IN THE MATTER OF LLOYDS BANK PLC AND THE BANK OF SCOTLAND PLC

Transcription

1 CLAIM NO: CR Nov 2017 IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION COMPANIES COURT CR Hildyard J 25 September 2017 IN THE MATTER OF LLOYDS BANK PLC AND THE BANK OF SCOTLAND PLC AND IN THE MATTER OF AN INTENDED APPLICATION UNDER PART VII OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 ORDER UPON THE APPLICATION, by the application notice issued on 19 September 2017 of the abovenamed Lloyds Bank plc (registered number ) and the Bank of Scotland plc (registered u e C togethe ith Llo ds Ba k pl, the Transferors, a d ea h a Transferor, oth of hi h fo pa t of the Llo ds Ba ki g G oup Lloyds Group AND UPON HEARING Martin Moore QC, counsel for the Transferors, and Robert Purves, counsel for the Prudential Regulation Authority and the Financial Conduct Authority IT IS ORDERED THAT, subject to any other or further order which may be given by the Court at the directions hearing listed to take place on 4 December 2017 as a result of a relevant change in circumstances, or design, of the ring-fencing scheme proposed by the Transferors pursuant to which part of their business will be transferred to Lloyds Bank Corporate Markets plc (the Transferee, which will be a non-ring fenced bank the Scheme o as a esult of the epo t p epa ed i accordance with section 109A of the Financial Services and Markets Act 2000 (as amended) or any submissions made thereat: (A) Where customers of Lloyds Group form part of a corporate group which has supplied Lloyds Group with a mailing address for particular customers within that corporate g oup a Corporate Group, i di idual oti e se t i the a e set out i pa ag aph 39 and 48 of the second witness statement of Mark George Culmer dated 19 September the Witness Statement shall e suffi ie t oti e to all the usto e s listed i the notice as customers to whom the notice is addressed for the purpose of paragraph 2 (a) of the Order dated 26 May 2017 (the May Order, a d the T a sfe o s shall ot e 1

2 required to give separate individual notice to all the relevant customers the subject of that notice within the Corporate Group, provided that, before sending such notice, the relevant Transferor shall have sought to obtain confirmation from the corporate group that any such mailing address and any named contact supplied to the Transferors remains accurate. (B) The following notices shall be sufficient notice to Category 2 Retail Customers, notwithstanding the requirement in paragraph 2(a) of the May Order that individual notice be given to any and all customers of the Lloyds Group who might wish to allege that they would be adversely affected by the carrying out of the Scheme: (1) Individual notice sent to Retail customers between July 2017 and September 2017 in a se ies of th ee usi ess as usual ha d op a d digital aili gs, as set out at paragraph 43.1 of the Witness Statement (Extract 2 in Appendix 1 hereto); (2) Individual notice sent or to be sent or provided to Retail customers in the date ranges and the manner set out in paragraph 43.2 of the Witness Statement (Extract 3 in Appendix 1 hereto) informing them of ring-fencing, that their accounts will not be affected and including wording substantially in the form of the draft text set out in that paragraph ( the Expanded Wording and in substantially the format of the example at Appendix 4 hereto; (3) Notice in substantially the form of the printed leaflets exhibited at MGC 8 of the Witness Statement (at Appendix 2 hereto) to be placed within all UK retail branches of the Transferors from mid to late October 2017 until the date of the sanction hearing, as set out in paragraph 51.1 of the Witness Statement (Extract 4 in Appendix 1 hereto); (4) Notice by way of a link created on or about 8 September 2017 on the primary home page websites of the brands set out in paragraph 51.2 of the Witness Statement leading to a page containing the information set out in paragraph 51.3 (Extract 4 in Appendix 1 hereto), such links to remain on the primary home page websites until the date of the sanction hearing; (5) Notice in substantially the form set out in paragraph 51.5 of the Witness Statement (Extract 4 in Appendix 1 hereto), to be printed on the reverse of paper e eipts f o Llo ds G oup s ATMs f o No e e to Ap il 2018; (6) Notice in similar form to the draft notice exhibited at MGC 10 of the Witness Statement (at Appendix 2 hereto) to be published in the gazettes and newspapers specified in paragraph 51.6 of the Witness Statement not less than 28 days before 28 February 2018, the form of which is to be finalised at the directions hearing listed to take place on 4 December 2017; (7) Notices containing substantially the information set out in paragraph 51.8 of the Witness Statement (Extract 4 in Appendix 1 hereto) to be placed in the banking 2

3 halls of all UK retail branches of the Transferors from October 2017 until the date of the sanction hearing; (C) The following notices shall be sufficient notice to those Category 2 Consumer Finance Customers (as defined in Schedule A hereto) specified in paragraphs 44.1 and of the Witness Statement (Extract 5 in Appendix 1 hereto), for the purpose of paragraph 2(a) of the May Order: (1) Notice in German or Dutch substantially in the form of the English text set out at paragraph 44.1 of the Witness Statement to be sent in December 2017 in the manner specified in that paragraph to those consumer finance customers specified in that paragraph; (2) Notice sent or provided to the 7.2 million consumer credit card customers specified in paragraph of the Witness Statement in the manner specified therein and including wording substantially in the form of the Expanded Wording. (D) No individual notice shall be required to be given to Category 3 customers of Lloyds Group as defined in Schedule A, notwithstanding paragraphs 2(a) and 3(a) of the May Order; (E) No individual notice shall be required to be given to New Customers as defined in Schedule A, notwithstanding paragraph 2(a) of the May Order; and (F) Where a customer of Lloyds Group has more than one type of product such that the customer falls within more than one of the different categories identified in this Order for the purpose of giving individual notice, then the appropriate notice shall be sent to that customer in respect of all such categories. The paragraphs of the Witness Statement referred to in this Order are appended at Appendix 1 to this Order. The exhibits to the Witness Statement referred to in this Order are appended at Appendix 2 to this Order. The May Order is appended as Appendix 3. The current draft of the example usi ess as usual communication that replaces exhibit MGC6 to the Witness Statement is appended as Appendix 4 to this Order. 3

4 It is not intended that this Order be served on any party The Court has supplied a sealed copy of this order to the solicitors for the Applicants: Linklaters LLP, One Silk Street, London EC2Y 8HQ Category 1 Customers are: SCHEDULE A Definitions (a) those customers of the Transferors whose products will transfer to the Transferee pursuant to the Scheme (and a small number of customers whose products will transfer to the Transferee by novation); and (b) those customers of the Transferors (who do not fall within (a) above) who are party to an agreement with a Transferor that will be duplicated under the Scheme, such that the original agreement between the customer and the Transferor remains in place and a new agreement is created in identical terms to the original agreement between the customer and the Transferee; and (c) those customers of the Transferors whose existing products are to be terminated or amended such that following the date the Scheme becomes effective, the same product will not be offered by either the Transferor or the Transferee or its sub-group. Category 2 customers are existing customers of Lloyds Group in the Retail division, including the Consumer Finance sub-division (as described in paragraphs 15.1 and 15.2 of the Witness Statement), or the Commercial Banking division (as described in paragraph 15.3 of the Witness Statement), whose products will not transfer to the Transferee under the Scheme and will not be curtailed but who have a contractual relationship with one or more of the Transferors and with whom the relevant Transferor or Transferors engage on a regular basis. Category 2 Retail customers are Category 2 Customers, who are retail customers within the Retail division of Lloyds Group. Category 2 Consumer Finance customers are Category 2 Customers, who are consumer finance customers within the Consumer Finance sub-division of the Retail division of Lloyds Group. Category 3 customers are: 1. Customers of the insurance business of the Lloyds Group, being customers of Scottish Widows Group Limited or any of the direct or indirect subsidiaries of Scottish Widows Group Limited carrying on the insurance and investment business of Lloyds Group; 2. Entities in which a Lloyds Group company, which is a direct or indirect subsidiary of a Transferor, has made an investment, where that Group company will be transferred as part of the 4

5 reorganisation described in paragraph 18 of the Witness Statement the Reorganisation to form part of the Equity Sub-Group as defined in paragraph 19.4 of the Witness Statement; 3. Customers of non-uk entities which are part of Lloyds Group, including Lloyds Bank International Limited (Jersey incorporated), Black Horse Offshore Limited (Jersey incorporated) and Lloyds Bank (Gibraltar) Ltd (Gibraltar incorporated), which following the Reorganisation will form part of the non-ring fenced bank sub-group comprising the Transferee and its subsidiaries; 4. Customers of MBNA Limited; 5. Customers of Lex Autolease Limited; 6. Customers of Black Horse Limited; 7. Customers of Cardnet Merchant Services Limited; and 8. Customers with products booked to non-uk branches of the Transferors, which products are subject to a foreign governing law and will be transferred as part of the Reorganisation to the Transferee, but not by means of the Scheme. New Customers are persons who become customers of Lloyds Group after the date of this Order and who, if they were customers of the Group on 25 September 2017, would be Category 2 or 3 customers. 5

6 APPENDIX 1 All references to E t a ts are to Extracts in this Appendix 1. Definitions In the extracts of the Witness Statement set out in this Appendix 1, various defined expressions are used. The meaning of those expressions, where they are not already defined in this Order, is set out below and is taken from the Witness Statement: Act ea s the Financial Services and Markets Act Court ea s the High Court of England and Wales. Directions Hearing ea s the directions hearing which has been fixed for 4 December 2017 to consider and approve the [T a sfe o s ] communications programme. Equity Sub-Group has the ea i g gi e i pa ag aph 9.4 of the Wit ess tate e t (set out in Extract 7). Expanded Wording has the meaning given to it in paragraph 43.2 of the Witness Statement (set out in Extract 3). FCA ea s the Fi a ial Co du t Autho it. FCA Guidance ea s the guidance on notifications by the FCA i Guida e o the FCA s app oa h to the implementation of ring-fencing and ring-fe i g t a sfe s he es Finalised Guidance 16/1, dated March First Directions Order ea s the order of Vos C and Snowden J made on 26 May 2017 (and referred to in this Order as the Ma O de a d appe ded hereto as Appendix 3). First Round BAU Mailing has the ea i g gi e in paragraph 43.1 of the Witness Statement (set out in Extract 2). First Witness Statement ea s the fi st witness statement of Mark George Culmer dated 10 May Group means Lloyds Banking Group. Intended Application ea s a i te ded appli atio to made, subject to the consent of the PRA, by the Transferors, that will seek the sanction of the Court under section 107 of the Act to a ringfencing transfer scheme for the transfer to the Transferee of part of the existing banking businesses of the Transferors. NRFB Sub-group means the non-ring fenced bank sub-group, comprising Lloyds Bank Corporate Markets plc (i.e. the Transferee) (directly and wholly owned by Lloyds Banking Group plc) and certain subsidiaries and participating interests of the Transferee. PRA ea s the P ude tial egulatio Autho it. 6

7 Representation Date ea s at least 42 calendar days prior to 28 February 2018, being the date by which any person who wishes to present written representations to the Court must file those with the Court and serve them upon the Transferors and the PRA. Sanction Hearing ea s the sa tio hea i g fo the he e. Sanction Hearing Date ea s the date of the a tio Hea i g, u e tl e pe ted to e 7 Ma h Scheme Report ea s a s he e epo t p epa ed a pe so ho satisfies the o ditio s i Section 109A(2) of the Act and which has had its form approved by the PRA in compliance with Section 109A(3) of the Act. UK ea s the U ited Ki gdo. UK Retail Branches ea s the retail branches of Lloyds Bank plc and of Bank of Scotland plc in the UK. 7

8 Extract 1: Paragraph (A) of the Order Witness Statement Extracts 39 The proposed approach that the Group wishes to adopt is set out below where the Group has a mailing address (potentially including a named contact) covering multiple legal entities that are customers of the Group and are part of a corporate group, the Transferors will send a single letter to that address (and contact) covering each relevant e tit, as listed i the G oup s s ste s. This ea s that if several legal entities in a corporate group have a single associated contact address, a single individual notice will be sent to that address, which will list out all the legal entities to whom that individual notice is addressed, and constitute individual notice to all the relevant legal entities. As it is not necessarily the case that all legal entities in any given corporate group will have the same contact address, this approach will be repeated for each set of legal entities with a common address within a corporate group; 39.2 if no such address is available for a given legal entity, the Group will follow its sta da d p o edu e of usi g as the ele a t aili g add ess the e tit s egiste ed office, as listed at Companies House; and 39.3 the oti e ill e se t to a a ed i di idual, if o e is spe ified o the G oup s systems. Different specified contact individuals at the same address will be treated as two separate addresses (so that even if two legal entities share the same postal add ess o the G oup s s ste s, ut ea h as asso iated ith a diffe e t a ed contact individual, the Group will send two individual notices, one to each company, rather than one). If no such named contact is specified, individual notices will be add essed to The Di e to s. 48 u je t to the Cou t s di e tio, he e Co e ial Ba ki g usto e s i Catego fo part of a larger corporate group, it is proposed that, to the extent that the relevant Transferor is able to do so, the standardised letters will be sent using the same approach as is set out for Category 1 customers at paragraph 38 1 above. This means that: 48.1 if more than one legal entity within a larger corporate group is a Commercial Banking customer that falls within Category 2 for these purposes and those entities share a common mailing address, a single letter will (to the extent reasonably practicable) be sent to that address listing such legal entities, following the process set out in paragraph 38 2 above; and 48.2 if one or more legal entities within a larger corporate group is a Commercial Banking customer that falls within Category 2, and that corporate group also comprises customers falling within Category 1, then, to the extent those legal entities share a 1 2 Note: The Witness Statement refers to paragraph 38. This is a typographical error and should correctly refer to paragraph 39. See footnote 1 above. 8

