Lloyds TSB has announced that The Co-operative Bank is its preferred bidder after it succeeded in fending off competition from NBNK.
Lloyds is under pressure from the European Commission’s competition authorities to sell its branches. A bid tabled by the Co-operative is said to be in the region of £1.5bn.
As part of the restructuring process, Lloyds will part with 632 of its branches and combined figures of £36bn in deposits plus £47bn in mortgages and loans. This would include its Cheltenham & Gloucester branches and all its Lloyds TSB Scotland branches.
The move follows on from the Co-operative’s acquisition of Britannia in 2009 and will see the Co-operative emerge with almost 1000 branches and more than 11 million customers. Once the acquisition of the branches is completed, the Co-operative is set to become
Britain’s seventh-largest bank with a 6% stake in the number of high-street banks.
In a statement, Chief Executive Peter Marks announced that the deal would "significantly strengthen our position as a real challenger in relationship banking in the UK." He also stated that the deal was not guaranteed and that the Co-operative "would only proceed
if we could reach an agreement that was in the interests of our members and other stakeholders."
Should the parties reach an agreement, the deal is expected to be completed by the end of the first quarter in 2012.
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