Lloyds reaffirms commitment to TSB brand despite collapse of deal

Lloyds TSB: Co-op pulls out of £800m deal
Lloyds TSB: Co-op pulls out of £800m deal

Lloyds has reaffirmed its commitment to ensuring the TSB brand will be on the high-street this summer, despite the collapse of the sale of more than 600 branches to the Co-operative Group.

The Co-op has pulled out of the planned £800m deal, saying it was "not in the best interests of the Group’s members".

"This decision reflects the impact of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general," the company said in a statement.

Lloyds is being forced to sell-off the branches, known as Project Verde, by European regulators, following the £20 billion taxpaper bailout during the financial crisis.

Lloyds will now pursue a stock market flotation for the division and the rebranded TSB branches will be on the high-street by the summer.

A source close to Lloyds said the bank had been pursuing the "dual strategy" of either selling off the branches or a flotation.

The Co-op was named preferred bidder for the branches in 2011, beating off competition from NBNK Investment.

Peter Marks, chief executive of The Co-op Group, said: "Having worked closely and constructively with Lloyds we are naturally disappointed to have reached this conclusion.

"However, against the backdrop of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general, the Verse transaction would not currently deliver a suitable return for our members within a reasonable timeframe and with an acceptable level of risk."

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