Sale of Lloyds’ branches collapses
The planned sale of over 600 Lloyds Banking Group branches has fallen through. The Co-operative Group had planned to buy all 632 branches across the UK. The Co-op blamed the tough economic downturn and tougher regulatory environment imposed on banks.
The banking group now says the branches will be sold as a stand-alone bank through a stock market listing.
The purchase of the branches by the Co-op was intended to create more competition within the main high street banks. Lloyds’ chief executive Antonio Horta-Osorio said: “We are disappointed that the Co-operative Group is unable to complete this transaction.”
The sale of Lloyds’ branches, known as Project Verde, was demanded by European regulators as the price for being bailed out by the UK government during the financial crisis.
Lloyds is currently 39% owned by the government, and must find a buyer before November 2013.
The Co-ops chief executive Peter Marks said: “After detailed and thorough consideration of all aspects of the Verde transaction, we have decided, at this time, that it is not in the best interests of our members to proceed with the transaction.
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.”