One of Britain's smallest banks has became one of the country's biggest after Lloyds sold more than 600 branches and the accounts of up to five million customers to the Co-operative.
The deal means it will triple its footprint on our high streets. The Co-op's chief executive promised a revolution, restoring trust to high street banking. Richard Pallot asks if he can deliver on that.
Richard Lloyd, executive director of Which?, said that while the move was a "welcome first step" in increasing competition, portable account numbers should be introduced to make switching your bank as easy as changing your mobile phone.
Sarah Brooks, director of financial services at Consumer Focus said it was vital that the Co-op used its new status to offer a point of difference and not just "more of the same".
She urged Lloyds and the Co-op to communicate the changes clearly to their customers so they could decide what to do.
– Rachel Springall, spokeswoman for MoneyfactsThe Co-operative Bank has been in the financial services sector for 140 years and additional branches will be great news to not only its loyal customers, but also to prospective new customers looking to make a move from their existing bank...They also continue to support various charitable causes by the way of issuing charity credit cards.
– Kevin Mountford, head of banking at comparison website MoneySupermarketAs we have seen over recent weeks following the recent banking turmoil, many smaller banks, including the Co-operative Bank, have benefited from customers switching away from the big banks.
Creating a new 'real' challenger to the big banks may be the antidote the sector needs, and may encourage a culture of switching which has been lacking over the past few years, especially as the Co-operative Bank is seen as a more trusted brand than many of its rivals.
Chancellor George Osborne said the sale of 632 branches from Lloyds Banking Group to The Co-operative is good news for the British economy.
Where does the Lloyds sale of 632 branches to the Co-op leave its customers?
Read the full story– Alex Jackman, Senior Policy Advisor at the Forum of Private BusinessIf this deal goes ahead it will see Co-op land a 10% slice of the UK’s high street banking pie. That’s a sizeable figure and will give them real clout as a mainstream lender.
This could be a really significant development for small firms looking to restore traditional relationship banking, where the tick box lending criteria approach will hopefully have no place.
Co-op is already a respected high street name with great ethical standards and credentials most other banks can only dream of.
Lloyds said there would be no changes for the 4.8 million customers affected by the sale of 632 branches to the Co-Op until next year.
The group said all its customers will be contacted regarding the changes and those affected will be given the option to transfer to the Co-Op or remain with Lloyds.
Chancellor George Osborne hailed the agreement to transfer 632 branches from Lloyds Banking Group to the Co-operative Group:
– Chancellor George OsborneThis is another step towards creating a new banking system for Britain that gives real choice to customers and supports the economy.
The sale of hundreds of Lloyds branches to the Co-operative creates a new challenger bank and promotes mutuals.
This follows the sale of Northern Rock to Virgin Money in January and represents another important step towards a more competitive banking sector.
