Lloyds deal still alive says Co-op
THE Co-operative Group is still advancing, albeit in difficult circumstances, on its planned acquisition of more than 630 bank branches from Lloyds.
Technical issues related to IT and questions over the degree of risk, related to state of the economy have held-up the completion of the deal.
Last summer, the Co-op agreed to pay £350m upfront and up to an additional £400m based on the performance of the combined business.
“We’re getting in shape to do it if we can,” Co-operative Group chief executive Peter Marks said. “We’re clearing the decks in order to take advantage of the [Lloyds branch] acquisition if we decide to go ahead with it.
“We’re trying to conclude this transaction in very difficult economic times. That’s what makes it more difficult. We’re trying to establish what the risks are and to mitigate those risks.”
Mr Marks, who is retiring later this year, added there was “still a lot of work to do on the deal, which is known as Project Verde.
On Thursday the mutually-owned group reported annual financial results. While the proposed sale of the insurance business grabbed the headlines, along with a £600m loss in the banking division, there were mixed fortunes for the the other group businesses.
The Food business, which has 2,800 shops, saw its profits fall by 9% to £288m. Revenues in the Rochdale-based Pharmacy division rose 1.3% to £764m, but operating profits were down 4.9% to £28.2m due to ongoing cuts in government funding.
Funerals was a strong performer with 2012 revenues up 6.4% to £348m, and operating profit up to £60m from £55m.
Legal Services – a key area for future growth – saw revenue up 12.8% to £33m, delivering a profit of £26,000 in what was described as a “startup phase”. after absorbing significant investment for growth costs
