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Co-op buys 632 Lloyds branches in bank shake-up

The sale means the Co-op will have nearly 1,000 branches and 11 million customers, making it a real challenger on the high street.

 
Co-op buys 632 Lloyds branches in bank shake-up

Lloyds has agreed to sell 632 of its branches to the Co-operative group for £750 million.

Co-op will pay £350 million upfront and a further £400 million depending on the bank’s performance between now and 2027.

The move means Co-op bank, which is owned by its members, will have nearly 1,000 branches, making it a real challenger on the high street. It will acquire 4.8 million Lloyds customers, including some Cheltenham and Gloucester customers, bringing its total customer base to some 11 million – 10% of today’s market.

The deal is expected to be completed before the end of November 2013, but is subject to the approval by the Financial Services Authority (FSA), HM Treasury and the European Commission.

The branches will be rebranded as TSB next summer, and once the sale is completed the changeover to the Co-op systems will begin in 2015.

Lloyds (LLOY.L) was ordered to shed 632 of its branches by the European Commission after the group bought HBOS during the financial crisis and subsequently needed a bailout from the government in 2008. The bank remains 40% owned by the taxpayer. 

Dubbed project Verde, Lloyds had originally hoped to get up to £1.5 billion for the sale of its branches, but the valuation has suffered as a result of the economic slowdown.

Peter Marks, chief executive of the Co-operative Group, said the deal would deliver ‘the biggest shake-up in high street banking in a generation’ and is a ‘great deal’ for customers, taxpayers and UK banking generally.

‘Despite the crisis in the financial sector, our bank has continued to go from strength to strength, coming through the financial crisis in great shape and maintaining our ethical and socially responsible credentials,’ he said, criticising the mess other banks had got into with their investment banking business model.

‘The acquisition of the Verde business would significantly advance our growth strategy, creating a combined bank approaching 7% market share of UK personal current account customers.’

Co-op added that on the back of the Barclays Libor scandal and RBS IT disaster it has already seen a 54% increase in the number of people requesting to switch to their current account in the last four weeks.

Marks, meanwhile, said that because the Co-operative Group is owned by its members it will continue to maintain its ethical selling point.

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15 comments so far. Why not have your say?

Jn

Jul 19, 2012 at 13:01

When will LLoyds tell its customers who would go to the Co-op. What are the options that those customers have.

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Alan Tonks

Jul 19, 2012 at 13:39

Maintaining our ethical and socially responsible credentials” I love those words it has a real ring of today about it.

What it really means is can we get more gullible idiots to put their money with us, rather than those evil banks.

I don’t think I will ever see a really ethical or a so- called socially responsible company, it is just words and meaningless.

It is really meant for people who don’t think things out, are willing to accept anything that a company says without question.

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mikeran

Jul 19, 2012 at 14:16

we seem to have accepted that the EU had the right to order this sale and to include in it Lloyds customers. Not only that but to make it difficult for those customers to exercise an opt out . Almost on a principle I would transfer out, to another Bank. I hear you saying but to which Bank, -- good question. Well perhaps back to LLoyds, they have been working hard to clear up the mess some of their Political masters left them.

I have been with my current UK bank for a very long time. And although it ,like most UK banks has come under criticism lately. I cannot overall complain of how it has treated me.

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Anonymous 1 needed this 'off the record'

Jul 19, 2012 at 14:39

I have no wish to be 'acquired' thank you very much. I'm more than happy with the excellent staff at my local Lloyds branch.

If it's going to be 'great deal for customers' will Co-op pay me more than 3% interest on my current accounts?

And as for it being a great deal for tax payers, how exactly?

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Blobby

Jul 19, 2012 at 14:44

It will probably be a great deal in much the same way Abbey National told me I was getting years ago when they closed my local branch, meaning that I then had a two hour round trip to the city just to deposit/withdraw cash.

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Neil Telford.

Jul 19, 2012 at 14:55

Instead of pumping money into the system, why doesn't the government set up a new bank to shake things up.

Does anybody remember Girobank ? It was a state-owned bank, but introduced lots of innovations like electronic money transfers and forced the other banks to up their game.

It was a crime that it was privatized. Nobody has a problem with National Savings, so what is the problem with a state-backed bank..... The big monolithic private banks are obviouslly doing such a fine job....

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Blobby

Jul 19, 2012 at 15:12

From BBC news Q&A :

Will my branch sort code or account number be changed?

No. Lloyds TSB says there will be no change to these, either in the run-up to the sale or after it.

A spokesman for the Co-op was not quite so emphatic. "It's too early to say. That will be decided between now and when the legally binding agreement is signed later this year," he said.

I'm glad that's all clear then.........

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Dakky via mobile

Jul 19, 2012 at 15:16

Mr Blobby, you can deposit and withdraw cash for some banks in your nearest post office. If you were moved to A&L/Santander from Abbey National as most people were, you would be able to do this. Or is your nearest post office an hour away from where you live?

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Blobby

Jul 19, 2012 at 16:11

Dakky, I did say 'years ago' which was the 1980/90s and the Post Office weren't so accommodating then.

But it wasn't a matter of being transferred anywhere, Abbey just shut the branch. As it happened, N&P took it over so we switched to them. Then Abbey merged with N&P so we were paid a nice little bounty to go with the earlier acquired free Abbey shares which we sold during their peak years (£12 to £14).

So, on reflection I guess it was actually a good deal, but more through the laws of unintended consequences plus a bit of fortunate timing.

And er, since you ask, the nearest Post Office is now about 12000 miles away.

:-)

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Dakky via mobile

Jul 19, 2012 at 16:42

Thanks for the explanation Blobby; I can see you are a man of good taste and discernment having left these shores for somewhere less annoying!

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Keith Hilton

Jul 19, 2012 at 17:11

If they transfer my account to the Co-op I'll be closing it - Simples! ;-)

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robert holme

Jul 19, 2012 at 18:35

Is it not the ethical Co-op presently trying to destroy the British Dairy Industry buy paying under cost for milk

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Mahendra Patel

Jul 19, 2012 at 19:05

When coop took over Brittania Building Society, I was forced to transfer my ISA, elsewhere because of comparatively low interest rates offered on the accounts.

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DArrrrGeee via mobile

Jul 19, 2012 at 22:41

Forget lloyds and coop. HSBC is the bank to be with.

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Rose G

Jul 20, 2012 at 11:49

The EU which has been so successful at sorting out the problems with the EU - Not - that we should rush to do everything they ask of us - what a lot of spineless barstewards we have to dictate to us.

We are so quick to ciriticise and take foreign leaders to task, to show case their trials at the international tribunals but succumb meakly to whatever Dave and George inflict on us. As for Blair, he is now earning his bucks at JP Morgan - wonder how much they made from investments in the wars in Iraq & Afghanistan?

If we were to actually see the wood for the trees, these guys in westminster are equally as mad as Mugabe.

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