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Co-op hails bank deal 'shake-up'
The Co-operative Group has hailed its deal to buy 632 Lloyds Banking Group branches for up to £750 million as "the biggest shake-up in high street banking for a generation".
Lloyds will sell 632 branches to the Co-operative in a deal hoped to be completed by the end of November 2013
The Co-operative Group has hailed its deal to buy 632 Lloyds Banking Group branches for up to £750 million as "the biggest shake-up in high street banking for a generation".
The group said it will become a "new challenger" in British banking after announcing the long-awaited agreement, which will triple the size of its banking arm to nearly 1,000 branches and increase its share of UK branches to around 10%.
It is seen as a cut price deal for the Co-op, with the group agreeing to pay Lloyds - which is 40% owned by the Government - £350 million upfront and a potential further £400 million by 2027. However, the price tag is far short of the £1.5 billion first mooted.
Part-nationalised Lloyds admitted it would suffer a loss on the sale, although it said this would be offset by a fall in the amount of capital it has to hold on its balance sheet.
The Treasury welcomed the announcement, which it said formed part of a raft of measures to reform the banking system and improve competition.
The deal will transform the Co-op into a major player in British banking, bringing around 4.8 million customers to the mutual, meaning the combined business will see its share of the current account market soar from around 2% to nearly 7%. Five years ago, the Co-op had just 90 banking branches.
Chancellor George Osborne said: "This is another step towards creating a new banking system for Britain that gives real choice to customers and supports the economy.
"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."
Around 8,000 staff are expected to transfer with the deal, including around 3,000 support staff in call centres and administration sites, and the Co-op said it aimed to retain employees.
David Fleming, national officer for trade union Unite, which represents staff at both banks, said: "This brings to an end a long period of uncertainty for the staff, who will welcome the clarity this decision will bring."
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26Comments
19/07/2012 14:34
19/07/2012 16:52
19/07/2012 14:15
19/07/2012 10:52
19/07/2012 10:26
19/07/2012 16:03
19/07/2012 16:34
Does this mean if we are told that my branch is one of those thats being transfered over to the co-operative we will be given somekind of transfer offer if you switch your account to them i dont think so but you can only hope that you will get some kind of gesture for switching as the nearest bank could be miles from were you live and cause you considerible heartache exspecial if your a pensioner like me.????.
19/07/2012 18:15
Good. Although the banks which got into trouble should have been left to fail. Taxpayers money was used to keep them afloat, but the government should have seized the failing banks and rebranded them as a new 'peoples' bank, but as a nationalised institution. All deposits with the failed banks would have been guaranteed and the cost of the whole operation....a fraction of what WAS spent supporting a failed industry and keeping the same old, same old figures in their highly remunerated positions.
19/07/2012 14:18
19/07/2012 16:51
Oh dear I am in the process of migrating to the Co-Op bank I was initially informed that the whole process of switching would take just 7 - 10 days, in addition told that I would be bombarded with texts from the switching team, had just two in over 4 weeks? it's a month on, no switching date, no current account card absolutely nothing, I'm getting the word CLUELESS
19/07/2012 11:15
19/07/2012 17:12
don't see how this works as lloyds would probably would have rebounded sooner and the capital gains from that could have helped with the government debt of which the interest is accumulating seems clumsy as coop isn't nowhere near being a major competitor and might be sold anyway back to the big four banks. clumsy very clumsy
19/07/2012 18:08
If you are a Lloyds customer whose accounts are held at one of the branches that are sold to the co-op, I believe that your accounts will move to the co-op but there is nothing stopping you from moving your account back to Lloyds, nothings being changed over until next year though I dont think?
19/07/2012 11:08
20/07/2012 19:32
20/07/2012 04:47
I quite like the Co-op but this is very underwhelming. The "biggest shake up in a generation" is simply that the big five banks are now the big six. I'd rather have it so that we have at least one nationalised bank so there's at least someone who tries to serve the interests of the people for once.
20/07/2012 16:07
I have been with the co-op Bank ever since it started, with handytills inside a Co-op store, we had a book which we took to the handytills every time to take out money or put in money. They then progressed to cheques and then to debit cards. They are totally ethical and we have never had a problem, if you do see a problem on your bank statement, phone the bank and you will be refunded £12 because of their mistake. How many other banks do this?
Go Go Co-op Bank
19/07/2012 23:18
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