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Lord Levene accuses Lloyds of ‘bad faith’ over Co-op branch sale

Former NBNK chairman Lord Peter Levene has accused Lloyds Banking Group of “bad faith” in its handling of the sale of its branches.

The Co-operative Bank beat NBNK in the bidding process for 632 Lloyds Banking Group branches in 2011. But the deal collapsed in April last year after the Co-op Bank revealed a £1.5bn capital black hole and turned to bondholders to fill the gap.

Co-op Bank offered £350m upfront with a further £400m over 15 years dependent on the performance of the business. NBNK offered up to £730m up front.

Speaking to the Treasury select committee inquiry into the sale today, Lord Levene said the bidding process was unfair and NBNK investors, who have put up £30m, have lost 60 per cent on paper. He said he personally lost £60,000 from a £100,000 investment.

Lord Levene, who is a former Lord Mayor of London and chairman of Lloyd’s of London, accused Lloyds of bowing to Treasury pressure to boost mutuals rather than choosing the best bid.

He said: “I believe Lloyds was swayed by political considerations. Its assessment of our bid was not done fairly.”

He agreed with TSC chairman Andrew Tyrie’s assertion that Lloyds had acted in “bad faith”. He said he would not be launching any legal action, although he suggested other investors could have a case. He also accused Lloyds of giving “disingenuous” evidence to MPs over the bid.

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