Help! They have just sold my bank

Some Lloyds branches will be re-branded as TSB before the transfer to Co-op. Photo: John Stillwell/PA Wire

The European regulators demanded it; the Chancellor welcomes it; the Co-op is celebrating it ... but nobody has asked the customers.

Five million customers at more than 600 Lloyds branches will find themselves transferred, sometime next year.

Most of the accounts will also move. It is an irony that a development heralded as pro-consumer choice will all happen without the individual customers making any choice in the matter. In essence, customers are being sold off at £70-a-head.

This morning Lloyds said:

You don’t need to do anything differently as there will be no changes for some time. We will keep you up to date at every stage and you can carry on banking just as you do now. We will write to customers who are directly affected by the transfer to let you know what the changes mean.

– Lloyds statement to customers

Of course, once all this happens any customer will be free to switch away from the Co-op if they so wish. Oddly, the Lloyds banking group is not allowed to tell customers much about that, because it is forbidden from directly marketing to retain these customers.

No branches are closing as a result of all this, but customers may notice some strange changes. For example some Lloyds branches will be re-branded as TSB before the transfer to Co-op. They say:

The part of our business which is transferring to The Co-operative will be rebranded to TSB ahead of the transfer. So, we will also need to rebrand our remaining network of 1,300 Lloyds TSB branches. We will keep you updated on our plans.

– Lloyds

Even those customers that get transferred to Co-op will in some senses rely on Lloyds. That's because the chain will still use Lloyds computers, call centres and capital.

Although politicians are already saying this shows new entrants can come into the banking market, the reality is that it has only been possible with massive assistance of cash and expertise from state-owned Lloyds.

  • The 632 Lloyds TSB and Cheltenham & Gloucester branches that are being sold to the Co-Operative Group are listed here.