Co-op board ‘set for talks on Lloyds bid’

THE board of the Co-operative Group’s banking arm will meet this week to discuss whether to proceed with its bid for 632 Lloyds bank branches, according to reports.

Although the organisation was named as preferred bidder for the branches back in December, its bid has since stalled as negotiations have dragged on with the Financial Services Authority.

It is understood to want to treat the entire Co-operative Group as a financial services body, rather than just its baning arm. This would lead to the organisation having to hold a further £3bn of capital at group level. The Co-operative has also not divulged how it plans to finance the deal.

Last week, NBNK Investments announced a new offer for the Lloyds bank branches, which are part of a package of assets labelled Project Verde being sold off to meet state aid rules. Its new bid places a higher value – understood to be around £2bn – on the assets than the Co-operative’s winning bid.

It is seeking to create a new bank from the deal and has offered existing Lloyds shareholders the prospect of either taking cash or keeping shares in the new entity.