9 common mailing address, a single letter will (to the extent reasonably practicable) be sent to that address listing out both the Category 1 customers and the Category 2 customers within that corporate group (and identifying whether each legal entity falls within Category 1 or Category 2 for these purposes). 9

10 Extract 2: Paragraph (B)(1) of the Order 43.1 Fi st ou d of usi ess as usual aili gs From July 2017 to September 2017, a short set of paragraphs were included in a series of three usi ess as usual, ostl ha d op, aili gs ith so e usto e s e ei i g digital pape less o u i atio s se t to a ou d. illio etail usto e s ep ese ti g around 88% of all Retail customers). These paragraphs informed customers of ring-fencing, indicated that their accounts would not be affected by the changes and directed them to the appropriate website or to ask in branch or their usual contact for further information. These aili gs the First Round BAU Mailing i luded the follo i g wording (with slight amendments reflecting the different mailings): Follo i g the fi a ial isis, legislatio as passed to ette p ote t da -to-day banking services provided by large UK banks such as current and savings accounts, by separating riskier parts of banking, like investment banking, from them. This is called i g-fe i g. Ba ks a e sta ti g to ake these ha ges o, to o plete the January [Your [account] is not affected by these changes and your account details will stay the same./most Lloyds Bank Business accounts are not affected by these changes and will not see any changes to account details.] If you have [other] accounts that are affected, we will write to you about them. Other banks may also be in touch if accounts with them are changing. During this period of change you should be extra vigilant about fraud. The e s o e a out i g-fencing and fraud protection at <lloydsbank> <halifax> <bankofscotland>. com/ring-fe i g, o, ask [i a h/ ou usual o ta t]. The timing of these mailings meant that the wording did not expressly mention participation in the Court process for the Scheme; however, the wording nonetheless served to raise awareness of ring-fencing, gave customers some notice of the Scheme and directed customer to branches or websites for additional information (and from 31 August 2017, the websites advised customers to return to the website for periodic updates). A template copy of each of the three mailings (for each of the three relevant brands, i.e. Lloyds Bank, Bank of Scotland and Halifax), showing this wording is now produced to me a ked MGC5. 10

11 Extract 3: Paragraph (B)(2) of the Order 43.2 From September 2017 to January 2018, paragraphs on ring-fencing will be included in a series of mailings and other communications to Retail customers, which will cover the same content as the First Round BAU Mailing but will also include the following wording: o e of the i g-fencing changes are made by a formal Court process. Anyone who thinks the way we are implementing ring-fencing may affect them negatively, has the ight to pa ti ipate i the Cou t p o ess. You ll fi d full details of ho to do this f o id- December at <lloydsbank> <halifax> <bankofscotland>.com/ring-fencing, or, ask in branch or call you usual o ta t. (the core messages set out in that wording, together with the wording used for the First ou d BAU Maili g, the Expanded Wording. This E pa ded Wo di g ill e di e ted to Retail customers through the following means: o a state e t i se t fo i g pa t of a ha d op aili g of u e t a ou t banking statements to approximately 3 million customers from October to November 2017; within a letter included in a hard copy mailing about (unrelated) changes to terms and conditions to be sent to approximately 7.2 million credit card customers in mid- November; as a message prompt that appears on screen when a customer logs on to their online account webpages (whether from a computer or mobile device), which the customer has to click through in order to proceed to the next online banking page. This message prompt will appear at any time during a six-week period between mid- October 2017 and the end of November 2017 when accessing online account webpages (provided that, after the message has been clicked through, the message will no longer appear). It is estimated that three million customers will view the message over this period, based on average usage by customers over a six-week period. The period during which this message prompt appears cannot be extended due to othe e ui e e ts of the G oup; ho e e, i the G oup s e pe ie e the number of additional customers logging on after this period has elapsed would be low. In addition, most active internet banking customers will have seen the ringfencing message provided to them in a mailing sent to all internet banking customers during November (see paragraph below), so this message prompt is a method of providing additional awareness to customers; as a set of paragraphs in a letter included in a mixed hard copy and digital mailing (which will involve the customer receiving an notification of the communication, which the customer can then view in full by logging in to their online account and accessing their a ou t s i o, depe di g o usto e choices, to approximately 16.8 million customers with an internet banking account about (unrelated) changes to terms and conditions, which will be sent between 24 October and 11 December; 11

12 as a set of paragraphs in a hard copy mailing to be sent to an estimated five million Savings Passbook customers between 27 November and 8 December; and as a set of paragraphs in a number of miscellaneous other mandatory low volume mailings between September 2017 and January An example of the o di g to e i luded i the se o d ou d usi ess as usual aili gs is o p odu ed to e a ked MGC6 3, which also reflects the amendments made to the way in which the Expanded Wording has been set out within the second ou d usi ess as usual aili gs to efle t feed a k f o customer focus groups, as described in paragraph 63 below. These second round communications are directed at around 24.5 million customers in the Retail business area (representing around 70% of all Retail customers, and taking into account some overlap whereby an individual customer may receive these second round communications through more than one of the methods set out above). This wording will not be sent to a greater number of customers within the Retail division than this, because the e a e o othe usi ess as usual o u i atio ha els pla ed fo the pe iod f o October 2017 to early January 2018 that will reach a material number of additional customers and which can be used for this purpose (there is one additional mailing during No e e a d De e e, ut the state e t i se t sheet has al ead ee ooked fo another mandatory regulatory mailing and in any event this mailing would not be expected to reach many additional customers beyond those set out above). Taken together, the communications described in paragraph and this paragraph 43.2 are expected to be directed at around 32.8 million Retail customers. This leaves about 2.24 million Retail customers (representing just under 6.39% of such customers) that have not been provided with either form of the wording on the basis that, as described above, there a e o usi ess as usual o u i atio ha els pla ed fo the pe iod f o O to e 2017 to early January 2018 that will reach a material number of additional customers and hi h a e used to o ta t these usto e s. As the G oup o side s usi ess as usual channels to be the most proportionate and least confusing method for contacting these customers, it is expected that the communications set out at paragraph 51 5 below will be sufficient to bring further awareness of the Scheme to these remaining Category 2 Retail customers. 63 Following this feedback, the Transferors have amended the way in which the Expanded Wording is p ese ted i the se o d ou d of usi ess as usual o u i atio s to e se t to Retail customers, as described in paragraph 43.2 above, so that the size of the font used for this wording is increased and the wording is repositioned within those mailings, meaning the wording has increased prominence for customers Note: This exhibit is not appended to this Order, as the example of the BAU communication at MGC is ot the u e t d aft a d as e hi ited i e o. The u e t d aft of the example is appended as Appendix 4 to this Order. Set out in Extract 3 above. Set out in Extract 4 below. 12

13 Extract 4: Paragraphs (B)(3) to (B)(7) of the Order (For ease of understanding, the whole of paragraph 51 of the Witness Statement is extracted, although not all sub-paragraphs are relevant to paragraphs (B)(3) to (B)(7) of the Order.) 51 The means of publicising ring-fencing set out below are available to Category 2 (and, for the avoidance of doubt, Category 3, albeit they are not targeted at this category) customers so as to ensure as far as possible that these customers are aware of ring-fencing and the Scheme, and of their opportunities to participate in the Scheme process Branch notification leaflets From mid- to late October 2017 until the Sanction Hearing Date, leaflets will be made available for customers in all UK Retail Branches (with such leaflets limited to the UK Retail Branches on the basis that no Retail business is carried on outside the UK for customers that fall within Category 2). These leaflets will be pre-printed and available within the UK Retail Branches for a customer to pick up from openly available dispensers within the banking hall (or as directed by a member of staff). These leaflets contain a form of the Expanded Wording to inform customers of the Scheme, the Court process and their rights to participate in that process. The leaflets also set out the expected dates of the Directions Hearing and the Sanction Hearing. Following the Directions Hearing, it is further intended to update the leaflets to include information on the objections process, with such revised leaflets available from 6 December Copies of the leaflets currently available for each of the three brands under which the UK Retail Branches operate (Lloyds Bank, Bank of Scotland and Halifax), are now p odu ed to e a ked MGC8. These leaflets efle t the o te t of the leaflets that will be made available during mid- to late October 2017 on a pre-printed basis as described in this paragraph 51.1 save that the artwork used for those leaflets will be updated Webpages and online material From 10 April 2017 (for the majority of the brands referred to below; some brand webpages added the link later in April) until the Sanction Hearing Date, a link has been and will continue to be available on the primary home page websites of the following brands: (a) Lloyds Bank; (b) Bank of Scotland; (c) Halifax; (d) Scottish Widows Bank; (e) Cheltenham & Gloucester 6 ; f I tellige t Fi a e; g t Ja es Place Bank; (h) Birmingham Midshires (on both savings and mortgages sites); (i) AA (Automobile Association) Savings Accounts; and (j) Saga Savings Accounts. 7 Each link leads to a separate webpage, each of which carries the brand of the relevant 6 7 As all remaining Cheltenham & Gloucester customers have been migrated to Lloyds Bank, this website was decommissioned on 8 September 2017 and replaced with a re-direct to the Lloyds Bank website on the same date. The Group has webpages for the 10 brands listed here, but only has physical branches in the UK for Bank of Scotland, Lloyds and Halifax. 13

14 primary home page website but otherwise carries very similar wording. These brands cover all Retail Category 2 customers From 8 September until the Sanction Hearing Date, these webpages have been updated to include the expected dates of the hearing for this application, the Directions Hearing and the Sanction Hearing, together with the Expanded Wording, with the only change being that the final sentence of the Expanded Wording has ee a e ded to state: You ll fi d full details of ho to do this, f o id- December at a link from this page, or, ask in branch or all ou usual o ta t. Shortly following the Directions Hearing, this wording will be updated to have the li k to the dedi ated he e i osite des i ed fu the i pa ag aph As of end of August 2017, there had been 5,500 hits in aggregate for the webpages described above. Copies of the full wording included on these webpages in both chronological forms (with indications as to the various brands) are now produced to e a ked MGC Branch notifications ATM receipts From November 2 to Ap il, the G oup s ATMs ithi the UK ill issue a a a e ess aisi g essage i elatio to the he e o the e e se of a e eipt that the customer requests to be printed. It is expected that the wording used for these receipts will be the Expanded Wording, subject to minor amendments to take into account space constraints, and the fact that the wording will also be seen by non-g oup usto e s fo e a ple, it is e isaged that the se te es You a k account details will stay the same and ou a a o a ki g as ou do o. We ll be writing to any customers who are affected to explain what the changes mean for the. a e likel to e a e ded to The a k a ou t details of ou usto e s ill stay the same and they can carry on banking as the do o. We ll e iti g to a of ou usto e s ho a e affe ted to e plai hat the ha ges ea fo the.. The Transferors estimate that there are approximately 100,000 ATM transactions on the G oup s ATMs ithi the UK pe o th fo hi h a receipt is requested by the user, based on paper roll usage volumes (but it is also noted that not all users of the G oup s ATMs ill e usto e s of the G oup, o usto e s that fall ithi Catego 2 for these purposes). Due to system constraints, the Group is unable to include onscreen messages about ring-fencing on such ATMs Formal notice in legal Gazettes and national newspapers Formal notice of the application will be published following the Directions Hearing in the London, Edinburgh and Belfast Gazettes and in The Times, Financial Times (UK and international editions) and The Daily Mail. This notice is expected to be published shortly after the Directions Hearing, and in any event will be published not less than 28 calendar days prior to the Representation Date, in accordance with the direction given by the Court in paragraph 4 of the First Directions Order. The PRA 8 Other than the webpage for AA Savings Accounts, which was the following week. 14

