Is Lloyds Bank Safe?

Company size:

Lloyds is known as one of the largest retail and commercial banks in the United Kingdom – deemed one of the big four (alongside Barclays, HSBC and Natwest). Of the big four banks it was also the first to be founded – way back in 1765 and exactly 100 years earlier than the next of the big four banks to launch – HSBC in 1865.

Being a bank, it is much heavier regulated than commercial FX companies. It also gets significant media coverage, with its symbolic black horse symbol in place for hundreds of years.. Even companies such as Transferwise, who are constantly getting media coverage, struggle to get close to the level received by the incumbent big four banks in the UK market.

Lloyds slogan “By your side” has become synonymous with its famous black horse adverts, and vouches to the fact Lloyds offers a wide variety of financial services for students, adults, small businesses and corporates. However, like most major corporations in the limelight it has received a fair share of bad press too. Like other major banks it was fined for its role in mis selling PPI, whilst it was also fined for fraud failings in a scandal that impacted a number of its customers. Whilst it was a little time ago now Lloyds Bank were also fined the largest for its time for failing to control their sales team, on the back of a number complaints to the financial ombudsman service.

Regulated By:

Prudential Regulation Authority (UK), FCA (UK), Financial Services Compensation Scheme(UK), Financial Services Compensation Scheme (UK), British Bankers’ Association (UK)

Awards:

None.

Conclusion:

Lloyds bank is definitely “safe” in the old-fashioned sense of the word – in fact it’s the oldest of all the biggest major banks in the UK. There are more regulatory bodies supervising its activities than any other commercial financial service provider. Arguably it is even ‘too big to fail’ for the UK government to allow it if there were to be another downturn. 

On the other hand, it’s not all positive for Lloyds Bank. There is a significant amount of negative reviews to be found online and the FCA has fined Lloyds Bank for its shortcomings in fraud detection.

Lloyds Bank Customer Reviews

Research:

3,047 reviews on TrustPilot, and 988 reviews on reviews.io [As of Oct 2022].

Please note, the Lloyds Bank client reviews that were collated in this section do not necessarily relate specifically to international payments.

Conclusion:

Looking at the reviews found on both TrustPilot and reviews.io there are considerably more negative reviews than there are positive. It’s important to point out Lloyds Bank does not actively manage reviews on either site and does not encourage their clients to leave online reviews. So if we consider there are no prompts for customers to leave a review it means customers who have a poor experience will be a lot more likely to proactively leave a review than those that have had a positive experience. That being said though it’s difficult to ignore the fact that there are a number of discontent Lloyds Bank customers.

Lloyds Bank Exchange Rate & Fees

Fees: The fees detailed on Lloyds’s website for a Lloyds transfer abroad are £9.50 for all non-Euro transfers. £12 correspondent bank fee for transfers to Europe, US and Canada. £20 correspondent bank fee for transfers to the rest of world. Euro transfers to EEA countries are free.

To make a brief comparison, commercial FX companies such as Tor FX and Currencies Direct charge £0 per transfer for private clients from the UK on any amount, and most destinations will receive payments within 1-2 days.

Exchange Rates: Unlike some banks you are able to find an indication of the Lloyds Bank exchange rate for Lloyds international payments. The transparency is certainly welcome but for reference we have compared the exchange rate to that of Wise and they are definitely more expensive with their standard pricing. Note it may be possible to negotiate a better rate over the phone.

Not only was Lloyds more expensive than any non-bank alternative, our analysis on international money transfer fees found they were even more expensive than other UK banks. A sample of the data is below:

In fairness, Lloyds is the only UK bank to directly advertise the FX markup it applies when converting one currency to another. Their fee information document indicates that spreads tighten as the transfer gets bigger. The rates calculated through other banks are generic and they do not relate to a specified transfer amount. It’s possible that these banks average out their spread before they provide indicative exchange rates to customers, i.e. showing a rate which could be for a higher transfer amount vs Lloyds which clearly states their worse rate on smaller transfers.

Limits: Online: Send up to £100,000 per day through Internet Banking.

In branch: There is no maximum limit. If sending over £100,000, the branch will call directly to the Lloyds dedicated currency trading team and help to get an exchange rate the client is happy with.

Telephone Banking: Up to £5,000 through Telephone Banking.

The minimum payment amount is £1.01, whether made online, in branch or through Telephone Banking

Conclusion:

Lloyds Bank fees and exchange rates are much higher than any commercial fx provider.

Lloyds Bank Global Reach & Service

Research:

• Dedicated Dealer: Private clients do not receive a dedicated FX dealer.
• Offices: Thousands of branches in the UK.
• Ways to approach: Telephone, Branch or Online.
• Translations: UK centric so just English.
• Accepts clients: UK citizens.
• Currencies Handled: We believe Lloyds will handle every currency in existence.
• Client reviews: Majority of online reviews are very negative.

Conclusion:

Lloyds Bank is a UK only offering. Most of the highest regarded dedicated FX companies offer their services throughout at least Europe and often into other territories. Some companies focus on the US and Canada whilst others focus on Hong Kong, Singapore, Australia and New Zealand. And some focus on the UAE. Just about all territories are covered by at least one provider. Check the top rated international money transfer companies to learn more.

Being a bank Lloyds would have access to an impressive number of currencies but the exchange rates and fees involved can prove these to be very costly. Even if you are looking to trade in a very exotic currency it would be worth investigating if this can be done with a specialised FX company that will often offer 100+ currencies in their own right.

Additional Functionalities

Outside of Lloyds international money transfers Lloyds Bank has a wide array of financial services available to its clients – private loans, mortgages, credit cards, current accounts, saving accounts. It has a full suite. 

Within FX though the options are much more limited for private clients. We can’t see anywhere that private clients can utilise forward contracts, regular automated payments or limit orders. These are most likely possible for Lloyds Bank corporate customers. For private clients looking for hedging solutions they should again consider a dedicated FX company.

App:

Lloyds bank has, as expected, both an iPhone and Android app. These apps enable clients to send international payments from their mobile devices effortlessly.

The Lloyds banking app has excellent reviews on both app store and google play. In fact they’re up there with the best rated apps by international money transfer companies. 

• Rated 4.8 /5 on the App store, based on 926,489 reviews.
• Rated 4.6 / 5 on Google play, based on 175,008 reviews 

What’s not clear is whether you can make a Lloyds money transfer abroad through the app. It isn’t mentioned on the Lloyds international money transfer web page so we would have to assume not. If you are looking to do this you can find suitable FX providers on our best money transfer apps page.

Conclusion:

Lloyds Bank has a very well reviewed app and whilst they can be a bit slow with their updates, users seem to be very impressed with the slick and simple functionality. We don’t however think it’s possible to make international transfers from your Lloyds account through the app. You certainly wouldn’t be able to conduct other types of hedging and international payment solutions as these are not offered a standard for private clients and SMEs.