Lloyds TSB Foundation for Scotland restarts grant programme this month
14th April 2010
By Paul Jump, Third Sector Online
Foundation's move follows £2m sale of shares in Lloyds Banking Group
The Lloyds TSB Foundation for Scotland has announced that it will restart its grants programme later this month after selling £2m of shares in Lloyds Banking Group.
The foundation stopped giving new grants last October amid a row with Lloyds Banking Group over the company's desire to reduce the percentage of its profits that it was obliged to donate to its four UK foundations.
The other three foundations agreed to the cut, which was from 1 per cent to 0.5 per cent, but the Scottish foundation refused and was told in February that it would not receive any more funding from the bank after the current covenant expired in nine years' time.
The foundation has now raised £2m by selling half of the Lloyds Banking Group shares that it bought last year in a rights issue. A spokeswoman for the foundation said the bank had originally insisted the foundation was not entitled to take part in the rights issue but later backed down.
The foundation's constitution has also been updated under the guidance of the Office of the Scottish Charity Regulator to remove Lloyds Banking Group's veto on appointments to its board.
The bank refused to sanction the reappointment of Christine Lenihan as chair last year, but her reappointment has now been confirmed.
Mary Craig, chief executive of the foundation, admitted the foundation had been through a difficult time but said the return to grantmaking showed that it had turned a corner.
"It is safe to say that we now feel more secure as an independent organisation and, with funds in place, more confident that we will be here for the next 25 years," she said.
She said the foundation's remaining shares would be sold in tranches to fund further grants programmes beyond 2011.
"In addition, Lloyds Banking Group's announcement that it is returning to profit earlier than anticipated makes it likely that monies due to us through our covenant will begin to flow again earlier than expected," she said.
Further details about the grant programme will be released later this month.