15 and the FCA are expected to have reviewed the notice, which also contains a postal address and details of the microsite described at paragraph 51.9 below from which a statement setting out the terms of the Scheme, the Scheme Report (as defined in paragraph 6 of my First Witness Statement) 9 and a summary of the Scheme Report may be obtained (free of charge) by any person who so requests it (in accordance with paragraphs 42 and 44 of the FCA Guidance (as defined in paragraph 31 of my First Witness Statement)) 10. A current draft copy of the notice to be published as des i ed i this pa ag aph. is o p odu ed to e a ked MGC10. There is no requirement for the PRA or FCA to formally approve this notice. The final draft of the formal notice in legal Gazettes and national newspapers will be provided as part of the Intended Application Adverts in national newspapers From the first week of January 2018, prominent adverts will be published in a two week long campaign of periodic (but not daily) adverts in the newspapers that, at the time, following advice from marketing coverage specialists, are reasonably understood to most closel at h the de og aphi s of the G oup s etail consumers. These are currently anticipated to be The Telegraph, The Sun and the Herald. These adverts will be placed in the hard copy publications, and it is also anticipated that similar adverts will be included with similar frequency in the online websites of each of those newspapers. Each of these adverts will include wording based on the Expanded Wording, suitably modified solely to reflect the fact that the adverts are going out following the Directions Hearing Branch notification notices From October 2017 to the Sanction Hearing Date, A4 notices will be present in the banking halls in all UK Retail Branches. Depending on the layout of the branch, these notices will be either in a dedicated display space, or, if such dedicated space is not available, in a ring-binder that is the usual place used by customers to access important regulatory information. These notices are each intended to have the Expanded Wording, suitably modified solely to reflect the fact that the notices will be displayed following the Directions Hearing Dedicated microsite and further information The T a sfe o s ill also esta lish a dedi ated i osite o the e site fo the G oup. A light e sio of that i osite, ith limited content, will be available from mid-october This microsite will then be updated with more information shortly following the date of the Directions Hearing, so that documentation in connection with the Scheme will be made publicly available, in compliance with paragraph 6 of the First Directions Order. This will include the Scheme itself, a summary of the Scheme, the Scheme Report and a summary of the Scheme Report For the avoidance of doubt, included as a definition in the Definitions section of this Appendix 1. For the avoidance of doubt, included as a definition in the Definitions section of this Appendix 1. 15

16 The microsite will also include information about the Sanction Hearing Date and the process that must be followed by any person that wishes to participate in proceedings relating to the Scheme. The microsite will be the principal method of providing this information in respect of the Scheme to interested persons, including customers. However, hard copies of such documents will be made available to any person on receipt of a request in branch or over the phone, and information on the objections process and the date of the Sanction Hearing will also be communicated orally to persons who request such information in branch or over the phone. Telephony and branch staff will be trained, and provided with an internal script, to volunteer these documents and information (including mentioning that they may be easily obtained on the microsite) when responding to general requests for more information on the Scheme from a customer Social media On an ongoing basis from August 2017, the Group has monitored and will continue to monitor Twitter on a reactive basis to respond to queries relating to matters relating to ring-fencing (until such interest ceases). 16

17 Extract 5: Paragraph (C) of the Order 44.1 For the approximately 1.2 million savings, loans and mortgage customers of the Bank of Scotland plc in Germany and the Netherlands (as described in paragraph 30 above), a prominent short set of paragraphs will be conveyed via online secure messaging to each i di idual s o li e a ou t, hi h these usto e s ill e ei e he the log i o lette for the approximately 35,000 non-online customers) in December 2017 in German or Dutch. The English translation is as follows: We ould like to i fo ou a out up o i g ha ges o e i g Llo ds Ba k pl a d Bank of Scotland plc in the UK. Taking effect from January 1st 2019, new laws in the UK e ui e the ha ges k o as i g-fe i g of usi ess a ied o la ge UK a ks. This means that retail banking will be organizationally separated from parts of the business with a higher risk, for example Investment Banking. [In Germany, this is similarly achieved by the separate banking system.] In this way, the potential impacts of these higher-risk transactions on retail banking customers will be avoided. This change is a response to the financial crisis back in 2008 and is intended to better protect the assets of retail banking customers. For [Bank of Scotland Germany][Lloyds Bank Netherlands] and for you as a customer, your situation will not change under ring-fencing, since your products are still part of retail banking. Some of the ring-fencing changes are made by a formal process in a UK Court. Anyone who thinks the implementation of those changes may affect them negatively, has the right to participate in the public proceedings in the UK (including non-uk ased usto e s). You ll find details of how to do this, including the Court dates from early December at <web add ess>, o all [i se t telepho e u e ] For the approximately 7.2 million consumer credit card customers, the Expanded Wording will be included as a prominent set of pa ag aphs i a ha d op usi ess as usual oti e of variation mailing in November 2017; 30 Category 2 comprises customers in the Retail (including the Consumer Finance sub-division) and Commercial Banking divisions, whose products are not transferring to the Transferee pursuant to the Scheme and are not otherwise curtailed, with whom the Transferors have a contractual relationship, and with whom the Transferors engage on a regular basis. It comprises those customers with (for example) savings accounts, current accounts or lending products (including credit cards), where those products do not put such customers in scope to be Category 1 customers, and in respect of which the Transferors have not themselves identified any adverse impact as a result of the Scheme (and therefore do not consider such customers likely to be adversely affected by the Scheme). This category includes the customers of the Germany and Netherlands branches of Bank of Scotland plc (which are included in this category as customers who have a contractual relationship with Bank of Scotland plc whose products will not be transferred to the Transferee, unlike customers of other non-uk branches of the Transferors described in paragraph 34.9). 17

18 Extract 6: definitio of Category custo ers i Schedule A of the Order 15.1 etail The etail di isio p o ides u e t a ou ts, sa i gs p odu ts i ludi g lo g-term savings and investment products), loans, mortgages and investments to personal customers and small business customers (being business customers with an annual turnover of under 1 million) in the UK. It also provides such customers with i su a e a d edit a ds. A sig ifi a t u e of the G oup s etail a ki g customers have made deposits ith the G oup that a e p ote ted the Fi a ial e i es Co pe satio he e su je t to the fi a ial li its appli a le u de that scheme) Between them, the Transferors directly account for a substantial majority of the etail a ki g usi ess of the G oup. I additio to the T a sfe o s, the etail banking business within the UK is also undertaken by various subsidiaries of Lloyds Bank plc, including Lloyds Bank Private Banking Limited LBPBL and Scottish Widows Bank plc SWB plc As of epte e, the Wealth usi ess, p e iousl pa t of the etail di isio, is o t eated as fo i g pa t of the e l eated I su a e a d Wealth di isio hi h p e iousl as the I su a e di isio. The Wealth usi ess p o ides wealth management services to individuals with at least 250,000 in savings, investments or personal pensions, or a sole annual income of at least 250,000. This change in the management of the business has not involved any legal transfers of products, customers, services or legal entities within the Group, and the nature of the Wealth customers, and their relationship with the Transferors means that it is appropriate that the proposed communications plan of the Transferors continues to treat these custome s as etail usto e s. The efo e, efe e es to etail i this Witness Statement (other than the description of the business in this paragraph 15) should be read as continuing to i lude the Wealth usi ess Co su e Fi a e a su di isio of etail The Co su e Fi a e su -division provides the following products to UK consumer and commercial customers of the Transferors: (i) motor finance and online car finance products provided and serviced by the Bla k Ho se usi ess please see paragraph (iii) below for more detail, though the a di g of the p odu t a a, ei g eithe : i Bla k 11 The Group is currently undertaking a consolidation of the banking licences held by LBPBL and SWB plc with that of Lloyds Bank plc by: (i) effecting banking business transfers under Part VII of the Act of the businesses of LBPBL and SWB plc to Lloyds Bank plc; and (ii) relinquishing the banking licences held by LBPBL and SWB plc once those Part VII banking business transfers are completed. The High Court of England and Wales granted an order sanctioning the proposed banking business transfers on 12 September 2017, and it is currently anticipated that the Part VII banking business transfers will become effective on 1 October 2017 and that the application to relinquish the licences will be approved and confirmed as effective shortly thereafter. 18

19 Ho se ; ii Halifa, Llo ds a d Ba k of otla d ; o iii a othe, thi d party; (ii) (iii) (iv) unsecured personal loans; consumer and commercial credit cards and commercial charge cards. (Some commercial charge card customers obtain their products through third party eselle a ks. These eselle a ks a ket a d sell the ele a t p odu t to their customers. Lloyds Bank plc is the contractual counterparty to these arrangements, and these products are booked to the balance sheet of Lloyds Ba k pl a d e ai Llo ds a ded. This usi ess te ds to a ise i situatio s he e a e isti g usto e of the thi d pa t eselle a k wishes to have a commercial charge card but which cannot be provided by the eselle a k ; a d I te atio al o tgage se i es a losed ook of o tgage loa s e te ded to expatriate customers and is in the process of being run-off by Lloyds Bank plc) International Mortgage Services I additio to the T a sfe o s, the Co su e Fi a e usi ess of the G oup is also undertaken by various subsidiaries of Lloyds Bank plc, including: (i) (ii) (iii) (iv) Cardnet Merchant Services Limited, a joint venture between Lloyds Bank plc and FDR Limited, which is a merchant acquirer that enables retailers and merchants to accept electronic payments for their goods and services Cardnet. U de this a a ge e t, Llo ds Ba k pl as a e ha t acquirer) contracts with merchants for their payment services but does so u de the Ca d et t adi g a e. Ca d et o l o s the e efi ial i te est to such merchant acquirer arrangements, therefore, Lloyds Bank, using the Ca d et t adi g a e, holds legal title to these p oducts and they are booked to the balance sheet of Lloyds Bank plc; MBNA Limited, which is a specialist consumer credit card provider and was acquired on 1 June 2017 by the Group; 12 Bla k Ho se Li ited BHUK, hi h p o ides poi t of sale fi a e and wholesale lending for motor dealing stocking and fleet finance facilities to fleet operators. Pursuant to an agency agreement in 2013, BHUK acts as agent for Lloyds Bank plc, so Lloyds Bank plc is the lender for all products offered by BHUK under the Bla k Ho se a d. The efo e, e e if a customer enters into an arrangement with BHUK, the business generated by BHUK (in its capacity as agent) is booked to the balance sheet of Lloyds Bank plc; and Le Autolease Ltd, hi h ope ates the Le Autolease a d a d p o ides leasing and fleet management services. 12 The integration process of, and due diligence process relating to, MBNA is currently ongoing. 19

20 15.3 Co e ial Ba ki g The usi ess of the Co e ial Ba ki g di isio ithi the UK is p i a il o du ted the T a sfe o s. The Co e ial Ba ki g di isio p o ides businesses (ranging from small- and medium-sized enterprises, to large corporates and financial institutions) with a range of banking products and services, such as lending, transactional banking, working capital management, risk management, debt capital markets services and access to equity investment The usto e s that fo pa t of the Co e ial Ba ki g di isio a e u e tl categorised in the following customer segments: (i) (ii) (iii) (iv) (v) Small- and medium-sized enterprises SMEs, being customers with an annual turnover of between 1 million and 25 million, or who have taken out lending products with a value of between 75,000 (for existing customers) or 150,000 (for new customers) and 12.5 million; Mid-Markets MM, being: (a) companies with an annual turnover of between 25 million and 750 million ( 500 million in London); (b) commercial real estate companies with asset values of more than 25 million and who have taken out lending products with a value of more than 12.5 million; (c) higher and further education institutions, charities and local government organisations; and (d) housing associations who build and manage residential housing with greater than 1,000 units; Global Corporates GC, being global corporates that are: (a) companies with an annual turnover of over 750 million ( 500 million in London); and (b) upstream oil and gas companies requiring structured reserve based lending; Financial Institutions FI, being banks, building societies, insurance companies and brokers, pension administrators, wealth managers, stockbrokers, financial sponsors, institutional investors, brokerage firms, clearing and settlement firms, exchanges, market data firms, specialist finance firms and UK central government and government bodies. Group subsidiaries that are customers of the Group are also classified within this segment; and Client Asset Management customers CAM, being customers that hold products that form part of portfolios that are in the process of being run-off. The products are typically: (a) standalone transactional financing products no longer offered to the market by the Transferors, including structured lending secured against asset classes that are outside of current credit risk appetite or Group risk policy (such as aircraft financing and rail and ship leasing); (b) legacy real estate exposures that are also outside of current edit isk appetite o G oup isk poli ; a d o pha t a sa tio s that are no longer related or aggregated for credit risk and exposure 20

21 management purposes to any of the core client relationships set out in paragraphs (i) to (iv) above The products offered by the Commercial Banking division to its customers are in relation to, and include, financial derivatives (e.g. swaps, forwards and options), epu hase ag ee e ts o o l k o as epos, deposits e.g. st u tu ed deposits and certificates of deposits) and term deposits, bond origination and underwriting, loans (including arranging, structuring, syndicating and distributing loans) and other lending products (e.g. funded term loans, guarantees and revolving credit facilities) and securitisation services, payment services and trade finance products. 21

