THE Co-operative Group today announced that its planned acquisition of over 600 UK bank branches from Lloyds Banking Group has fallen through, due to challenging economic and regulatory conditions.
If The Co-op had taken over the branches, it would have created Britain’s seventh largest bank.
“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,” said Co-op chief executive Peter Marks.
Lloyds, which received a government bailout during the economic crisis, said that it now plans to dispose of the branches via a stock market listing.
Lloyds’ disposal of the 630 branches – named project Verde – was mandated by European regulators, as a condition of the bailout.
“We are disappointed that The Co-operative Group is unable to complete this transaction,” said Lloyds chief executive Antonio Horta-Osorio.
“However, we are well advanced in our plans to bring the Verde business to the UK High Street during the summer through the TSB Bank, and will now proceed with the option to IPO the business, subject to the necessary approvals.”