Lloyds Banking Group has officially ended the exclusivity contract that it held with The Co-Op in regards to the sale of 632 branches of the bank and is now holding discussions with other buyers such as NBNK which is owned by Lord Levene.
However, while the decision to sell the branches may be no longer exclusive with Co-Op, Lloyds did state that they are still having discussions with the Co-OP about purchasing the Verde business and that the group would be their preferred buyer if the right negotiations were to come to the table.
EU regulators ordered the sale of the branches after Lloyd had to be bailed out with taxpayer money back in 2008 after it took over HBOS. The sale of the branches has become referred to as Project Verde and whoever gets control of the branches will be able to take on the title as the seventh largest bank in Britain making the sale monumental.
It looked as if Co-OP would be purchasing the branches but regulatory problems during April forced Lloyds to push its final deadline for the sale back and open it other banking institutions as well. The FSA (Financial Services Authority) is concerned that the Co-op may not be able to properly manage the business.
Instead, it would like to see the Co-op rework its board and put better managers in place that will be able to handle the more complex business needs of such a purchase. The FSA is also worried about the fact that the Co-op has not yet replaced the chief executive for its banking sector.
Chief executive for NBNK, Gary Hoffman, is said to be studying an approach that could help the purchase the banking arms and he is said to be confident that NBNK would meet the regulatory criteria if they sale were to be pushed through.