22 Extract 7: defi itio of Category custo ers i chedule A of the Order 18 In order to comply with the ring-fencing regime set out in Part 9B of the Act, as introduced by the Financial Services (Banking Reform) Act 2013 and as further supplemented by secondary legislation and related regulatory rules that is applicable to the Transferors (the Ring-fencing Regime, the Group is undertaking a reorganisation of its existing business the Reorganisation. While the Scheme will form a key part of this reorganisation, there are other steps which will also be undertaken, including: 18.1 the establishment of new branches of the Transferee in non-eea jurisdictions, which, once established, will receive the transfer of the non-eea banking business that is currently conducted by the Transferors from the existing non-eea branches of the Transferors, with such business to be transferred using manual novation processes or other local law mechanisms; the transfer of Scottish Widows Group Limited and its subsidiaries that carry on the G oup s e isti g i su a e usi ess f o Lloyds Bank plc to the ultimate holding company for the Group, Lloyds Banking Group plc, such that Scottish Widows Group Limited shall be a direct wholly owned subsidiary of Lloyds Banking Group plc; 18.3 the t a sfe of the G oup s p i ate e uit usi ess, Lloyds Development Capital (Holdings) Limited, and certain strategic and other investments and shareholdings, from the Transferors and other entities of the Group to a new holding company that is a direct wholly owned subsidiary of Lloyds Banking Group plc; and 18.4 the transfer to the Transferee of certain directly and indirectly owned subsidiaries of the Transferors that are incorporated in, or formed under the laws of, countries or territories which are not EEA member states and that carry on banking business the equity investments sub-g oup the Equity Sub-group o p isi g Llo ds De elop e t Capital (Holdings) Limited and certain strategic and other investments and shareholdings of the Group, all held under a newly formed company, LBG Equity Investments Limited (in turn directly held by Lloyds Banking Group plc). The Equity Sub-group includes LBG Equity Investments Limited and a number of its subsidiaries, including Uberior Investments Limited, Lloyds Development Capital (Holdings) Limited, LDC (Managers) Ltd, Housing Growth Partnership Manager Ltd and certain strategic and other investments For example, the business of Lloyds Bank plc, Jersey branch; Bank of Scotland plc, Isle of Man branch; Lloyds Bank plc, Singapore branch; Lloyds Bank plc, New York branch and Bank of Scotland plc, New York branch are intended to all be transferred to the NRFB Sub-group (as defined in paragraph 19.2) or one of the Transferors or wound up (or sold). For example, the overseas subsidiaries of the Transferors described in paragraph 17. This also includes Lloyds Bank (Gibraltar) Ltd which is incorporated within the EEA but will transfer as part of this non- EEA business and form part of the NRFB Sub-group (as defined in paragraph 19.2) due to its ongoing links to the non-eea parts of that banking business. 22

23 APPENDIX 2 Witness Statement Exhibits

24 19 Sep 2017 MARK GEORGE CULMER SECOND WITNESS STATEMENT IN THE HIGH COURT OF JUSTICE DATE: 19 SEPTEMBER 2017 CR CLAIM NO: CR CHANCERY DIVISION COMPANIES COURT IN THE MATTER OF LLOYDS BANK PLC - and - IN THE MATTER OF BANK OF SCOTLAND PLC - and - IN THE MATTER OF AN INTENDED APPLICATION UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 EXHIBIT MGC5 This is the exhibit marked MGC5 referred to in the second witness statement of Mark George Culmer dated 19 September 2017.

25 August 2017 <Contact Name> <Merchant Name> <Business Address> <Business Address> <Business Address> <Business Address> <Post code> <Campaign code / Cell code / Party ID> Lloyds Bank plc Business Banking PO Box 1000 BX1 1LT We re updating your business account<s> <Salutation> We are making some changes to your business account<s> which also mean we ll be updating your terms and conditions. Please read the Guide to your business account changes, which I ve included with this letter for details of the changes and when they will take effect. It also includes links to the relevant terms and conditions, so you can find them online once they ve been updated. Please keep this letter and information for your records and share with anyone else in your business that needs to be aware of these changes. [BCA/Treasurers Mid-Book] <Your new <Business Current Account><Treasurers Account> terms and conditions which we recently sent, will remain in place until the enclosed changes come into effect.> Contact us if you have any questions These changes will take place automatically so you can continue to use your account<s> as usual and there is nothing you need to do. If you have any concerns or would like to change your banking arrangements, please get in touch and we can discuss your requirements immediately and without charge. Read the enclosed Guide to your business account changes for updates, including: Changes to branch services Changes to cheque clearing cycle times Simplifying your terms and conditions If you have any questions please call your Business Management team on: < > If you d like to speak to someone about any of the information in this letter, please call your Business Management team on < >. Lines are open between 7am and 8pm, Monday to Friday, and from 9am to 2pm on Saturdays, excluding UK public holidays. Yours sincerely Elaine Hartley Head of Business Banking Products E _LDS_RBBFBM_0817.indd 1 19/07/ :24 Lloyds and Bos RBB Full Book August 2017 Lloyds Bank OTHER 3 LDS_RBBFBM JUL-2017 A :24:29 CMYK N N N

26 Our service promise If you experience a problem, we will always try to resolve it as quickly as possible. Please bring it to the attention of any member of staff. Our complaints procedures are published at lloydsbank.com/business/contactus Ring-fencing and your Business account Following the financial crisis, legislation was passed to better protect day-to-day banking services provided by large UK banks such as current accounts and small business banking accounts, by separating riskier parts of banking, like investment banking, from them. This is called ring-fencing. Banks are starting to make these changes now, to complete them by 1 January Most Lloyds Bank Business accounts are not affected by these changes and will not see any changes to account details. If you have any accounts that are affected, we will write to you about them. Other banks may also be in touch if accounts with them are changing. During this period of change you should be extra vigilant about fraud. There s more about ring-fencing and fraud protection at lloydsbank.com/business-ringfencing or, ask your usual contact. Please contact us if you would like this information in an alternative format such as Braille, large print or audio. If you have a hearing or speech impairment you can use the Next Generation Text (NGT) Service (previously Text Relay/Typetalk) or if you would prefer to use a Textphone, please feel free to call us on (lines open 7am 8pm, Monday Friday and 9am 2pm Saturday). Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service. Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all business customers will be covered. LDS_RBBFBM (08/17) E _LDS_RBBFBM_0817.indd 2 19/07/ :24

27 Guide to your business account changes We are making some changes which affect your business account<s> and services. Also, we are simplifying the terminology we use in our terms and conditions, so that they are easier to understand. We will use examples to help explain some of the terms. To reflect this we are updating your terms and conditions, and reducing the number of documents which make up our agreement with you. Some of the changes we are making are as a result of European legislation and Industry changes. If the UK implementation of these rules is different to the information we are providing below, we will follow the UK implementation rules. Please take time to read what is going to change and how it might affect your account<s>. Share this with anyone else in your business that needs to be aware of the changes. Overview of the changes The table below outlines each change, their effective date, and which accounts/services they affect. Following on from the table is more detailed information about each change. The changes will happen automatically so there is nothing you need to do. You can find updated terms and conditions at lloydsbank.com/businesstermsandconditions from 30 October Change Accounts/Services affected Effective date Changes to branch services Branch counter services for business accounts 2 November 2017 Post Office counter services for your day to day banking Changes to cheque clearing cycle Business current accounts Business Banking Instant Access accounts Client Call accounts Business current accounts Business Banking Instant Access accounts Client Call accounts 30 October October 2017 Changes to unpaid item fees Business current accounts 10 January 2018 Changes to how we meet regulatory requirements Business accounts Services linked to business accounts 13 January 2018 Third Party Provider Internet Banking Services 13 January 2018 Notification of payments Collecting money paid into your account by mistake How we will contact you when we suspect fraud International and foreign currency payments (Correspondent Bank Fee) Changes to charges for International Payments Business accounts Services linked to business accounts Business accounts Services linked to business accounts Business accounts Services linked to business accounts Business accounts Services linked to business accounts Corporate Online LloydsLink services 13 January January January January November 2017 Changes to charges for Telepay/Teledebit Telepay/Teledebit users 10 November 2017 Changes to LloydsLink (Online and Dial-up), Corporate Online and Commercial Banking Online New ways of authorising payments Corporate Online LloydsLink services Commercial Banking Online Business current accounts Business deposit accounts Business debit/cashpoint cards 1 November January 2018 We are simplifying our terms and conditions Business accounts 13 January 2018 E _LDS_RBBFBM_0817.indd 3 19/07/ :24

28 Changes to branch services Branch formats From 2 November 2017 we are changing the format of some of our branches to remove counters. This will mean that counter services will not be available at all branches. If a branch that you use regularly is changing, we will write to you to tell you where your nearest full service branch will be. To support the roll out of these new branch formats, we are updating our terms and conditions to make it clearer that not all services will be available in all branches. Updated terms and conditions effective from 2 November 2017 Deferred Checking service To support the roll out of our new branch formats, we are making changes to the description of our Deferred Checking service. Currently your terms and conditions state that you can drop off Deferred Checking bags at any branch. This facility will not be available in the new format branches. We are also updating your terms and conditions to make it clear that the applicable cut-off times for the Deferred Checking service are those which are displayed on the Deferred Checking drop-off box, rather than the branch closure time. This means that if you make a deposit after the displayed time, it will be processed and paid into your account on the next business day. Updated terms and conditions effective from 2 November 2017 Post Office counter services for your day-to-day banking In addition to using Lloyds Bank branch services, from 30 October 2017 you will also be able to use the Post Office to deposit cash and cheques, make withdrawals and get balance enquiries. Charges for depositing at the Post Office are the same as Lloyds Bank, but if you are making a payment into your business current account you will not be charged a Credit In fee. Cash withdrawals are free and you can withdraw up to your ATM limit using your Business Debit Card or Cashpoint Card These charges may change in the future and we will always write to you giving at least 2 months notice. Please be aware that Post Office branches may impose their own transaction limits. For further information please contact your local Post Office. Paying in cash When you use a Post Office branch to pay cash into a business account held with us, this won t reach us until the next business day. This means the funds will not be in your business account until the business day after you deposit them. Paying in cheques Please be aware that cheques presented at Post Office branches will be passed to us the next business day and will take one working day longer to process than a cheque paid in at a Lloyds Bank branch. Cheques will be processed under the existing cheque clearing cycle. Every Post Office has a cut-off time for paying in cash and cheques. The information above will apply if you pay them in before that time. If you deposit after the cut-off time an additional processing day will apply. Please check the cut-off time with the Post Office you wish to use. Updated terms and conditions effective from 30 October 2017 Changes to cheque clearing cycle From 30 October 2017 all banks are introducing a new system for clearing cheques called the Image Clearing System. This will allow banks to clear a digital image of a cheque rather than the original paper cheque. This means that some cheques you write using this system will clear within two working days. The Image Clearing System will be introduced gradually, so both the existing paper cheque clearing process and the new Image Clearing System will be used from 30 October You will be notified at the point that you present a cheque which payment cycle will apply. You can find the different clearing timescales for each type of cheque in your terms and conditions. Please be aware this does not apply to cheques presented at Post Office branches. This also means that some of the cheques that you write will be processed faster than others so it is important that if you are writing cheques you have the funds available to cover them. Updated terms and conditions effective from 30 October 2017 E _LDS_RBBFBM_0817.indd 4 19/07/ :24

29 Changes to Unpaid Item Fees We are changing the amount of the Unpaid Item Fee which is charged when you do not have enough money available in your account to allow us to make a payment. From 10 January 2018 the Unpaid Item Fee will be changed to 25 for each item not paid. Updated terms and conditions effective from 10 January 2018 Meeting regulatory requirements All UK banks are required to carry out regulatory checks to ensure that we know who our customers are. Upcoming changes in legislation mean that we will have to do these checks more frequently, and take action where it is found that a person has no right to remain in the UK. To help us comply with this change in industry regulation, we are updating our terms and conditions to allow us to terminate our agreement with you immediately if you, or an authorised signatory on your account, fails to meet a check which is required by law. We are also adding a right for us to remove a signatory from your account if they fail these checks. Updated terms and conditions effective from 13 January 2018 Third Party Providers This change only relates to accounts accessed via our internet banking services. From 13 January 2018, you can choose to allow a Third Party Provider (TPP) to access information on your account and to make payments for you from your account, provided the TPP is authorised by the FCA or another European regulator and you give your explicit consent. If you are thinking of using a TPP, you will be able to check with the regulator whether it is authorised before you use it. We will make changes to our conditions to allow for access by TPPs, and to make clear when we can refuse access. We will also take into account any guidance from our regulator. These changes will not affect any customers who do not use TPPs. Updated terms and conditions effective from 13 January 2018 Notification of payments From 13 January 2018 we will make clear you can decide whether information about payments out of your accounts should be provided by us either actively on paper or, if available, through online or mobile banking (e.g. on a statement) or made available for you to obtain (e.g. in a branch, online or by telephone banking). However if regulations require us to provide information differently we will comply with the new regulations. Updated terms and conditions effective from 13 January 2018 Collecting money paid into your account by mistake We can already return money paid into your account by mistake, but we re adding a term that allows us to share personal information if it is necessary for the payer to collect the money. This is because we re required to co-operate with other banks and share all relevant information needed so the payer can trace money sent to the wrong account. Updated terms and conditions effective from 13 January 2018 How we will contact you when we suspect fraud From 13 January 2018 we need to set out the secure procedure which we will use to contact you in the event of suspected or actual fraud or security threats. We already say how we will contact you but we will make it clearer that this will apply where we suspect fraud or security threat. Updated terms and conditions effective from 13 January 2018 E _LDS_RBBFBM_0817.indd 5 19/07/ :24

