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| Lloyds' branch sale to Co-op collapses | Lloyds' branch sale to Co-op collapses |
| (35 minutes later) | |
| The planned sale of more than 600 UK bank branches by Lloyds Banking Group to the Co-op group has fallen through. | The planned sale of more than 600 UK bank branches by Lloyds Banking Group to the Co-op group has fallen through. |
| The Co-op blamed the continued economic downturn and tougher regulatory environment imposed on banks. | |
| Lloyds said it will now seek to sell the branches as a stand-alone bank through a stock market listing. | |
| Lloyds' chief executive António Horta-Osório said: "We are disappointed that the Co-operative Group is unable to complete this transaction." | |
| The sales of the 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. | |
| The Lloyds statement said: "The Co-operative Group's board has decided that they can no longer proceed with a purchase of the Verde business given their view of 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." | |
| During the summer the branches will be branded as TSB Bank, and the group will operate as a separate business within Lloyds ahead of a sale. | |
| The Co-op's 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." | |
| Lloyds, which is 40%-owned by the government, had a deadline of November 2013 to complete the sale in order to meet European Commission competition rules. But there have been reports over the past few months that the Co-op was going cool on the acquisition. | |
| A flotation is unlikely to be possible until the second half of 2014, which would mean the UK government and Lloyds asking Brussels to extend its end-2013 deadline for the sale. | |
| Co-op agreed in 2012 to buy the branches. | |
| The takeover would have created Britain's seventh-biggest bank with about 5% of personal current accounts and mortgage market and about 10% of the branch network. |