Campaign: LLoyds TSB alerts clients to reporting law change

Complex changes to international financial reporting standards (IFRS) for 2005/06 posed a threat to the derivatives business at Lloyds TSB's financial markets division.

Campaign IAS 39
Client Lloyds TSB Corporate Markets
PR team Moorgate Group and in-house
Timescale September 2005-May 2006
Budget £35,000

Corporate clients that had previously bought derivative products to hedge against the risks posed by fluctuations in interest rates or foreign currencies would be required to report the value of their derivative portfolios in their 2005/06 accounts.

These so-called IAS 39 regulations would mean reporting their ‘fair value' - which takes into account fluctuating market values - meaning that a company's balance sheet would record derivatives as large potential liabilities, ignoring the fact they were intended to insure against such losses.

Given this, many corporate clients were steering clear of them, much to Lloyds TSB's regret.

Objectives
To create a highly technical campaign that explained the issues involved to an audience that, although sophisticated, might need the nuances of the rule changes explained in a digestible format. To simultaneously promote Lloyds TSB's consultancy services.

Strategy and Plan
Specialist corporate banking PR agency Moorgate Group - retained by Lloyds TSB Corporate - was brought in to assist the in-house marketing team with the problems facing the financial markets division.

The target audience were corporate treasurers - the relevant decision makers within the corporate clients - and accountants, the group most likely to be advising corporate clients. There were key titles for both groups: The Treasurer is the magazine of the Association of Corporate Treasurers; while Accountancy is affiliated to the Institute of Chartered Accountants of England and Wales.

Moorgate pitched features to the editors of these titles - features that would be written by Lloyds TSB's IFRS consultant Johann Kruger. Lloyds TSB also sponsored two events held by the Association of Corporate Treasurers - one specifically on IAS 39 and the other its annual conference. At each event, Lloyds TSB hosted seminars on IAS 39, and the audience was invited to vote on particular issues.

Measurement and Evaluation
The Treasurer published two articles, and Accountancy one. These were followed up with pieces in rival titles Accountancy Age and Global Treasury News. FX Week also ran an article, meaning the ‘derivatives peer-group audience' was reached.

The results of the conference votes formed the basis of a press release that won coverage in other specialist titles, such as Real Finance, Financial Director and CFO Europe.

Results
Lloyds TSB received emails from customers commenting positively on the articles. It was also contacted by Euromoney magazine, which reproduced an article in a ‘global risk' handbook. Meanwhile, 115 clients attended the annual conference, with 120 visiting the IAS 39 day.

Accountancy editor Chris Quick recalls: ‘Accountancy standards are a controversial issue as they can have a considerable impact on a company's accounts. This dealt with complicated concepts so we were happy to get an expert rather than a journalist to write it.

Plus, Lloyds TSB is not an accountancy, which is always a bonus.'

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