30 International and foreign currency payments (Correspondent Bank Fee) If you have an account that allows you to make overseas payments, the way we treat payments made to a bank outside the European Economic Area* (EEA) will change from 13 January 2018, as will payments in non-eea currencies to banks within the EEA. Currently, when you make a payment to a bank outside of the EEA and choose to pay the charges for the recipient, we cannot confirm any agency bank fees or beneficiary bank fees at the point of the transaction, therefore your account is debited with these at a later date. From 13 January 2018, we will charge you a Correspondent Bank Fee at the point of the transaction where you choose to pay the charges for the recipient. We are making this change so you can be certain how much it will cost to make the payment before doing so. We will update our conditions to reflect this. For payments within the EEA, you already cannot pay the charges for the recipient where the transfer is made in an EEA currency, but this will now also apply to transfers made in non-eea currencies. The Correspondent Bank Fee will be: Zone Country Fee 1 USA, Canada, Europe (non-eea) 12 2 Rest of the World 20 (*The EEA includes all the member states of the European Union, plus Iceland, Norway and Liechtenstein.) Updated terms and conditions effective from 13 January 2018 Charges for International Payments Standard International Payment charges linked to our Corporate Online and LloydsLink services are being simplified to 15, except for SEPA Credit Transfers. Updated terms and conditions effective from 1 November 2017 Charges for Telepay/Teledebit We are making a change to the cost of our Telepay/Teledebit service. From 10 November 2017 the cost per transaction will increase to 50p. Updated terms and conditions effective from 10 November 2017 Changes to LloydsLink (Online and Dial-up), Corporate Online and Commercial Banking Online LloydsLink (Online and Dial-up), Corporate Online and Commercial Banking Online are specialist online banking services offered to customers for a monthly subscription where their online banking needs are complex and/or have a need to transact regularly in foreign currency. This service charges different transaction fees than those we charge through your business bank account. If you subscribe to this service, we are making a change to the online CHAPS payment charges. From 1 November 2017 the cost per transaction will be increased to 15. Updated terms and conditions effective from 1 November 2017 E _LDS_RBBFBM_0817.indd 6 19/07/ :24

31 Preparing for the introduction of new payment methods There are now many new ways of authorising payments (for example contactless and biometrics such as fingerprint ID) and this is likely to continue. We are updating our current account, business debit card and business Cashpoint Card terms and conditions to make it clear that you can use any new technology that we provide you with to authorise payments and transactions. Updated terms and conditions effective from 13 January 2018 We are simplifying our terms and conditions We are simplifying our terms and conditions to make the information about your accounts and services easier to understand. These changes are being made to Business Current Account, Treasurers Account, Islamic Account, Trustee Account, Credit Union Account, Business Banking Instant Access Account, Business Banking Client Call Account, and the Business Debit and Cashpoint Card terms and conditions. Your terms and conditions will look different The changes we are making to simplify our terms and conditions will reduce the number of documents which form your agreement with us. This means that from 13 January 2018, when you go online to look at your terms and conditions, the documents will look different to the ones you were given when you opened your account, but it will still contain all the information we have agreed with you. In addition to making the changes above, we will also make the following changes: We are making it clearer: º how we will check that an instruction has been authorised by you. º when we will each be liable for unauthorised transactions on your accounts. º when we can refuse to make a payment, for example if we suspect fraud. º that where we do not enforce a right that we have under our agreement with you (for instance allowing you more time to fund your account to make a payment and avoid charges) this doesn t affect our right to enforce that right with you on another occasion. º that, if we change the terms of the agreement, you can reject the change by telling us, and asking us to close the account(s) and services to end your relationship with us. We will not require a minimum notice period for termination in these circumstances. We are introducing a right to block access to accounts or services where a regulatory requirement requires us to, where we suspect fraud, or you have not provided us with information that the law requires us to hold about you or about your authorised users. We are also introducing an express right for us to be able to terminate your relationship with us immediately where we are required to do so by law or regulation, or where you or any person connected with your account is physically or verbally abusive towards our staff. We are adding in an obligation for you to tell us as soon as reasonably practicable: º if you change your business address, or º if there are changes to your main business activity, members or people who you want us to deal with on your behalf. Updated terms and conditions effective from 13 January 2018 Cashpoint is a registered trademark of Lloyds Bank plc. The Post Office is registered trademark of the Post Office Ltd. E _LDS_RBBFBM_0817.indd 7 19/07/ :24

32 August 2017 Mr AB Sample 55 Sample Street Sampletown Sampleshire SS99 9SS Bank of Scotland PO Box 548 Leeds LS1 1WU Overdraft fees are changing Dear Mr Sample You may not use an overdraft at the moment, or your account may not allow one, but in case you use one in future this is to let you know about changes to overdraft fees. The new fees are designed to make it easier for you to understand the costs of short-term borrowing and they take effect from 2 November NEW DAILY OVERDRAFT FEE for every full 1p x 7 you borrow each day One daily fee. At the moment, you pay a number of fees together each month plus interest on the amount you borrow. From 2 November, you ll pay a daily overdraft fee of 1p for every 7 you borrow each day. Daily charging. Instead of paying all fees in one go each month, the new fee will be charged at the end of each day you use your overdraft so you ll pay for what you borrow on the day you borrow it. This will help you keep track of how much your overdraft costs you. If you go over your limit So all your payments are made, it s important you manage your account within your Planned Overdraft limit. If you don t have enough money in your account or you reach your limit, you may not be able to make any more payments. If a payment takes you over your limit or we stop it, you won t be charged. You can read about the changes in more detail in the Overdraft Guide on the following pages or come and speak to us to see if you are eligible for an overdraft. Stay a step ahead with mobile alerts To help you avoid going over your overdraft limit, we ll automatically send you alerts if you ve registered a mobile phone with us, so make sure we have your latest mobile number. There s more about mobile alerts in the guide and at bankofscotland.co.uk including how to register your mobile. Read the enclosed guides From 2 November, you ll pay daily overdraft fees so you ll be able to find out what your overdraft costs straightaway Some payments may be stopped if you don't have enough money in your account Mobile alerts to help you stay on top of your money Check your balance frequently it s easy online or with the mobile app Know your overdraft limit see your statement, log in to Mobile or Internet Banking or ask us. If you have any questions: Call us on Lines are open 24 hours a day, 7 days a week. Visit us in branch. If you re comfortable with these changes, there is nothing you need to do and they ll take effect on 2 November If you prefer not to accept them, you can close your account before this date without any charge. If you decide to close your account, you ll need to repay your overdraft balance if you have one. Turn over for more detail

33 If you have any questions about this letter or want to discuss your borrowing options, please call us on Our lines are open 24 hours a day, 7 days a week. Yours sincerely Joanne Overton Head of Personal Current Accounts Ring-fencing and your account Following the financial crisis, legislation was passed to better protect day-to-day banking services provided by large UK banks such as current and savings accounts, by separating riskier parts of banking, like investment banking, from them. This is called ring-fencing. Banks are starting to make these changes now, to complete them by 1 January Your current account is not affected by these changes and your account details will stay the same. If you have other accounts that are affected, we will write to you about them. Other banks may also be in touch if accounts with them are changing. During this period of change you should be extra vigilant about fraud. There s more about ring-fencing and fraud protection at bankofscotland.co.uk/ringfencing or, ask in branch. If you'd like this in another format such as large print, Braille or audio CD please ask in branch. If you have a hearing or speech impairment you can contact us using the Next Generation Text (NGT) Service or via Textphone on (lines are open 9am to 5.30pm, 7 days a week). If you're Deaf and a BSL user, you can use the SignVideo service available at bankofscotland.co.uk/accessibility/signvideo Our promise Our promise is to do our best to resolve any problems you have. If you wish to complain visit your local branch or call or (Textphone or , if you have a hearing impairment). For more information visit bankofscotland.co.uk/contactus/complain Overdrafts are subject to status and repayable on demand. Cashpoint is a registered trademark of Lloyds Bank plc and is used under licence by Bank of Scotland plc. Depositpoint is a trademark of Lloyds Bank plc and is used under licence by Bank of Scotland plc. Keep your details up-to-date Please check that we have the correct contact details for you by logging into Internet Banking and reviewing the telephone numbers, address and marketing preferences that we hold for you. Bank of Scotland plc. Registered in Scotland No. SC Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number We adhere to The Standards of Lending Practice which are monitored and enforced by the LSB: Eligible deposits with us are protected by the Financial Services Compensation Scheme. We are also covered by the Financial Ombudsman Service. Information correct as of July 2017.

34 Overdraft Guide These changes will apply to all bank accounts from 2 November Although you don t currently use an overdraft, please read this guide as you may use one in future. 1. How we calculate the new daily overdraft fee The daily overdraft fee is charged at a rate of 1p for every 7 you borrow each day. When calculating the daily overdraft fee, we will only use every full 7 you have borrowed, so if you borrow less than 7 you won t be charged. Overdraft Guide EXAMPLE: An account is overdrawn by 100 over the fee-free amount The daily overdraft fee is 1p for every 7 you borrow Overdraft of 100 First, divide the amount of the overdraft by 7 and round down = 14 (rounded down) Then multiply the result by 1 penny 14 1p = 14p This gives the amount we charge each day 0.14 per day Your fee-free amount The Classic Account Planned Overdraft will no longer have an interest and fee-free amount. All other accounts will keep their existing fee-free amounts. The new daily overdraft fee We will no longer write to give you a summary of fees you re due to pay as your fees will come out of your account at the end of each day. You ll be able to view these on your bank statement or via Internet Banking at the end of each day. You may still have monthly overdraft fees to pay At the moment you pay for your overdraft in a single payment up to two months after you ve used it. So if you use your overdraft in the months leading up to 2 November, you may still have some monthly fees to pay after the changes take effect. This means that for a short time, you may still see monthly fees applied to your account as well as the new daily overdraft fee. 2. Changes to how and when you pay fees Example of existing bank account overdraft fees Overdraft charged at an interest rate of 19.89% EAR variable EAR is the Equivalent Annual Rate. This is the actual annual rate of an overdraft. It doesn t take into account other fees and charges. Fees are charged monthly up to 2 months after you use your overdraft New overdraft fees for all accounts from 2 November 2017 Charged at 1p for every 7 of overdraft borrowed each day Fees are charged daily Monthly Overdraft Usage Fee - 6 Monthly Overdraft Usage Fee - 0 Returned Item Fee - 10 per item Returned Item Fee - 0 Unplanned Overdraft fees Overdraft of less than 25-5 per day Overdraft above per day Unplanned Overdraft fees - 0 There may be some occasions we don't make a payment when there's not enough money in your account. Use tools such as mobile alerts to keep track of your balance and get in touch to see if you are eligible to apply for an increased overdraft or discuss other borrowing options.

