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Lloyds branch sale to Co-op collapses

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The Co-operative Group has backed out of a deal to buy around 630 UK branches of Lloyds Banking Group, blaming the poor growth outlook and increasing regulatory requirements.

The branch sale, known as Project Verde, is a requirement imposed on Lloyds by the European Commission as part of the bank receiving state aid in 2008.

Lloyds says it will now look to dispose of the branches through an initial public offering, subject to regulatory and European Commission approval.

The branches will rebrand as TSB Bank in the summer, and will operate as a separate business with Lloyds.
 
Lloyds chief executive Antonio Horta-Osorio says: “We are disappointed The Co-operative Group is unable to complete this transaction. However, we are well advanced in our plans to bring the Verde business to the UK high street during the summer through the TSB Bank, and will now proceed with the option to IPO the business, subject to the necessary approvals.
 
“The TSB Bank will be an attractive retail and commercial bank that will have around 630 branches across the UK, a strong management team and will be a real challenger on the high street.”
 
The Co-op Group chief executive Peter Marks says: “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.
 
“Having worked closely and constructively with Lloyds we are naturally disappointed to have reached this conclusion.
 
“However, against the backdrop of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general, the Verde transaction would not currently deliver a suitable return for our members within a reasonable timeframe and with an acceptable level of risk.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Stephen Rowland 24th April 2013 at 9:24 am

    TRANSLATION – No one can make a reasonable profit with regulation& the economy as it is & we don’t want to be shafted on price like other institutions in the past!

    SIMPL;ES!!!

  2. Yet another consequence of RDR
    When will the ‘thicko’ in number 11 wake up and smell the coffee. Co-Op are saying that with RDR they cannot justify the purchase so now RDR is costing the taxpayer
    Why is the architect allowed to keep his job at Barclay?
    Was he in negotiations with LLoyds and Co-Op knowing he was going to join a competitor?

  3. If the proposal is as attractive as Antonio believes perhaps he could resign his current position to take charge of the 630 branches in question.

  4. this looks like that peter marks has another failure to his name. bottom of the class with no marks

    peter marks runs a defunct organisation that has become rudderless in the last 18 months.

    he has incurred the wrath of his staff by making redundant all his financial advisers but still raking his over inflated pay package.

    the members are ordinary working class folk who dont know how to remove him , the head less chicken will become another has been like the wonders of fred the shred and ex sir hornby

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