

"We are looking at all sorts of different ways of developing internet banking in the UK. We look at different markets, and decide which strategy will be most appropriate."

Volatile sector

The launch, expected early next year, will bring a further name to the UK's volatile and increasingly competitive banking sector.

Peter Ellwood, chief executive, Lloyds TSB
Peter Ellwood: "Well placed to exploit opportunities"

A recent attempt by Lloyds TSB to take over the Abbey National followed a series of mergers among bricks-and-mortar banks.

But Centrica said Goldfish bank will be supported by an "innovative loyalty scheme", thought to include offering cash handouts to clients opening accounts.

The two million customers Goldfish hopes to attract by 2005 include one million set to transfer from the credit card operations.

The customer target is backed by a mailing list of nine million customers of Centrica's other operations, including the AA and British Gas, who have expressed interest in other services.

Peter Ellwood, Lloyds TSB's chief executive, said: "The joint venture gives us access to Centrica's extensive customer franchise, and combines's technology with the power of the Goldfish brand.

"Together, we will be well placed to target the UK market and maximise the value-creating opportunities that lie ahead."

Shares in Lloyds TSB stood 11p lower at 677p in early afternoon trading in London.

Shares in Centrica, which is to brief City analysts on its future strategy later on Wednesday, stood 1.5p higher at 248.5p.

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See also:

12 Dec 00 | Business
Abbey rebuffs new Lloyds TSB bid
03 Nov 00 | Business
Bank merger wave
16 Oct 00 | Business
Egg adds customers and losses
02 Oct 00 | Business
Consumers shy away from e-banking
26 May 00 | Business
Online banks scramble for customers
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