35 3. How the new fees compare with existing fees Fees for an account with a Planned Overdraft of 100 above the fee-free amount This example is for 10 days and assumes the amount borrowed doesn t change p interest charged at 19.89% EAR variable Monthly Overdraft Usage Fee Daily overdraft fee of 14p charged at end of each day for 10 days Existing fees New fees 4. Tools to help you manage your money Mobile alerts help you keep in control If you ve given us a mobile number we ll alert you when you re near or go over 0 or your Planned Overdraft limit. We ll send you an alert after the first time you use your overdraft to let you know you are being charged. We ll also alert you when you don t have enough money to pay a standing order so you have time to move money into your account. Please check today that we have the right number for you. From 2 November, these alerts will replace the alerts you may already get. You can find information on how to opt out of mobile alerts in branch, over the phone or by logging on to Internet Banking. Our budgeting tool helps you see where your money goes Keeping track of your money can be tricky, but using our budgeting tool gives you a full picture of your finances, so you can see the difference between your income and spending. There s also a list of useful contacts on the tool if you want any more help or advice. Go to bankofscotland.co.uk/ helpcentre/ budgeting-tool.asp to try it. You ll find more information to help you online For more information about the new overdraft fees, visit bankofscotland.co.uk/ overdraftguide You can work out how much your new fees might be using the overdraft calculator and you ll also find a list of FAQs and information about the alternative borrowing options you could consider. Go online to bankofscotland.co.uk/ overdraftguide

36 Changes to your bank account conditions We are making some changes to your Bank Account Conditions and Banking Charges. These will come into effect from 2 November Please take some time to read and understand what is going to change and how it might affect you. What is happening? We are removing debit interest and changing the fees we charge for overdrafts. We are replacing all of our overdraft fees with a daily overdraft fee of 1p per 7 borrowed. This fee will only apply to Planned Overdrafts. Where can I find it in my terms and conditions? We re revising Sections E and F of our Bank Account Conditions and also our Banking Charges section. Sections E and F are set out below in full as well as the relevant paragraphs from the Banking Charges section. Because we are making these changes, we are also making changes to other conditions that refer to debit interest, fees and overdrafts. If you would like a full copy of these new terms and conditions, please call us, go online or ask in branch after 2 November Banking Charges The following replaces the wording in the Overdrafts, Returned items, Our Control option and Examples Unplanned Overdraft fees paragraphs. Overdrafts If overdrafts are available on your account, you can apply for one. Any decision to offer you a Planned Overdraft facility will be based on your eligibility. If we agree to the Planned Overdraft and you use it, we will charge you a daily overdraft fee. The amount will depend on what your balance is at the end of the day. If you try to make a payment from an account without a Planned Overdraft limit, which would make your account overdrawn, or which would take your account over your Planned Overdraft limit, that payment may not be made. We won t charge you any fees for refusing or trying to refuse your requested payment. But we will continue to charge a daily overdraft fee for your use of a Planned Overdraft if any fees or payments take, or have taken, your account above your Planned Overdraft limit. In this case, the daily overdraft fee will not exceed the maximum daily overdraft fee you would pay. For example, if your Planned Overdraft limit is 140 and the daily fee for this is 20p per day, we won t charge you more than 20p per day, even if you are overdrawn by more than 140. To ensure all your payments are made, it s important that you manage your account within your Planned Overdraft limit. If you want to increase your Planned Overdraft limit, please get in touch with us. We ll see if we can help. All overdrafts are subject to status and repayable on demand. Classic, Platinum, Silver, Student and Graduate daily overdraft fees Our daily overdraft fee will depend on the amount of your Planned Overdraft balance each day at the end of the day including bank holidays and weekends. We will take the amount of the daily overdraft fee from your account overnight. When we charge a daily overdraft fee it becomes part of your balance. This means if we charge a further daily overdraft fee, it is based on the total balance including previous daily overdraft fees. The daily overdraft fee is 1p for each full 7 of your Planned Overdraft you have used. We also have fee-free amounts depending on which account you hold please see the section below for more information. Representative example If you use a Planned Overdraft of 1,200 on our Classic Account, then we'll charge you a daily overdraft fee of We won t charge you any interest or other fees for using your overdraft. Fee-free overdraft amounts Some of our current accounts have fee-free amounts. This means if you re in debit by the amount or less, you won t pay a daily overdraft fee. The amounts are set out below: Account Amount Impact Platinum Silver The daily overdraft fee will be charged when your balance reaches 7 over your fee-free amount. Student account Year Amount Impact Year 1 of study first months from account opening Year 1 of study months 7-9 from account opening Year 1 of study months from account opening Years 2 and 3 of study 1,000 1,500 Years 4 to 6 of study 2,000 The daily overdraft fee will be charged when your balance reaches 7 over your fee-free amount. Changes to your bank account conditions

37 Graduate account Year Amount Impact 1 st year after graduation 2,000 2 nd year after graduation 3 rd year after graduation 1,500 1,000 The daily overdraft fee will be charged when your balance reaches 7 over your fee-free amount. Overdraft information for Under 19s and Basic Accounts Planned Overdrafts are not available on these accounts. If you do go overdrawn, you will not be charged a daily overdraft fee. No new account applications can be accepted for this product. If the type of account you hold isn't listed here please visit bankofscotland.co.uk for an overview of your account features and fees and charges, or ask in branch. Avoiding a daily overdraft fee You can avoid paying a daily overdraft fee if your balance goes overdrawn during the day but you pay money into your account later the same day to bring it back into credit. You have until the end of the day to get your account back into credit and avoid paying a daily overdraft fee for that day. The money needs to be immediately available to use, so you could transfer money from another personal account you have with us via Mobile Banking, Internet Banking or Telephone Banking or pay in cash at a branch with counters. You should check your available balance via Mobile Banking, Internet Banking, Telephone Banking, or through a Cashpoint or in branch, to make sure you've enough money in your account to pay everything due. The money in your account must be available to withdraw. It is important that any payments you want to make are made. You should always try to make sure there is enough money in your account and try to move any large payments that are due to a time in the month when you have more money. Subject to our lending assessment of you, you should also make sure your Planned Overdraft is enough to allow all payments to be made. Section E Interest and charges On some accounts, we pay interest on amounts we hold for you. If your account allows you to borrow, we charge a daily overdraft fee on amounts you borrow, and also have fees and charges for some accounts and some services. 8. Where can you find information about our interest rates and account fees? Our Banking Charges section or additional conditions contain our interest rates, daily overdraft fees and charges for all accounts and services. You can also get the details by contacting us or through our website (see How to contact us ). 9. How do we work out how much interest to pay or daily overdraft fee to charge? 9.1. Unless we have told you otherwise, we calculate any interest we pay at the end of every monthly interest period, based on the daily balance of your account We pay interest by crediting it to your account. We pay any interest on amounts credited to your account as they become part of the account balance. The additional conditions will tell you when we pay interest on your account. This is usually monthly, three-monthly, six-monthly or yearly. If interest is due to be paid on a non-working day, we will pay interest up to, and on, the next working day We pay interest gross and it will count towards your personal savings allowance (a tax-free amount on income from savings). You are responsible for paying any tax you owe directly to HM Revenue & Customs We calculate any daily overdraft fee by looking at the balance of your account at the end of each day. This includes weekends and bank holidays. We then take the amount of the daily overdraft fee out of your account overnight. We may take a daily overdraft fee and other account charges you owe us from the same account or from any other account you have with us. When we charge a daily overdraft fee it becomes part of your balance. This means that if we charge a further daily overdraft fee, we base it on the total balance including previous fees. Section F Overdrafts We offer Planned Overdrafts on most of our accounts, so if we agree you can have one, you can borrow up to the agreed limit when you need to. Meaning of words we ve used: available funds Planned Overdraft This is: the amount of any credit balance on your account; plus the unused amount of any Planned Overdraft; less any funds showing in your account that are not yet available for use (like recent cheque deposits) and any payments we have authorised but not yet taken from your account. An overdraft up to a limit we agree in advance. 10. When do you have to repay an overdraft and what does it cost? When you apply, we will give you Planned Overdraft terms. If we do not tell you how long your Planned Overdraft is available, it will continue until ended by you or us An overdraft is repayable on demand. This means we can ask you to repay it (or part of it), at any time We will review your Planned Overdraft regularly and can reduce or remove any limit based on this review. This might be, for example, due to a change in your personal circumstances. If any changes are to be made to your Planned Overdraft limit, we will give you at least 30 days notice unless we need to take action sooner to protect our interests or for regulatory reasons We may charge a daily overdraft fee on our Planned Overdrafts, unless your balance is within any daily overdraft fee-free amount. Details of the daily overdraft fee that applies to overdrafts are set out in Section P If you do not have available funds, you may not be able to make that payment. If a payment isn t made, we will tell you If a payment is made which takes you over your Planned Overdraft limit, we will not charge you a daily overdraft fee for that part which is above your Planned Overdraft limit. The daily overdraft fee will continue to be applied to the amount of your Planned Overdraft. We may also ask you to repay the unarranged amount. Any further attempted payments may be rejected until you have sufficient available funds to cover these payments.

38 Additional changes to your bank and savings account terms and conditions We are making some additional changes to your bank and savings account terms and conditions. The changes will come into effect as described below and will apply to all bank accounts and savings accounts unless otherwise stated below. If you accept the changes to your account terms and conditions you don t need to do anything If your account is a bank account or a savings account that is a payment account, and you prefer not to accept the changes, you can close it at any time without charge. If your savings account is a non-payment savings account, this option to close at any time without charge may not apply. Your account conditions will say if your account is a non-payment savings account. If we don't hear from you before the relevant date on which each change takes place, we will take this to mean that you have accepted the individual changes. Please call us on , lines are open 24 hours a day, or ask in branch if you have any questions. A new, faster way of clearing sterling cheques From 30 October 2017 onwards, all banks are introducing a new system for clearing cheques called the Image Clearing System. This system will allow banks to clear a digital image of a cheque rather than the original paper cheque. Cheques paid in using this system will clear within two working days. The Image Clearing System will be introduced gradually and will operate alongside the existing paper cheque clearing system. You can find the different timescales for each clearing system in your conditions. Funding your account to make a payment Currently, if you do not have enough money in your account to make a payment, you have until 3.30pm the same day to pay money in. From 30 October 2017 we are changing this cut-off time to 2.30pm. Third Party Providers This change will not affect non-payment savings accounts. From 13 January 2018, you can choose to allow a Third Party Provider (TPP) to access information on your account and to make payments for you from your account, provided the TPP is authorised by the FCA or another European regulator and you give your explicit consent. If you are thinking of using a TPP, you will be able to check with the regulator whether it is authorised before you use it. We will make changes to our conditions to allow for access by TPPs, and to make clear when we can refuse access. We will also take into account any guidance from our regulator. These changes will not affect any customers who do not use TPPs. Notification of payments This change will not affect non-payment savings accounts. From 13 January 2018, we will make clear you can decide whether information about payments out of your accounts should be actively provided by us (e.g. in a statement) or instead made available for you to obtain (e.g. online, from a branch or by telephone banking). However if regulations require us to provide information differently we will comply with the new regulations. Changes at some branches From 2 November 2017, we are changing some branches. There will be staff at them, but not all services. In branches with counters, we will usually limit you to 10 coin bags a day. Where Depositpoint is available, the cut-off time will be one hour before closing. In branches without counters: You cannot pay in or take out coins For most accounts you can pay in up to 50 notes or cheques, using an Immediate Deposit Machine You ll need your card to take out up to 500 cash from a Cashpoint You can order Travel Money, but only collect it or sell it back at a branch with counters You cannot pay in cash or cheques to credit card, loan or mortgage accounts There will be no Depositpoint, Post boxes or Night Safe services If you pay in or take out cash at mobile branches, the cash limit may be less than at branches with counters. Collecting money paid into your account by mistake We can already return money paid into your account by mistake, but from 13 January 2018 we are adding a term that allows us to share personal information if it is necessary for the payer to collect the money. This is because we are required to co-operate with other banks and share all relevant information needed so the payer can trace money sent to the wrong account. How we will contact you when we suspect fraud In our conditions booklet, we already state how we will contact you if we need to do so. From 13 January 2018, we will make it clearer that we will use these same contact details and appropriate secure procedures to make contact if we suspect fraud or a security threat. Additional changes to your bank and savings account terms and conditions

39 International and foreign currency payments (Correspondent Bank Fee) If you have an account that allows you to make overseas payments, the way we treat payments made to a bank outside the European Economic Area* (EEA) will change from 13 January 2018, as will payments in non-eea currencies to banks within the EEA. Currently, when you make a payment to a bank outside of the EEA and choose to pay the charges for the recipient, we cannot confirm any agency bank fees or beneficiary bank fees at the point of the transaction, therefore your account is debited with these at a later date. From 13 January 2018, where you choose to pay the charges for the recipient we will instead charge you a Correspondent Bank Fee at the point of the transaction. We are making this change so you can be certain how much it will cost to make the payment before doing so. We will update our conditions to reflect this. Inbound international payment fees For customers with a Basic Account, we haven't charged fees for electronic payments received in sterling into this account from another bank outside the UK but within the EU since 2 September Your conditions will reflect this from 2 November Resolving a complaint We currently try to resolve a problem within three working days in line with regulatory requirements. From 2 November 2017 we are adjusting our conditions to reflect this. For payments within the EEA, you already cannot pay the charges for the recipient where the transfer is made in an EEA currency, but this exclusion will now also apply to transfers made in non-eea currencies. The Correspondent Bank Fee will be: Zone Country Fee 1 USA, Canada, Europe (non-eea) 12 2 Rest of the World 20 (*The EEA means all the member states of the European Union and Iceland, Norway and Liechtenstein). International card charges A number of different charges apply: When you use your Visa Debit or Cashpoint card to withdraw cash in a currency other than sterling, and When you use your Visa Debit card to pay for goods and services in a currency other than sterling. From 5 July 2017 we have made changes to the following charges: The non-sterling purchase fee, if it applies to your account, has been reduced to 0.50 per transaction. The non-sterling cash fee and the foreign cash fee have each become a flat fee of 1.50 per transaction. Your account agreements will be updated to reflect these changes on 2 November 2017, along with the changes below that will happen on that date. From 2 November 2017: We are amending the wording of your account agreement to clarify that charges apply not just to cash withdrawals outside the UK, but whenever you withdraw cash at a cash machine or over the counter in a currency other than sterling, and also whenever you pay for goods and services in a currency other than sterling. CHAPS payments From 2 November 2017 we are updating the Banking Charges section of your conditions to clarify that a fee for making a CHAPS payment will apply whichever bank the payment is sent to.

