They won the battle

Lloyds TSB Foundation for Scotland won £3.5 million on Thursday in the Court of Session, in relation to their share of Lloyds Banking Group's profits. The full court verdict can be read here. That is great news for a charitable foundation which was fighting for it's rights under a covenant with Lloyds Banking Group, who were only going to give the foundation £38,920. According to the court judgement, this was in breach of the covenant between the two parties and the disagreement was down to interpretations over whether the sums to be given were in proportion to pre- or post-tax profits.

While it is good news the foundation have won this battle and charities all over Scotland will benefit from this large sum, I fear they have only won the battle, not the war against Lloyds Banking Group.

Two years ago, the Banking group tried to impose changes in its covenants with the foundation, primarily in relation to the amount of the banking group's profits the foundation were entitled to. The Scottish foundation refused to agree (there are also foundations for England and Wales and Northern Ireland). Due to the lack of agreement being reached, Lloyds Banking Group decided to withdraw funding of the foundation.

Given Lloyds Banking Group was bailed out by the Government, in many ways it is owned by the tax payer. And, bankers aren't exactly popular these days, so why do they give themselves this sort of bad publicity? I do admire the foundation's trustees for not giving into bullying and intimidation and I hope the banking group can be forced to change its mind. Unfortunately, I think I might be being a wee bit naive on this one.