Customers were reporting today that they were unable to withdraw money from cash machines or pay by card.
Lloyds customers have flooded Twitter to complain that they are unable to get money out of cash machines and that their debit cards were being declined. Others claimed they were unable to access up-to-date details of their bank account, although the bank later said that this "intermittent problem" had been resolved.
The problems affected both the Lloyds TSB brand and those with Halifax and Bank of Scotland accounts, all of which are part of Lloyds Banking Group.
The bank, which has 22 million current account customers, is the largest retail bank in the UK. It is now part owned by the taxpayer after it had to be bailed out by the Government during the financial crisis in 2008 and 2009.
One twitter user, Steve J, tweeted: “Cash machines don’t work, debit card refused (so no cashback). What a great time for computer problems. Thanks.”
Meanwhile, Brendan Clark wrote: “Lloyds TSB has gone down again. Completely unacceptable. New Year Resolution. Switch to a better bank.”
A spokesman for Lloyds Banking Group said: "For a short period earlier this afternoon some customers experienced intermittent problems with certain functionalities of viewing their current account balances and payment transactions. We were able to quickly identify the root cause and all services were fully restored within the hour."
The bank apologised for any inconvenience caused to customers.
This latest banking fiasco wraps up what has proved to be a disasterous year for the UK's biggest banks.
In June Royal Bank of Scotland (RBS (LSE: RBS.L - news) ) and its NatWest subsidiary suffered a catastrophic banking failure which left millions without access to their money for days. NatWest branches were forced to open on a Sunday for the first time in history to issue emergency cash advances to those who were struggling to pay essential bills.
When a major bank has computer problems it can have a knock-on effect on customers of other banks who use the same systems to transfer money payments. Some customers of Co-operative Bank and Smile were also reporting problems accessing their money as a result of this latest technical glitch at Lloyds.
After the NatWest computer problems the bank promised to pay compensation to those who were hit with unexpected overdraft charges because of late payments.
Aside from technical problems, banks such as Barclays (LSE: BARC.L - news) and HSBC (LSE: HSBA.L - news) have been hit with record fines from the regulators. Barclays was fined for its attempts to manipulate a key interest rate, known as Libor, while HSBC was fined for poor money laundering controls in the US.