40 FINANCIAL SERVICES COMPENSATION SCHEME INFORMATION SHEET Basic information about the protection of your eligible deposits Eligible deposits in Bank of Scotland plc are protected by: Limit of protection: If you have more eligible deposits at the same bank: If you have a joint account with other person(s): Reimbursement period in case of bank s failure: Currency of reimbursement: To contact Bank of Scotland plc for enquiries relating to your account: The Financial Services Compensation Scheme ( FSCS ) 1 85,000 per depositor per bank 2 The following trading names are part of your bank: Halifax, Intelligent Finance (IF), Birmingham Midshires (BM Savings), Bank of Scotland, Bank of Scotland Private Banking, Bank of Scotland Germany, Lloyds Bank (in the Netherlands only), Bank of Wales, and St. James s Place Bank. Some savings accounts under the AA Savings and Saga brand names are also deposits with Bank of Scotland plc. All your eligible deposits at the same bank are aggregated and the total is subject to the limit of 85,000 2 The limit of 85,000 applies to each depositor separately 3 20 working days 4 Pound sterling (GBP, ) or, for branches of UK banks operating in other EEA Member States, the currency of that State. You can visit one of our branches, call us, go online or write to us at the address below: The Mound, Edinburgh, EH1 1YZ To contact the FSCS for further information on compensation: More information: Financial Services Compensation Scheme, 10th Floor Beaufort House, 15 St Botolph Street, London, EC3A 7QU Tel: or ICT@fscs.org.uk continued overleaf

41 Additional Information 1 Scheme responsible for the protection of your eligible deposit Your eligible deposit is covered by a statutory Deposit Guarantee Scheme. If insolvency of your bank should occur, your eligible deposits would be repaid up to 85,000 by the Deposit Guarantee Scheme. 2 General limit of protection If a covered deposit is unavailable because a bank is unable to meet its financial obligations, depositors are repaid by a Deposit Guarantee Scheme. This repayment covers a maximum of 85,000 per bank. This means that all eligible deposits at the same bank are added up in order to determine the coverage level. If, for instance a depositor holds a savings account with 80,000 and a current account with 20,000, he or she will only be repaid 85,000. This method will also be applied if a bank operates under different trading names. Bank of Scotland plc also trades under those trading names detailed above. This means that all eligible deposits with one or more of these trading names are in total covered up to 85,000. In some cases eligible deposits which are categorised as temporary high balances are protected above 85,000 for six months after the amount has been credited or from the moment when such eligible deposits become legally transferable. These are eligible deposits connected with certain events including: a. Certain transactions relating to the depositor s current or prospective only or main residence or dwelling; b. A death, or the depositor s marriage or civil partnership, divorce, retirement, dismissal, redundancy or invalidity; c. The payment to the depositor of insurance benefits or compensation for criminal injuries or wrongful conviction. More information can be obtained under 3 Limit of protection for joint accounts In the case of joint accounts, the limit of 85,000 applies to each depositor. However, eligible deposits in an account to which two or more persons are entitled as members of a business partnership, association or grouping of a similar nature, without legal personality, are aggregated and treated as if made by a single depositor for the purpose of calculating the limit of 85, Reimbursement The responsible Deposit Guarantee Scheme is the Financial Services Compensation Scheme, 10th Floor Beaufort House, 15 St Botolph Street, London, EC3A 7QU, Tel: or , ICT@fscs.org.uk It will repay your eligible deposits (up to 85,000) within 20 working days until 31 December 2018; within 15 working days from 1 January 2019 until 31 December 2020; within 10 working days from 1 January 2021 to 31 December 2023; and within 7 working days from 1 January 2024 onwards, save where specific exceptions apply. Where the FSCS cannot make the repayable amount available within 7 working days, it will, from 1 June 2016 until 31 December 2023, ensure that you have access to an appropriate amount of your covered deposits to cover the cost of living (in the case of a depositor which is an individual) or to cover necessary business expenses or operating costs (in the case of a depositor which is not an individual or a large company) within 5 working days of a request. If you have not been repaid within these deadlines, you should contact the Deposit Guarantee Scheme since the time to claim reimbursement may be barred after a certain time limit. Further information can be obtained under Other important information In general, all retail depositors and businesses are covered by Deposit Guarantee Schemes. Exceptions for certain deposits are stated on the website of the responsible Deposit Guarantee Scheme. Your bank will also inform you of any exclusions from protection which may apply. If deposits are eligible, the bank shall also confirm this on the statement of account. A deposit is excluded from protection if: EXCLUSIONS LIST 1. The holder and any beneficial owner of the deposit have never been identified in accordance with money laundering requirements. For further information, contact your bank. 2. The deposit arises out of transactions in connection with which there has been a criminal conviction for money laundering. 3. It is a deposit made by a depositor which is one of the following: credit institution, financial institution, investment firm, insurance undertaking, reinsurance undertaking, collective investment undertaking, pension or retirement fund 1, public authority, other than a small local authority. For further information about exclusions, refer to the FSCS website at 1 Deposits by personal pension schemes, stakeholder pension schemes and occupational pension schemes of micro, small and medium sized enterprises are not excluded. BOSFSCS (02/17)

42 July /303/00001/ Changes to your savings account terms and conditions Dear We are making some changes to your savings account terms and conditions. I ve enclosed a Guide to Changes that explains the changes and the dates they will take place. What happens next If you accept the changes to your account terms and conditions you don t need to do anything. If you have any questions Go to halifax.co.uk/savings Call us on Lines are open 24 hours a day, 7 days a week. Chat to our colleagues in your local branch Make an appointment to visit us. If your savings account is a payment account, and you prefer not to accept the changes, you can close it at any time without charge. If your savings account is a non-payment savings account, this option to close at any time without charge may not apply. Your account conditions will say if your account is a payment or a non-payment savings account. If we don t hear from you before the relevant date on which each change takes place, we will take this to mean you have accepted the individual changes. If you have any questions about this letter, pop into branch, or call us on lines are open 24 hours a day, 7 days a week. Yours sincerely Philip Robinson Savings Director

43 Ring-fencing and your account Following the financial crisis, legislation was passed to better protect day-to-day banking services provided by large UK banks such as current and savings accounts, by separating riskier parts of banking, like investment banking, from them. This is called ring-fencing. Banks are starting to make these changes now, to complete them by 1st January Your savings account is not affected by these changes and your account details will stay the same. If you have other accounts that are affected, we will write to you about them. Other banks may also be in touch if accounts with them are changing. During this period of change you should be extra vigilant about fraud. There s more about ring-fencing and fraud protection at halifax.co.uk/ringfencing or, ask in branch. Do you need extra help? If you d like this in another format such as large print, Braille or audio CD please ask in branch. If you have a hearing or speech impairment you can contact us using the Next Generation Text (NGT) Service or via Textphone on (lines are open 7 days a week, 9am to 5.30pm). If you re Deaf and a BSL user, you can use the SignVideo service available at halifax.co.uk/accessibility/signvideo Our promise Our promise is to do our best to resolve any problems you have. If you wish to complain visit your local branch or call or (Textphone or , if you have a hearing impairment). For more information visit halifax.co.uk/contactus/how-to-complain Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service. Not all Telephone Banking services are available 24 hours a day, 7 days a week. Please speak to an adviser for more information. Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number Eligible deposits with us are protected by the Financial Services Compensation Scheme. We are also covered by the Financial Ombudsman Service. Information correct as of 23rd June 2017.

44 19 Sep 2017 MARK GEORGE CULMER SECOND WITNESS STATEMENT IN THE HIGH COURT OF JUSTICE DATE: 19 SEPTEMBER 2017 CR CLAIM NO: CR CHANCERY DIVISION COMPANIES COURT IN THE MATTER OF LLOYDS BANK PLC - and - IN THE MATTER OF BANK OF SCOTLAND PLC - and - IN THE MATTER OF AN INTENDED APPLICATION UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 EXHIBIT MGC8 This is the exhibit marked MGC8 referred to in the second witness statement of Mark George Culmer dated 19 September 2017.

45 RING-FENCING AND LLOYDS BANK Following the financial crisis, UK legislation was passed to better protect customers and the day-to-day banking services they rely on. The new rules mean large UK banks must separate personal banking services such as current and savings accounts, from risks in other parts of the business, like investment banking. This is called ring-fencing. Banks are taking different approaches to how they are implementing these rules and are making changes now, to complete them by 1 January You can find out more about ring-fencing and bank structural reform legislation, on the Financial Conduct Authority s website and the Bank of England s website What ring-fencing means for Lloyds Bank customers The majority of our personal banking services are not affected and most customers will not see any changes. Your bank account details will stay the same and you can carry on banking just as you do now. We will write to any customers who are affected explaining what the changes mean for them. Eligible deposits will continue to be protected by the Financial Services Compensation Scheme (FSCS). You can find more about the FSCS at Some of the ring-fencing changes are made by a formal Court process The Court process is called the Ring-Fence Transfer Scheme (RFTS). Anyone who thinks the implementation of these changes may negatively affect them, has the right to participate in this Court process. You ll find full details of how to do this from early December, on our website. Or, ask in branch. Timetable for the Court process: 25 September 2017: Interim hearing, for preliminary directions on some of the communications we need to make for the RFTS 4 December 2017: Directions hearing to seek the Court s approval for our application for the Court process to begin, including our overall plan for the communications we need to make for the RFTS 27 March 2018: Sanction hearing. At the sanction hearing the Court will consider and, if it sees fit, approve the RFTS. These dates are subject to change so please check our website regularly for updates. Be extra vigilant about fraud Although the majority of our customers will see no changes, other banks will be making changes related to ring-fencing. During this period of change in UK banking, you should be extra vigilant about fraud. Don t assume that letters, phone calls, s and text messages are genuine even if the person knows information about you. Don t feel pressured into making a decision or acting quickly. A genuine bank or organisation won t mind waiting if you want time to think. If you receive instructions about a change in bank details from companies you make regular payments to, you should contact them on a number you normally use to check these are genuine. At Lloyds Bank we ll never call and ask you to: Share Internet Banking account details like user ID, password and memorable information. Tell us your Personal Security Number (PSN) for Telephone Banking. Tell us your PIN code, expiry date, CVV number (the last 3 digits of the security code on the back of your card). Move money to a so-called secure account, safe or holding account. Move your money or ask you to transfer funds to a new sort code and account number that we provide. For more information on how to stay secure online, visit lloydsbank.com/security which includes details of our online and mobile banking guarantee. If you have accounts with other banks If you have accounts with other banks, they will tell you if your accounts are affected by the changes they are making. If you have any questions you should contact the relevant bank directly. E _HLDS_RETAILRF_A4_0917.indd 1 07/09/17 3:36 PM Ring Fencing PDFS Lloyds Bank N/A 1 HLDS_RETAILRF_A SEP-2017 A :36:47 CMYK N N N

46 Our promise Our promise is to do our best to resolve any problems you have. If you wish to complain visit your local branch or call or (Textphone or if you have a hearing impairment). For more information visit If you d like this in another format such as large print, Braille or audio CD please ask in branch. If you have a hearing or speech impairment you can contact us using the Next Generation Text (NGT) Service or via Textphone on (lines are open 24 hours a day, 7 days a week). If you re Deaf and a BSL user, you can use the SignVideo service available at lloydsbank.com/accessibility/signvideo.asp Calls may be monitored or recorded. Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number Eligible deposits with us are protected by the Financial Services Compensation Scheme. HLDS_RETAILRF_A4 (09/17) E _HLDS_RETAILRF_A4_0917.indd 2 07/09/17 3:36 PM

