Co-operative Group, the parent company of The Co-operative Bank, is to submit a second round bid for the Lloyds Banking Group branches on sale.
In September, Co-operative Financial Services chairman Paul Flowers claimed the mutual was the only “credible” bidder for the Lloyds branches because of its already substantial branch network.
The European Commission is forcing Lloyds to sell 632 branches and 5 per cent of the banking market by November 31, 2013 as part of its state aid agreement.
Lloyds would not confirm who has submitted first round bids but it is thought American investments firm Sun Capital and NBNK, a shell vehicle set up by former Lloyd’s of London chairman Lord Levene, have submitted bids.
Virgin Money was also thought to be in the running for he branches but decided to concentrate its efforts on buying Northern Rock instead.
Last month, it emerged Lloyds is considering floating the branches as it is struggling to attract a strong enough bid for the portfolio.