The proposed sale of the Lloyds-owned TSB branches to the Co-Operative Group has fallen through and instead could be offered to members of the public as part of an IPO.
High street giveaway
The sale of 632 branches was forced on the Lloyds Banking Group by the European Commission as one of the conditions of its bailout by the UK government during the financial crisis. Until its recent board meeting, the Co-Operative Group had been favourite to buy the Verde business, the name given to the project team tasked with disposing of Lloyds’ retail and commercial assets.
However, in a statement this morning, the Co-Operative’s board has decided to no longer proceed with the purchase given its 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".
Lloyds has confirmed that it will now offer the Verde business through an IPO.
The decision by the Co-Op mirrors Santander’s move at the end of 2012 to pull out of a proposed deal to buy just over 300 branches of RBS. The reasons given at the time included short timelines, an over-inflated price and problems integrating the two companies’ technologies.
Tainted by FSA past
These branches are still up for grabs although it has recently been reported that John Tiner, the man leading the consortium looking to buy them and possible chairman of the new-look RBS branch business, has quit the group.
Given he was chief executive of the FSA for four years up to 2007, his move is likely to be so the consortium can avoid the anti-FSA backlash expected following the publication of various reports looking at the regulator’s role in the lead-up to the financial crisis.
All of this banking news follows yesterday’s mixed news from HSBC which announced 1,150 job cuts on the one hand, while also recruiting an additional 300 regulated advisers.
All in all, this is incredibly embarrassing for a government that, as well as ultimately being responsible for the actions of FSA, is slowly failing in its attempt to implement its policy of greater competition in the banking sector five years after the crisis kicked in.
