Lloyds branch sale falls through as Co-op walks away

Project Verde, the name given to the planned sale of 630 Lloyds branches to the Co-Operative, is to seek a stock market flotation after the latter walked away from the deal.

Project Verde, the name given to the planned sale of 630 Lloyds branches to the Co-Operative, is to seek a stock market flotation after the latter walked away from the deal.

Lloyds announced on Wednesday morning that despite the commitment of both parties to the transaction, the Co-op board has decided that they could no longer go through with the purchase of the Verde business.

The Co-op said the reason behind the decision was ""the impact of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general".

Project Verde is a disposal mandated by the European Commission (EC) following Lloyds' bailout in the financial crisis. The bank is still 39%-owned by the government and has until the end of the year to offload the branches.

The plan now for Lloyds is to go ahead with its 'Plan B' to create Verde as a stand-alone High Street bank called TSB Bank, divesting the business through an initial public offering (IPO) "in order to ensure best value for our shareholders and certainty for our customers and colleagues".

Chief Executive Officer Antnio Horta-Osrio said that while he was "disappointed" with the Co-op's decision not to go ahead with the deal, the new TSB Bank will be an "attractive retail and commercial bank [...] and will be a real challenger on the High Street".

While no timing has been given for the IPO, given that it will probably be subject to regulatory and EC approval, the company said that there will be no direct impact to customers as a result of the announcement.

Lloyds said: "Customers don't need to do anything and can carry on banking in the same way as they do now, accessing their accounts as usual via the branch, telephone and online banking.

"The group is committed to ensuring that the transfer to the TSB Bank is as smooth as possible for customers and will seek to minimise any disruption during this process."

Recommended

Share tips of the week – 22 October
Share tips

Share tips of the week – 22 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
22 Oct 2021
Three dividend stocks from the dynamic Asia/Pacific region
Share tips

Three dividend stocks from the dynamic Asia/Pacific region

Professional investor Sat Duhra of the Henderson Far East Income investment trust highlights three of his favourite stocks.
18 Oct 2021
Share tips of the week – 15 October
Share tips

Share tips of the week – 15 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
15 Oct 2021
Trading: stash the family cash in this cheap wealth management firm
Trading

Trading: stash the family cash in this cheap wealth management firm

Wealth management is a growth market. Rathbone Brothers should be a prime beneficiary – and looks cheap. Matthew Partridge explains the best way to pl…
12 Oct 2021

Most Popular

How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021
The after effects of the gas-price shock
Economy

The after effects of the gas-price shock

In the wake of the recent spike in the natural gas price, we can expect slower growth, an industrial recession – and a newly assertive Russia, says Ma…
17 Oct 2021