Written by Scott Campbell.
Published at 07:27 BST on Friday, 27th July 2012.
 
Cumbernauld's Lloyds TSB branch could soon become a Co-operative Banking Group branch

Cumbernauld Town Centre will soon see its Lloyds TSB branch transform into a Co-operative bank, as Lloyds Banking Group and the Co-operative group announce which branches will be sold off to the Co-operative Group.

The new deal between Lloyds and the co-operative is the biggest shake-up in high street banking in a generation, with almost 1’000 Lloyds TSB branches lined up to become part of the Co-operative group.

Since the announcement, earlier this week, the Co-operative Group and Lloyds Banking Group have said that the two groups are working towards agreeing definitive, binding documentation, subject to the satisfactory completion of further due diligence and Board approvals, with completion of the transaction is expected before the end of November 2013; conditional upon, among other things, regulatory approvals from the FSA, HM Treasury and the European Commission.

As part of the shake-up, The Co-operative Group will acquire 632 branches from Lloyds Banking Group, which includes all Lloyd’s Scottish branches, alongside some English branches, with an estimated 4.8 million customers, accelerating delivery of The Co-operative Group’s strategy, creating the compelling co-operative alternative with a combined bank network of almost 1’000 branches across the UK, representing nearly 10% of today’s UK bank network and 11m customers

As part of the heads of terms, The Co-operative Banking Group will pay Lloyds Banking Group an initial consideration of £350m, with the earliest completion anticipated by November 2013.

Peter Marks, Group Chief Executive of The Co-operative Group, said: “We’re delighted to be announcing that we have reached agreement in principle with Lloyds Banking Group on the terms of this important and transformational transaction. This deal would deliver the biggest shake-up in high street banking in a generation. Consequently, we believe this would be a great deal for customers, for the public, for UK banking generally and for The Co-operative Group, in particular.

“It would be a great deal for customers because it would make the services of our member-owned, customer-led, ethically-driven, bank available to millions of people we’ve not been able to serve up until now.

“It would be a great deal for the taxpayer because as well as receiving a fair price up front, the deal would also mean they would share in the profits of the enlarged bank for years to come.

“So far as UK banking generally is concerned, this would be a great deal because it would help restore trust in a sector whose image has been badly tarnished over recent years.

“And finally, it would be a great deal for The Co-operative Group, its 20 million customers, its seven million customer-owners and its 100,000 staff, because it would propel us into the premier league of UK banking.

“The acquisition of the Verde business would significantly advance our growth strategy, creating a combined bank approaching 7% market share of UK personal current account customers. That would allow us to really challenge the status quo on the high street.

“Despite the crisis in the financial sector, our bank has continued to go from strength to strength, coming through the financial crisis in great shape and maintaining our ethical and socially responsible credentials. Whilst we are not at the end of the road yet, we are pleased to have reached this important milestone and look forward to continuing to work with Lloyds Banking Group to reach a final agreement.”