More than 600 branches of one of the UK’s biggest personal and business bank account providers is going on the auction block after being ordered to do so by the EU.
Lloyds TSB is selling 632 of its branches in restitution for the £20 billion it received from the Government after the 2008 bank bailout. Up to a total of 10 bidders may potentially be interested in the parcel of branches, industry insiders have said.
New Lloyds boss, António Horta-Osório, is going forward with the sale, despite a suggestion made by the independent commission on banking that the bank should sell off an even higher number of branches to increase competition in the current account sector. The 632 Lloyds branches represents approximately 4.5 per cent of the UK’s current account market.
There are several parties interested in purchasing the branches in the UK, including the Cooperative Bank, NBNK (the new lender founded by one-time Northern Rock boss Gary Hoffman and Lord Levene), and Sir Richard Branson’s Virgin Money. Internationally, Clydesdale and Yorkshire owners National Australia bank are rumoured to be interested; there are some within the industry that believe NAB and NBNK could actually combine their efforts to purchase the branches.
The High Street giant declined an opportunity to comment on the possible purchase. However, Mr Horta-Osório recently told the Treasury select committee that the bank had the expectation to receive definitive purchase offers by the end of next month.
The sale could come just in time, as August is the projected publication date for the independent commission on banking’s final report on ways to reduce systemic risk and increase competition. If a buyer cannot be found for the branches, a stock market flotation may be in order, bankers say.