Lloyds TSB has scrapped its venture into the coveted high-net worth wealth management business, indicating how tough that highly competitive business has become, according to a report in the Times of London.

Six months ago the bank launched a division called Create, with plans to attract 250,000 high net worth clients, those with at least a minimum annual income of £60,000, or £100,000 of liquid investments. However, it only managed to win a few hundred customers to the service.

The bank said that the fall in stock markets and fading investor confidence had forced the closure of the division. A Lloyds TSB spokeswoman said, “The whole strategy for Create was based on equity investment, and we are going to have to rethink that.”

Other new businesses targeting the same sorts of investors could also be forced to change strategy after continued falls in stock markets, says the Times. It notes that Merrill Lynch and HSBC scaled back their joint venture, which has just 7,000 customers in the UK with £170 million under management.

It also points out that Abbey National’s Inscape, launched 18 months ago and targeted at those with more than £50,000 to invest, has attracted just 6,000 customers. The bank had aimed to attract 100,000 customers to the service by the end of next year.

Robin Down, an analyst at Morgan Stanley, said that Lloyds TSB’s decision to curtail two of its newest businesses was “an embarrassment”. “Create was based on the stock market bubble of 2000. It is far more expensive to try and poach existing (high-net-worth) clients as most will already have a financial adviser.”