Last week, LBG reversed its decision to close 164 C&G branches in November to focus on building its intermediary business. The firm also stated that the 928 jobs at C&G which would have been affected, would remain in place while it contemplated its options.
Ray Boulger, senior technical manager at John Charcol, said the unusual move to overturn the decision was a surprise, and he warned that intermediaries could lose out as C&G would not focus solely on them.
He explained: “It was an advantage to have an intermediary-only brand within such a big bank and it seems this will now be changed. However, Lloyds has not elaborated so we will wait and see. There may not be any massive differences to C&G or on the other hand, Lloyds may sell the brand.”
LBG’s refusal to confirm the reason behind its change of heart fuelled speculation that the European Commission (EC) demanded the group sell some of its assets to offset some of the competitive advantages resulting from Government aid.
Danny Clarke, analyst at Shore Capital, speculated that LBG was keeping the branches open to ensure a sale and to appease the EC.
He commented: “The EC may want Lloyds to sell C&G in exchange for the aid received. That would suit Lloyds, as it wants to raise capital following its £4bn half-year loss. Lloyds needs to raise money, and a sale seems the best way to achieve this.”
Rob MacGregor, national officer at trade union Unite, said it was satisfied that LBG had finally acknowledged the decision to close the C&G branch network was “ill-considered”.
He explained: “This news will bring some relief to the 900 staff who work in C&G branches. The announcement comes with no warning and will make the workforce wonder whether their bosses have any long-term strategy for the future of the bank. We find it unacceptable that LBG changes its mind so readily.”
