You are here: Home - News -

Lloyds’ branch sale to Co-op collapses

by:
  • 24/04/2013
  • 0
Lloyds’ branch sale to Co-op collapses
The Co-op has pulled out of its planned purchase of Lloyds Banking Group's branch sale in what is thought to be a bitter blow to the Treasury.

The Co-op blamed the continued economic downturn and tougher regulatory environment imposed on banks.

Lloyds, the biggest mortgage lending group in the UK, said it will now seek to sell the branches as a stand-alone bank through a stock market listing.

Lloyds’ chief executive Antonio Horta-Osorio said: “We are disappointed that the Co-operative Group is unable to complete this transaction.”

The sale, known as Project Verde, was demanded by European regulators as the price for being bailed out by the UK government during the financial crisis.

The Lloyds statement said: “The Co-operative Group’s board has decided that they can no longer proceed with a purchase of the Verde business given their view of the impact of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general.”

During the summer the branches will be rebranded as TSB Bank, and the group will operate as a separate business within Lloyds ahead of a sale.

The Co-op’s chief executive, Peter Marks, said: “After detailed and thorough consideration of all aspects of the Verde transaction, we have decided, at this time, that it is not in the best interests of our members to proceed with the transaction.”

Robert Peston was forced to reassure Co-op’s banking customers this morning in his blog that the group would not leave account holders high and dry, but planned an orderly retreat from banking.

Lloyds, which is 39%-owned by the government, had a deadline of November 2013 to complete the sale in order to meet European Commission competition rules.

The new bank called TSB Bank is still expected to launch in the second half of 2014 with the potential transfer of 4.6m customers, including 3.5m in England.

According to the BBC, the aborted takeover would have created Britain’s seventh-biggest bank with about 5% of personal current accounts and the mortgage market and about 10% of the branch network.

 

There are 0 Comment(s)

You may also be interested in