Wed, 24 Apr 2013 | BUSINESS SALE
The sale of over 600 branches of Lloyds Banking Group to the Co-op Group has fallen through.
Reports this morning (24 April) have confirmed that the deal is off, with the Co-op citing the ongoing economic downturn as the reason behind the decision. A statement from the Co-op's chief executive, Peter Marks, also cited problems with regulatory issues.
The sale of the branches was dubbed Project Verde. EU regulators demanded that the banking group put the branches up for sale as payment for the bail-out it received from the UK government during the financial crisis.
Mr Marks said: “Against the backdrop of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general, the Verde transaction would not currently deliver a suitable return for our members within a reasonable timeframe and with an acceptable level of risk.”
The branches will now be rebranded as TSB Bank over the next few months. They will be operated as a separate business within Lloyds before a sale is organised later in the year. It is thought likely that the branches will now be sold as a stand-alone bank through a stock market listing.
Lloyds has a deadline of November this year to complete the sale if it is to meet the competition rules set out by the European Commission. Co-op agreed to the takeover last year; its decision to back out now leaves Lloyds with little time to find an alternative solution and it could be forced to ask the Commission in Brussels to extend the deadline.
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