Lloyds gets £15bn backing for branch sale
JP Morgan and Citigroup are providing a £15bn loan to Lloyds Banking Group after being appointed as joint advisers on the sale of 600 Lloyds branches.
New chief executive Antonio Horta-Osorio sought the additional funding to speed up the sale of the branch network, which includes 185 Lloyds TSB Scotland branches and the Intelligence Finance division.
In July 2009, the European Commission ordered Lloyds to sell the branches as part of the state bailout package following the bank’s takeover of HBOS in September 2008.
The deadline for sale of the branches is November 2013.
The loan will bridge the shortfall between mortgages and customer deposits at the time the branches are sold. The branches to be offloaded make up around 5 per cent of the UK personal current accounts market.
One potential bidder is Clydesdale Bank and Yorkshire Bank parent company National Australia Group. Other potential bidders include Virgin Money and NBNK, an investment vehicle set up by former Treasury select committee chairman John McFall and Lloyd’s of London chairman Lord Levene.
Lloyds group chief executive Antonio Horta-Osorio says: “We made the decision to accelerate the start of the sale process to meet the timescales agreed with the Government and the EU.”