NBNK set for comeback on Lloyds sell-off

THE bank buyout vehicle run by Lord Levene is about to make another approach for the 632 Lloyds branches put up for sale as it appears a deal with the Co-operative Group could falter.

NBNK is planning an improved £1.5bn offer for the Project Verde assets, the future of which appears uncertain after Lloyds last week pushed back the deadline for signing a sale agreement with the Co-op.

New bank NBNK proposes Lloyds demerge the 632 branches, float the business and allow NBNK to fully underwrite the demerger in cash. Its hopes have been raised by the delay in the deal with the Co-op, which has preferred bidder status.

The FSA is carrying out a detailed interrogation of the Co-op, which could lead to changes to the group’s structure to ensure its financial services arm is capitalised separately. The regulator has also asked if the Co-op Financial Services arm has sufficient management experience.

Yesterday Lloyds said it is preparing for an initial public offering alongside the sale talks. A person familiar with the views of NBNK said: “They remain keen to offer something to Lloyds should the Co-op deal fall apart.”

Co-op executives are understood to have expected a long process, because of the complexity of the transaction and the need to get the right deal for its members. NBNK and Lloyds declined to comment.