Lloyds Banking Group (LON:LLOY) has moved to freeze the accounts of about 8,000 offshore banking customers, after asking them for three years to prove their identity, the Financial Times has reported. The move is part of a crackdown on money laundering.
Lloyds’ share price has been subdued in London in today’s session, having given up 0.55 percent to 57.78p as of 08:39 BST. The shares are underperforming the benchmark FTSE 100 index which has climbed marginally higher this Monday and is currently 0.16 percent better off at 7,419.51 points.
Lloyds freezes offshore accounts
The FT reported yesterday that Lloyds had frozen the accounts of about 8,000 offshore banking customers. The bailed-out lender was forced to take action at the end of last year to meet the money laundering rules in Jersey, where its international business is based.
Sources with knowledge of the situation told the newspaper that FTSE 100 rivals HSBC (LON:HSBA), RBS (LON:RBS) and Barclays (LON:BARC) had also tightened controls in Jersey, sending similar letters to check the identities of longstanding customers.
No specific concerns about customers
Lloyds said that it had no specific concerns about the customers but had to block thousands from accessing their accounts after they ignored repeated messages about the rules.
“Over the last three years we have made multiple attempts to contact these customers, asking that they provide us with the necessary information,” a spokesperson for the bailed-out lender told the FT. “Unfortunately, where a customer has not provided us with this necessary information we have had to freeze their account until we get the information.”
The spokesperson added that this was “also to protect the customer, as it prevents anybody else trying to use the account if the customer has stopped using it or has moved address”.
The news comes after last week, the company suffered a £45.5-million fine over failing to disclose suspicions of a fraud at its HBOS Reading unit.
According to MarketBeat, the blue-chip group boasts a consensus ‘buy’ rating, while the average target on the Lloyds’ share price currently stands at 71p.
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.