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Lord King: politicians were not wedded to Co-op bid for Lloyds branches Lord King: politicians were not wedded to Co-op bid for Lloyds branches
(about 1 hour later)
The former Bank of England governor, Lord King, has attempted to distance himself from any suggestions that politicians were involved in promoting the Co-operative's Bank ill-fated bid for 631 branches from Lloyds Banking Group. The former Bank of England governor, Lord King, has attempted to distance himself from any suggestions that politicians were involved in promoting the Co-operative Bank's ill-fated bid for 631 branches from Lloyds Banking Group.
Until a year ago, the mutually-owned Co-op was the frontrunner to buy the so-called Verde branches, ahead of a rival offer by bid vehicle NBNK, run by the former Lloyd's of London chairman, Lord Levene.Until a year ago, the mutually-owned Co-op was the frontrunner to buy the so-called Verde branches, ahead of a rival offer by bid vehicle NBNK, run by the former Lloyd's of London chairman, Lord Levene.
Levene has claimed before the Treasury select committee that he had been told by King – at meetings in May and July 2012 – that the NBNK bid would not be accepted because politicians wanted the mutually-owned Co-op to succeed. Levene has claimed before the Treasury select committee that he had been told by King – at meetings in May and July 2012 – that the NBNK bid would not be accepted because politicians wanted the mutually owned Co-op to succeed.
The Co-op pulled out of the bid last year and within two months had revealed a £1.5bn black hole in its accounts.The Co-op pulled out of the bid last year and within two months had revealed a £1.5bn black hole in its accounts.
King, who retired as Bank of England governor in June 2013, produced notes taken during the meetings with Levene to demonstrate that he had not suggested politicians were wedded to the Co-op bid. The former governor, though, admitted he was concerned about repeated delays to the sale of the branches, which was demanded by the EU in return for the £20bn taxpayer bailout.King, who retired as Bank of England governor in June 2013, produced notes taken during the meetings with Levene to demonstrate that he had not suggested politicians were wedded to the Co-op bid. The former governor, though, admitted he was concerned about repeated delays to the sale of the branches, which was demanded by the EU in return for the £20bn taxpayer bailout.
In a letter to the chairman of the Treasury select committee, Andrew Tyrie, King said: "The record [of the May meeting] shows that I said I would raise my concerns about the slow progress of the transaction with the chancellor. At the time I was frustrated by the delays to the process because the Verde transaction promised to inject more competition into the banking sector, regardless of who the successful bidder was, and to enable Lloyds Banking Group to move quickly to implement its new strategy." In a letter to the chairman of the Treasury select committee, Andrew Tyrie, King said: "The record [of the May meeting] shows that I said I would raise my concerns about the slow progress of the transaction with the chancellor.
"At the time I was frustrated by the delays to the process because the Verde transaction promised to inject more competition into the banking sector, regardless of who the successful bidder was, and to enable Lloyds Banking Group to move quickly to implement its new strategy."
After Co-op was chosen as the preferred bidder for the branches, Levene went to see King again. According to the record released by King, Levene had said he was frustrated at Co-op being selected because it reflected government pressure on Lloyds to accept the offer from a mutual.After Co-op was chosen as the preferred bidder for the branches, Levene went to see King again. According to the record released by King, Levene had said he was frustrated at Co-op being selected because it reflected government pressure on Lloyds to accept the offer from a mutual.
"Levene said that NBNK's shareholders were questioning why £30m had been spent on what was a wild goose chase. And they would want to know what if anything could be done about it," the minute of the meeting said."Levene said that NBNK's shareholders were questioning why £30m had been spent on what was a wild goose chase. And they would want to know what if anything could be done about it," the minute of the meeting said.
King had asked Levene if he was considering legal proceedings and was told he knew he needed more than "hearsay" to prove misconduct during the bidding process. King had asked Levene if he was considering legal proceedings and was told he knew he needed more than hearsay to prove misconduct during the bidding process.
The former governor said that while it "seemed to me that the government wished to ensure that, if it were possible, a plausible bid from the Co-operative Bank was able to be considered alongside other bids, that was a far cry from any improper conduct in the bidding process." The former governor said that while it "seemed to me that the government wished to ensure that, if it were possible, a plausible bid from the Co-operative Bank was able to be considered alongside other bids, that was a far cry from any improper conduct in the bidding process".
King said: "Had I received evidence of improper behaviour I would have raised that with the regulator, the government and, if necessary, parliament through the Treasury committee."King said: "Had I received evidence of improper behaviour I would have raised that with the regulator, the government and, if necessary, parliament through the Treasury committee."