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Brokers urge Co-op to adopt C&G’s underwriting approach

Brokers are hoping the Co-operative Bank will adopt the flexible underwriting approach that its subsidiary Cheltenham & Gloucester was well known for after Co-op sealed a deal to buy 632 Lloyds branches.

This week, the Co-operative Group announced it will pay an initial £350m for Lloyds’ Project Verde branches and up to £400m based on the performance of Co-op’s combined banking business until 2027. C

Co-op will take over the Lloyds TSB and C&G brands by November 2013. Lloyds will rebrand all 632 branches as TSB in the third quarter of 2013.

Brokers want Co-op to adopt the flexible underwriting strategy C&G used before Lloyds moved to a more homogenised approach across its brands.

Lentune Mortgage Consultancy director Stuart Gregory says: “One of the key strengths of C&G’s lending was it was common sense lending, it was individually underwritten. If Co-op moved to that type of approach it could make great strides in the market and borrowers would benefit.”

David Hollingworth, London & Country associate director of communications, says: “C&G used to have a flexible approach to underwriting and, if you go far enough back, individual branches used to have mandates to approve cases, which was very good.”

However, some brokers believe Co-op could loosen its ties with the broker market because of a desire to get customers into its branches. Co-op has an intermediary brand, Platform, but it does most of its lending in the buy-to-let sector, although it has a small selection of mainstream and near-prime products.

Coreco director Andrew Montlake says: “I think Co-op is less likely to use brokers now that it has a big branch network to service, which is a shame.”

A Co-op spokesman says: “It is too early to say how the deal will impact on our mortgage lending.”


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. I am a current Lloyds customer at a branch that is being sold off. As I no longer live near that branch I want to move my account to another branch which is nearer to where I live. The closest Coop branch is over 7 miles away. I have been told by the bank I cannot move my account. I was given the reason that they could not have customers leaving branches that were being sold off because this would have a negative impact on the value of the branch whilst the deal is being done. This is an outrage.

  2. If C&Gwith TSB is now taken over by Co-op n then from next November would be there still under present FSA only 85K protection on total investment per customer i wonder?Why noone mention that now or customes stop to invest there more in order not to loose from November.

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