Lloyds branches sale called off

The sale of 632 Lloyds Banking Group branches to the Co-operative Group has collapsed. The financial institution, which is 43% owned by the taxpayer, was forced to sell them by European regulators.

Co-op boss: Banking has become 'too difficult' in UK

The head of the Co-operative Group Peter Marks has said that "banking has become very difficult" in the UK and that economic growth is too poor to expect a profit.

He told ITV News' Economics Editor Richard Edgar that the Co-op remains committed to its banking operation but that he sees no point in expanding with interest rates likely to stay so low.

Read: Planned sale of 632 Lloyds branches to Co-op collapses

PM: Reforms making 'safer and stronger' finance sector

by - Former Political Correspondent

The Prime Minister's spokesman has said that Co-operative Group's decision not to buy more than 600 branches from Lloyds was a matter for the two companies.

But on the wider point of banking reform, he told me:

I think that there are reforms in thefinancial arena that have made the UK financial sector safer and stronger and anumber of measures are benefitting consumers including through choice.

– prime minister's spokesman

The Co-op reportedly cited regulatory requirements as one of the reasons for the collapse of the deal.

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Lloyds: TSB bank to operate as a separate business

Lloyds has announced that TSB Bank is being set up as a separate business that will be seen on the high street from this summer.

TSB Bank is being set up as a separate business
TSB Bank is being set up as a separate business Credit: Steve Parsons/PA Wire

A statement on the bank's website said: "The Group continues to make good progress in the creation of Verde as a stand-alone bank.

"A strong management team is in place and we have made good progress in creating segregated IT systems on the proven Lloyds Banking Group platform ...

"Detailed plans are in place for a rebranding of the business as TSB which will be visible on the High Street during the summer of this year, at which point the TSB Bank (Verde) will operate as a separate business within Lloyds Banking Group."

Lloyds: Co-op pulled out due to economic climate

Lloyds has given the following explanation for the collapse of the planned sale of more than 600 branches to the Co-operative Group, citing the Co-op's board:

The Co-operative Group's board has decided that they can no longer proceed with a purchase of the Verde business given their view of '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'.

– lloyds statement

Planned sale of 632 Lloyds branches to Co-op collapses

Lloyds Banking Group's sale of more than 600 branches to the Co-operative Group has collapsed.

Part-nationalised Lloyds, which is being forced by Europe to sell the branches after its £20 billion taxpayer bailout during the financial crisis, will instead pursue a stock market flotation for the division this summer.

The Co-op has reportedly struggled to plug a £1 billion capital gap needed to complete its takeover of the 632 Lloyds branches, blaming the weak economic outlook and heavy regulatory burdens.

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