Lloyds Agrees Sale Of 632 Branches To Co-op

Published in Company Comment on 19 July 2012

4.8 million customers' accounts will be transferred under the terms.

Lloyds Banking Group (LSE: LLOY) has agreed heads of terms with the Co-operative Group for the sale of 632 Lloyds TSB and Cheltenham and Gloucester branches.

The mandated divestment, known as Verde, was enforced by European regulators following Lloyds' acquisition of HBOS in 2008, amid the depths of the financial crisis. The price is thought to be significantly lower than the £1.5bn bid by NBNK last year, with the Co-operative paying £350m upfront, with an additional £400m based on performances.

Lloyds will now seek formal approval for the terms of the divestment with the relevant governmental and regulatory bodies.

Combined with the Co-operative's existing network, the divestment -- estimated to be completed by the end of November 2013 -- will lead to an approximate 10% of the UK's market share, with around 1,000 branches across the country. It will also gain from Lloyds an extra 4.8m customers -- including 3.1m personal current account customers --  giving the combined business almost 7% of the personal current account market.

The sale also includes a balance sheet of £24 billion with fully 'matched' assets and liabilities, as well as the TSB and Cheltenham & Gloucester brands.

Lloyds group chief executive António Horta-Osório commented: "We believe the Co-operative will be a good owner for our business, customers and colleagues, and the combined banking business will be a significant competitor on the high street with nearly 10 per cent of today's UK branch network. In agreeing to move ahead with the Co-operative we provide greater certainty for our customers and for our shareholders."

There's no escaping it -- banks have been hitting the headlines recently, for right reasons and wrong, but what sectors should you invest in today to help you sleep easy at night? "Top Sectors Of 2012" is the Motley Fool's latest free guide to help you pinpoint those profitable areas -- just click here to have it delivered straight to your inbox.

More investing opportunities from The Motley Fool:

> Sam does not own any of the shares mentioned above.

Share & subscribe

Comments

The opinions expressed here are those of the individual writers and are not representative of The Motley Fool. If you spot any comments that are unsuitable hit the flag to alert our moderators.

adcmelb 21 Jul 2012 , 11:48pm

The sale of these branches is at a substantial discount to what RBS achieved for the number of branches it was forced to sell off a few years ago - and as usual the so called experts said RBS should have held on to them and "get a better price in the future" well thats exactly what Lloyds did and wheres the better price.

Join the conversation

Please take note - some tags have changed.

Line breaks are converted automatically.

You may use the following tags in your post: [b]bolded text[/b], [i]italicised text[/i]. All other tags will be removed from your post.

If you want to add a link, please ensure you type it as http://www.fool.co.uk as opposed to www.fool.co.uk.

Hello stranger

To add your own comment, please login.

Not yet registered? Register now.