JP Morgan and Citigroup are to provide a £15bn loan to Lloyds Banking Group as the two investment banks are appointed as joint advisers on the sale of 600 Lloyds branches.
It emerged yesterday that new chief executive Antonio Horta-Osorio was keen to secure the funding to accelerate the sale of the branch network, which includes 185 Lloyds TSB Scotland branches and the Intelligence Finance division.
The branches to be offloaded make up around 5 per cent of the UK personal current accounts market.
Lloyds announced last night that it had appointed JP Morgan and Citigroup as joint financial advisers on the sale.
Lloyds group chief executive Antonio Horta-Osorio (pictured) says: “We made the decision to accelerate the start of the sale process in order that we met the timescales agreed with the Government and EU. By doing this we also bring greater certainty and clarity for our colleagues and our customers.”
“There has already been considerable interest in the divestment business. Our advisers have significant mergers and acquisitions and relevant funding market experience. This will help to ensure a strong competitor enters the market over the next two and half years.”
The Financial Times has reported JP Morgan and Citigroup will provide a £15bn loan to accelerate the sale, bridging the shortfall between mortgages and customer deposits of between £20bn and £40bn.
The European Commission ordered Lloyds to sell the branches in July 2009 as part of the state bailout package agreed following the bank’s takeover of HBOS in September 2008. The deadline for the completed sale of the branches is November 2013.