Co-operative in frame to acquire Lloyds branches

19 December 2011 | By Natalie Thomas

Lloyds Banking Group has revealed it is in talks with The Co-operative Bank over the sale of its 630 retail branches.

Lloyds group was ordered to sell the branches by the European Commission in 2008 as part of Project Verde. The branches account for 19% of its £341bn total mortgage book and 5% of the whole mortgage market.

Tim Tookey, interim group chief executive and group finance director at Lloyds group, says: “We are pleased to be reporting progress with the Verde divestment which continues to move forward in line with expectations.I am confident we will complete the transaction by the end of November 2013, in line with the EC mandated timescale.”

Lloyds group also says it will continue to progress an initial public offering during this phase of the discussions.

Paul Mumford, senior fund manager at Cavendish Asset Management, says: “Co-operative Bank is a credible buyer and we can now hope that negotiations arrive at a decent price. That said, it is also pleasing to see Lloyds group press ahead with contingency plans for an IPO to provide value for shareholders should negotiations falter.”

Last week Lloyds group announced its chief executive Antonio Horta-Osorio will return to work on January 9 2012 following a leave of absence for stress-related illness.

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