Co-op to buy 632 Lloyds bank branches


Peter Marks: "We are focused on making sure that we are a great home for Lloyds customers"

Related Stories

The Co-operative Group has agreed terms to buy 632 branches from Lloyds Banking Group in a deal that could create a new force in UK High Street banking.

About 4.8 million Lloyds customers will be transferred to the Co-op, giving it about 7% of the current account market.

The Co-op will pay £350m upfront and up to an additional £400m based on the performance of the combined business.

The sale was demanded by European regulators after Lloyds was part-nationalised in 2009.

After buying HBOS at the height of the financial crisis in 2008, Lloyds then needed a government bailout, and is still 40%-owned by the taxpayer.

'Fair price'

The deal with the Co-op will take the Co-op's total branches to almost 1,000.

The price tag, of up to £750m, is much less than the £1.5bn that had originally been expected for the sale.

Start Quote

It is hard to think of any deal in which the seller has provided quite so much help to the buyer”

End Quote

"Those were the numbers that were speculated 12 months ago but during the last 12 months the business that we're buying has changed significantly, [and] we think we're paying a very fair price," Co-op chief executive Peter Marks told the BBC.

Under the deal, Lloyds is also providing £1.5bn of capital for the branches, meaning it faces a loss of about £750m on the sale.

BBC business editor Robert Peston said it looked like "an amazingly good deal" for the Co-op.

The sale, which is still subject to approval by the Financial Services Authority, is expected to be completed by the end of November 2013.

The Chancellor, George Osborne, welcomed the deal.

"This is another step towards creating a new banking system for Britain that gives real choice to customers and supports the economy," he said.

"The sale of hundreds of Lloyds branches to the Co-operative creates a new challenger bank and promotes mutuals. This follows the sale of Northern Rock to Virgin Money in January and represents another important step towards a more competitive banking sector."

'Bring back trust'

Lloyds group chief executive Antonio Horta-Osorio said: "In agreeing to move ahead with the Co-operative we provide greater certainty for our customers and for our shareholders.

"In addition to an upfront consideration, we will also get to share in the future financial performance of the combined banking business which will be an effective challenger with a strong customer focus."

Paul Lewis, Moneybox, explains how the Co-op deal affects Lloyds customers

Lloyds said that the branches being sold would be rebranded to TSB next summer and would transfer to the Co-op under that brand.

They include all Cheltenham & Gloucester branches, and all Lloyds TSB branches in Scotland.

Co-op chief Peter Marks said the deal was good news for the industry.

"What the banking industry needs is to bring back trust. We've seen over the last few years, and particularly over the last few weeks, trust has deteriorated in big banks," he said.

"This represents a major change to the face of retail banking in the UK."

He added that the Co-op, which is owned by its members, was a very different bank to the main High Street banks.


More on This Story

Related Stories

From other news sites

* May require registration or subscription

The BBC is not responsible for the content of external Internet sites


This entry is now closed for comments

Jump to comments pagination
  • rate this

    Comment number 260.

    If people are so fed up with the mainstream banks why don’t they just move anyway? If they just whinge and do nothing they get the banks they deserve. Mass customer desertion would be a huge force for change and is supposed to be how markets work.

  • rate this

    Comment number 259.

    As I just said (and it seems to have disappeared): lucky Lloyds customers! The co-op has ethics!

  • rate this

    Comment number 258.

    Folks, don't panic, it still has to be approved by the FSA, even then it will be towards the end of 2013 before it happens. Lots of time to sort out which bank you want to be with. Want to stay with LTSB, fine just go in to yr branch, get yr account transfered to a branch that's not being sold off. Happy to go to the CO-OP do the opposite. It hasn't happened yet & isn't going to happen overnight!

  • rate this

    Comment number 257.

    [1] How do we know a bank's not involved in fixing Libor and such?

    Co-op have nothing to do with LIBOR rate setting - that's for the big boys !
    "Fixing" LIBOR is a bit of a misnomer anyway as the overall LIBOR rate is an "trimmed arithmetic mean" a bank can alter it's own rate but this will have almost no effect on the overall rate...

  • rate this

    Comment number 256.

    This strikes me as a crazy deal. For around £750m the Coop will be handed nearly 700 branches AND capital of £1.5 billion. Just where in the small print does it state this is a good deal for taxpayers? I will be moving my money out of Lloyds you can be sure. We should have told the European regulators to run and jump. British taxpayers will give them this a keep the toxic debt. Great!

  • rate this

    Comment number 255.

    Claiming the 'ethical' highground? Beware lest you trip up !"

    I guess no one is perfect, or fits each individual's idea of ethical varies, but it isn't hard to find unethical - HSBC and money laundering, Barclays and apparent fraud etc etc. Makes the Co-op look very good by comparison!

