Lloyds confirms Virgin Money and NBNK interested in branch sell off

Antonio Horta-Osorio, chief executive of Lloyds Banking Group, has confirmed that Virgin Money and NBNK Investments plc are interested in purchasing 600 of Lloyds group’s branches.

Speaking at a Treasury Select Committee meeting today, Horta-Osorio said reports that Lloyds group has already send out a brochure to potential investors for the sale of 600 branches are true.

This is despite the Independent Commission on Banking’s recommendation that Lloyds group sell off significantly more branches than the 600 initially agreed under European legislation.

Horta-Osorio says potential bidders, which include Virgin Money and NBNK, are in agreement with Lloyds group that the sell off of 600 branches would create a credible competitor in the banking industry.

When asked by the Treasury Select Committee why the ICB report said 600 branches would not create a viable competitor, Horta-Osorio said it may not have taken into account the fact that the new lender’s balance sheet would improve over time.

The committee also asked Horta-Osorio whether the decision to put out a brochure now leaves the ICB with a fait accompli, to which he replied no.

He says: “It is necessary to meet the timetable of the sale according to European law and to establish the interest of potential buyers.”

Horta-Osorio adds that a teaser brochure has been sent out already, while a full memorandum will be sent out this week and he aims to have serious indicative offers by the end of July.