Co-op preferred bidder for Lloyds branches
The Co-operative Bank has been named as the preferred bidder for the 632 branches which Lloyds Banking Group has to sell to meet European competition rules. The taxpayer-backed bank will now enter into exclusive discussions with the Manchester-based Co-op, which triumphed over acquisitions vehicle NBNK. The sale announcement came as Lloyds said, boss Antonio Horta-Osorio would return to his job on January 9 after a period off work with fatigue. Lloyds, had considered floating the branches separately, but today said its preferred option was a direct sale.
The Co-op has more than 1.5m current account holders and has shown strong growth in recent years. The fact that Co-op already ran a financial services business also gave it an advantage in the bidding process. Government ministers had been seeking more competition amongst the high street banks and the Co-op bid was significant in that the acquisition of the Lloyds assets would bring their portfolio to around 1,000 branches and increase their UK market share to around six per cent.
There is hope that the disposal can be completed by late 2013 and any transaction would be subject to regulatory approval, but both Lloyds and the Co-op also made it clear that there were no guarantees a deal would be struck. Lloyds will continue to look into a stock market flotation if the negotiations falter.