Coop to make second-round bid for Lloyds branches

The Co-operative Group will make a second-round bid next week for the 632 Lloyds Bank branches being sold as part of its bailout deal, the Manchester-based bank has confirmed.

The Coop, which also owns former building society Britannia, joins new high street bank NBNK in the second-round race to buy the Lloyds assets in an auction dubbed Project Verde.

Coop’s group chief executive Peter Marks said the bid reflected the bank’s clear growth strategy.

“We remain interested in the Lloyds Banking Group’s branch assets as we believe this would support our moves to grow our relationship banking business in the UK,” he said.

“Our bid for the assets is non-binding and we would only proceed if we could reach an agreement that was in the interests of our members and other stakeholders.”

NBNK, run by former Lloyd’s of London chairman Lord Levene, is believed to have bid about £1.5bn for the Lloyds assets, which combine deposits, branches and loans and are thought to be valued at about £2.5bn.

A third potential bidder, Sun Capital, was last month understood to be unlikely to put in a second-round offer.

Coop could be a potential frontrunner in the deal, however, as an already-established UK bank it would need to hold less regulatory capital against the assets, which Lloyds must also provide as part of the sale.