47 Ring-fencing and Bank of Scotland Following the financial crisis, UK legislation was passed to better protect customers and the day-to-day banking services they rely on. The new rules mean large UK banks must separate personal banking services such as current and savings accounts, from risks in other parts of the business, like investment banking. This is called ring-fencing. Banks are taking different approaches to how they are implementing these rules and are making changes now, to complete them by 1 January You can find out more about ring-fencing and bank structural reform legislation, on the Financial Conduct Authority s website and the Bank of England's website What ring-fencing means for Bank of Scotland customers The majority of our personal banking services are not affected and most customers will not see any changes. Your bank account details will stay the same and you can carry on banking just as you do now. We will write to any customers who are affected explaining what the changes mean for them. Eligible deposits will continue to be protected by the Financial Services Compensation Scheme (FSCS). You can find more about the FSCS at Some of the ring-fencing changes are made by a formal Court process The Court process is called the Ring-Fence Transfer Scheme (RFTS). Anyone who thinks the implementation of these changes may negatively affect them, has the right to participate in this Court process. You ll find full details of how to do this from early December, on our website. Or, ask in branch. Timetable for the Court process: 25 September 2017: Interim hearing, for preliminary directions on some of the communications we need to make for the RFTS 4 December 2017: Directions hearing to seek the Court s approval for our application for the Court process to begin, including our overall plan for the communications we need to make for the RFTS 27 March 2018: Sanction hearing. At the sanction hearing the Court will consider and, if it sees fit, approve the RFTS. Be extra vigilant about fraud Although the majority of our customers will see no changes, other banks will be making changes related to ring-fencing. During this period of change in UK banking, you should be extra vigilant about fraud. Don t assume that letters, phone calls, s and text messages are genuine even if the person knows information about you. Don t feel pressured into making a decision or acting quickly. A genuine bank or organisation won t mind waiting if you want time to think. If you receive instructions about a change in bank details from companies you make regular payments to, you should contact them on a number you normally use to check these are genuine. At Bank of Scotland we ll never call and ask you to: A Share Internet Banking account details like username, password and memorable information. A Tell us your Personal Security Number (PSN) for Telephone Banking. A Tell us your PIN code, expiry date, CVV number (the last 3 digits of the security code on the back of your card). A Move money to a so-called secure account, safe or holding account. A Move your money or ask you to transfer funds to a new sort code and account number that we provide. For more information on how to stay secure online, visit bankofscotland.co.uk/security which includes details of our online fraud guarantee. If you have accounts with other banks If you have accounts with other banks, they will tell you if your accounts are affected by the changes they are making. If you have any questions you should contact the relevant bank directly. These dates are subject to change so please check our website regularly for updates. E _HBOS_RETAILRF_A4_0917.indd 1 07/09/17 3:12 PM Ring Fencing PDFS BoS N/A 1 HBOS_RETAILRF_A SEP-2017 A :12:33 CMYK N N N

48 If you'd like this in another format such as large print, Braille or audio CD please ask in branch. If you have a hearing or speech impairment you can contact us using the Next Generation Text (NGT) Service or via Textphone on (lines are open 9am to 5.30pm, 7 days a week). If you're Deaf and a BSL user, you can use the SignVideo service available at bankofscotland.co.uk/accessibility/signvideo Our Service Promise Our promise is to do our best to resolve any problems you have. If you wish to complain visit your local branch or call or (Textphone or , if you have a hearing impairment). For more information visit bankofscotland.co.uk/contactus/complain Calls may be monitored or recorded. Bank of Scotland plc. Registered in Scotland No. SC Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number Eligible deposits with us are protected by the Financial Services Compensation Scheme. HBOS_RETAILRF_A4 (09/17) E _HBOS_RETAILRF_A4_0917.indd 2 07/09/17 3:12 PM

49 RING-FENCING AND HALIFAX Following the financial crisis, UK legislation was passed to better protect customers and the day-to-day banking services they rely on. The new rules mean large UK banks must separate personal banking services such as current and savings accounts, from risks in other parts of the business, like investment banking. This is called ring-fencing. Banks are taking different approaches to how they are implementing these rules and are making changes now, to complete them by 1 January You can find out more about ring-fencing and bank structural reform legislation, on the Financial Conduct Authority s website and the Bank of England s website What ring-fencing means for Halifax customers The majority of our personal banking services are not affected and most customers will not see any changes. Your bank account details will stay the same and you can carry on banking just as you do now. We will write to any customers who are affected explaining what the changes mean for them. Eligible deposits will continue to be protected by the Financial Services Compensation Scheme (FSCS). You can find more about the FSCS at Some of the ring-fencing changes are made by a formal Court process The Court process is called the Ring-Fence Transfer Scheme (RFTS). Anyone who thinks the implementation of these changes may negatively affect them, has the right to participate in this Court process. You ll find full details of how to do this from early December, on our website. Or, ask in branch. Timetable for the Court process: 25 September 2017: Interim hearing, for preliminary directions on some of the communications we need to make for the RFTS 4 December 2017: Directions hearing to seek the Court s approval for our application for the Court process to begin, including our overall plan for the communications we need to make for the RFTS 27 March 2018: Sanction hearing. At the sanction hearing the Court will consider and, if it sees fit, approve the RFTS. These dates are subject to change so please check our website regularly for updates. Be extra vigilant about fraud Although the majority of our customers will see no changes, other banks will be making changes related to ring-fencing. During this period of change in UK banking, you should be extra vigilant about fraud. Don t assume that letters, phone calls, s and text messages are genuine even if the person knows information about you. Don t feel pressured into making a decision or acting quickly. A genuine bank or organisation won t mind waiting if you want time to think. If you receive instructions about a change in bank details from companies you make regular payments to, you should contact them on a number you normally use to check these are genuine. At Halifax we ll never call you and ask you to: Share Online Banking account details like username, password and memorable information. Tell us your Personal Security Number (PSN) for Telephone Banking. Tell us your PIN code, expiry date, CVV number (the last 3 digits of the security code on the back of your card). Move money to a so-called secure account, safe or holding account. Move your money or ask you to transfer funds to a new sort code and account number that we provide. For more information on how to stay secure online, visit halifax.co.uk/security which includes details of our online and mobile banking guarantee. If you have accounts with other banks If you have accounts with other banks, they will tell you if your accounts are affected by the changes they are making. If you have any questions you should contact the relevant bank directly. E _HHFX_RETAILRF_A4_0917.indd 1 07/09/17 2:53 PM Ring Fencing PDFS Halifax N/A 1 HHFX_RETAILRF_A SEP-2017 A :53:07 CMYK N N N

50 Do you need extra help? If you d like this in Braille, large print, audio CD or another format please ask in branch. If you have a hearing or speech impairment you can contact us using the Next Generation Text (NGT) Service or via Textphone on (lines are open seven days a week, 9am to 5.30pm). If you re Deaf and a BSL user, you can use the SignVideo service available at halifax.co.uk/accessibility/signvideo Our promise Our promise is to do our best to resolve any problems you have. If you wish to complain visit your local branch or call or (Textphone or , if you have a hearing impairment). For more information visit halifax.co.uk/contactus/how-to-complain Calls may be monitored or recorded. Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number Eligible deposits with us are protected by the Financial Services Compensation Scheme. HHFX_RETAILRF_A4 (09/17) E _HHFX_RETAILRF_A4_0917.indd 2 07/09/17 2:53 PM

51 19 Sep 2017 MARK GEORGE CULMER SECOND WITNESS STATEMENT IN THE HIGH COURT OF JUSTICE DATE: 19 SEPTEMBER 2017 CR CLAIM NO: CR CHANCERY DIVISION COMPANIES COURT IN THE MATTER OF LLOYDS BANK PLC - and - IN THE MATTER OF BANK OF SCOTLAND PLC - and - IN THE MATTER OF AN INTENDED APPLICATION UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 EXHIBIT MGC9 This is the exhibit marked MGC9 referred to in the second witness statement of Mark George Culmer dated 19 September 2017.

52 Lloyds Bank Retail page

53 Lloyds Bank Commercial page

54 Bank of Scotland Retail page

55 Bank of Scotland Commercial page

56 Halifax Retail page (commercial not relevant)

57 Scottish Widows Bank

58 Cheltenham & Gloucester

59 Birmingham Midshires

60 Intelligent Finance

61 Saga

62 St James's Place Bank

63 The AA

64

65 Lloyds Retail

66 Lloyds Business

67 BOS Retail

68 BOS Business

69 Halifax

70 Scottish Widows

71 BM Mortgages

72 BM Savings

73 IF

74 St James Place Bank

75 The AA

76 Saga

77 19 Sep 2017 MARK GEORGE CULMER SECOND WITNESS STATEMENT IN THE HIGH COURT OF JUSTICE DATE: 19 SEPTEMBER 2017 CR CLAIM NO: CR CHANCERY DIVISION COMPANIES COURT IN THE MATTER OF LLOYDS BANK PLC - and - IN THE MATTER OF BANK OF SCOTLAND PLC - and - IN THE MATTER OF AN INTENDED APPLICATION UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 EXHIBIT MGC10 This is the exhibit marked MGC10 referred to in the second witness statement of Mark George Culmer dated 19 September 2017.

78 Confidential Draft [This document is a confidential working draft subject to further review, amendment and governance by Lloyds Banking Group and Counsel] APPLICATION TO TRANSFER BUSINESS CLAIM NO: CR-2017-[ ] IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION COMPANIES COURT LLOYDS BANK PLC and BANK OF SCOTLAND PLC and LLOYDS BANK CORPORATE MARKETS PLC and THE FINANCIAL SERVICES AND MARKETS ACT 2000 NOTICE IS HEREBY GIVEN that on [4 December 2017], an application was presented to the High Court of Justice of England and Wales (the Court ) by Lloyds Bank plc ( Lloyds ) (incorporated in England and Wales and with its registered office at 25 Gresham Street, London EC2V 7HN, United Kingdom), Bank of Scotland plc ( BoS ) (registered in Scotland and with its registered office at The Mound, Edinburgh EH1 1YZ, Scotland) and Lloyds Bank Corporate Markets plc ( LBCM ) (incorporated in England and Wales and with its registered office at 25 Gresham Street, London EC2V 7HN, United Kingdom) for an order of the Court, under Part VII of the Financial Services and Markets Act 2000, sanctioning a ring-fencing transfer scheme (the Scheme ) for the transfer of the Transferring Business (as defined in the Scheme) of Lloyds and BoS to LBCM. The application for sanction is currently scheduled to be heard on 27 March 2018 at [Rolls Building, 7 Rolls Buildings, Fetter Lane, London EC4A 1NL]. Any change to the hearing date will be published at [details of website to be included]. [The Transferring Business comprises certain [derivative, lending, and trade finance transactions and other financing arrangements]. The Scheme will also operate to, among other things, duplicate certain master agreements relating to derivatives, including certain ISDA master agreements. Such business will include applicable third party guarantees and other forms of security which will therefore be transferred or otherwise affected by the Scheme.] Copies of a statement setting out the terms of the Scheme, a summary of certain of its principal terms, a report of the skilled person relating to the Scheme (the Scheme Report ) [and a summary of the Scheme Report] are available, free of charge, at [details of the website to be included], on request by ing [include relevant address], writing to [include generic LBG contact name and address], or by requesting those documents in any of our branches. [The effective date of the Scheme is currently expected to be [29 May 2018], or such other date as Lloyds, BoS and LBCM may agree in writing, subject to Court sanction.] A

79 Confidential Draft [This document is a confidential working draft subject to further review, amendment and governance by Lloyds Banking Group and Counsel] Any person who alleges that they would be adversely affected by the carrying out of the Scheme is entitled to be heard at the application for sanction provided that they have before the hearing filed with the Court a written statement of the representations that they wish the Court to consider and served copies on the PRA at [address to be confirmed with PRA] and the transferor concerned. The Court has directed that such representations be filed and served by 28 February [The Court may exercise its powers to restrict the manner and time in which any person who has filed and served such representations after 28 February 2018 is heard.] The written statement of representations may be filed with the Court [either by sending it or delivering it to the Court s address above or by to [ address to be confirmed] or by using the CE- File Website]. Copies of the statement may be served on the PRA at [address and address to be confirmed with the PRA] and on the relevant transferor at [its registered office address above or by to [ address to be confirmed]]. A copy of the statement should also be sent to Linklaters LLP (solicitors to Lloyds, BoS and LBCM) at One Silk Street, London, EC2Y 8HQ, United Kingdom or by to [ address to be confirmed] (ref. [ ]) as soon as possible but in any event by 28 February Lloyds, BoS and LBCM have agreed that sending a copy of the statement to Linklaters LLP as set out in this paragraph will constitute the service of a copy of such statement on the transferor concerned mentioned in the paragraph above. Dated [ ] Linklaters LLP One Silk Street London EC2Y 8HQ Solicitors to Lloyds Bank plc, Bank of Scotland plc and Lloyds Bank Corporate Markets plc A

80 APPENDIX 3 May Order

81 IN THE HIGH COURT OF JUSTICE 14 Jul 2017 CHANCERY DIVISION COMPANIES COURT Sir Geoffrey Vos, Chancellor of the High Court CR Mr Justice Snowden 26 May 2017 IN THE MATTER OF LLOYDS BANK PLC AND IN THE MATTER OF BANK OF SCOTLAND PLC AND IN THE MATTER OF AN INTENDED APPLICATION UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 ORDER UPON the application by Part 8 Claim Form dated 5 May 2017 in the above intended matter by the Claimants: (1) Lloyds Bank plc (registered number ) whose registered office is at 25 Gresham Street, London, EC2V 7HN; and (2) Bank of Scotland plc (registered number SC327000) whose registered office is at The Mound, Edinburgh, EH1 1YZ; for preliminary directions in respect of an application which the Claimants will in due course, in common with certain other banks incorporated in the United Kingdom and subject always to the prior consent of the Prudential Regulation Authority ( the PRA ), make under Section 107 of the above-mentioned Act ( the FSMA ) for an order sanctioning under section 111 of FSMA a ring-fencing transfer scheme ( the RFTS ). 1