Lloyds branch sale collapses
Lloyds had been in discussions to sell 632 of its branches to the Co-operative following its government bailout.
However following months of talks the Co-operative has withdrawn from discussions saying it is not in the best interests of the group’s members.
Peter Marks, group chief executive of the Co-operative 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 transaction would not currently deliver a suitable return for our members within a reasonable timeframe and with an acceptable level of risk.”
The withdrawal has led to disappointment in some quarters of the industry as many hoped the acquisition would have increased competition in the retail banking sector.
Richard Lloyd, executive director of Which?, said: “This is very bad news for everyone wanting to see more competition in retail banking anytime soon.
“The Co-op’s decision is a setback to the Government’s efforts to tackle the unhealthy dominance of our biggest banks.
“This would have given more choice to consumers who are sick and tired of shoddy service and unfair fees and put more pressure on the big banks to work for customers, not bankers.”
Lloyds said it will now seek to sell the branches as a stand-alone bank through a stock market listing.