  • rate this

    Comment number 254.

    I do not believe the Co-op to be as ethical as it pretends to be and I for one would not like my mortgage or bank account transferred to them so people should be given the chance to stay with Lloyds and I do not like the idea of any retailer owning a bank Banks for money supermarkets for groceries

  • rate this

    Comment number 253.

    ahhh! wheres me divvi number gone

  • rate this

    Comment number 252.

    It's one thing for a bank to claim it's ethical and does the right thing, it's another for it to be seen to be ethical and to be doing the right thing[1]. Transparency is needed for that - and then we won't need to trust their word. Until we get that nothing's really changed.

    [1] How do we know a bank's not involved in fixing Libor and such?
    The system needs to be transparent, not just banks.

  • rate this

    Comment number 251.

    @249 - according to Paul Lewis in the clip above, as part of the deal Lloyds TSB isn't allowed to contact any of its customers to advise them about the impact of the sale!

  • rate this

    Comment number 250.

    246.Big John the Red
    flogging mortgages people couldn’t afford and so on.

    The interesting thing about this however, was that the initial selling of NINJA (No Income No Job) mortgages was done at the retail level - by dodgy mortgage brokers. Only once the mortgages were sold were they packaged up as basket (case ?) derivatives and traded amongst the investment banks.

  • rate this

    Comment number 249.

    George Osborne goes on about choice and I agree we need more choice. But it is for customers to choose who they bank with. This sale of customers is like being passed around like a tray of biscuits. Some may choose to go with the Co-op, some may want to stay with Lloyds, and some may go elsewhere entirely. But were they asked about it all?

  • rate this

    Comment number 248.

    Re 53. I thank you missed the point. You WANT a bank manager who has worked in the business for more than 15 years. Anyone who has been around that long will remember 'old style' personal banking, where customers were known personally, staff were trained properly and not moved. You will be lucky to find a bank manager with that much experince. Most were fired because they missed a sales target.

  • rate this

    Comment number 247.

    I wonder if many people will be put off moving to an organisation that is affiliated to the Labour Party?? I am neutral on the subject, but just a thought.

  • rate this

    Comment number 246.

    Cheating on the LIBOR rate and stitching SMEs up with loans with hidden and unfair charges are the latest shocks following the destruction of banks’ liquidity through fraudulent derivatives, flogging mortgages people couldn’t afford and so on.

    Changes in banking ‘culture’ are definitely required and let’s hope the Coop leads the way.

  • rate this

    Comment number 245.

    " payer who bailed Lloyds Tsb..a Tory thing to sell tax payers assets it cheap as possible"

    Then have a word with the EU regulators who are ordering this to go ahead, & with one G Brown who along with his good mate Sir Victor Blank hobbled Lloyds with HBoS, & thereby penury, in the first place. Not everything's the fault of evil Tories even if you'd love it to be.

  • rate this

    Comment number 244.

    From your incorrect statements you clearly show a complete ignorance of how investment banks work. Investment banks aren't interested in the man on the street - that's the role of retail banks.
    You may not like them but they do make (and lose) lots of money by providing services to institutional clients.

  • rate this

    Comment number 243.

    The Co-Op and ethics...Dont make me laugh.. ask anyone who`s had the misfortune to use their vastly overpriced Funeral Services and maybe watched the recent documentary on how they treat your loved ones. This `Ethical` Bank myth is merely another branch of the them. Best avoided

  • rate this

    Comment number 242.

    Re 238. The correct term is SRI (Socially responsible Investments) not 'ethical'. This includes Social Policies (Bought any cheap trainers/T shirts ?), War/Weapons/Arms (Rolls Royce Engines ?), Environmental (Filled up at BP, been on hols to Ibiza ? ), Agriculture (Cheap Milk ?), Animal Welfare (L-oreal, Body Shop ?)Tobacco/Alcohol. Claiming the 'ethical' highground? Beware lest you trip up !

  • rate this

    Comment number 241.

    As long as it continues to offer great deals on sausages and wine I'm happy.


Page 6 of 18


More Business stories



  • Krak des ChevaliersSitting targets

    How ancient treasures in Syria are being bombed to pieces

  • Mesut Ozil's tattoo reads "Only God can judge me"Ink explained

    Nine World Cup players' tattoos decoded, and one who refuses

  • Google sweetsName game

    Would Google have made it as BackRub?

  • Putting a coin in supermarket trolleyMinor annoyance

    Why are Morrisons getting rid of coin-locks on trolleys?

  • A graphic on the Human Events Facebook page comparing Jackie Kennedy and Michelle Obama.First ladies

    Why is Michelle Obama being compared to Jackie Kennedy?

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.