Lloyds bank is forced to sell 632 branches by the EU in lieu of �20bn in state aid it received amid rescue of the sector in 2008
Up to 10 potential bidders are understood to have a requested detailed break down of the size, footfall and profitability of 632 branches put up for sale by Lloyds Banking Group.
The bailed out bank is being forced to sell the branches ? the equivalent of 4.5% of the current account market ? by the EU in return for up to �20bn in state aid following the October 2008 bailout of the banking sector. The Cheltenham & Gloucester brand is also on the block.
Ant�nio Horta-Os�rio, the new Lloyds boss, is proceeding with the sale even though the independent commission on banking has suggested that the bank ought to sell off many more branches to bolster competition in the banking sector.
Among the interested parties are Sir Richard Branson's Virgin Money, NBNK, the new bank set up by Lord Levene and former Northern Rock boss Gary Hoffman, as well as the Cooperative Bank. International players such as National Australia Bank, which owns Clydesdale and Yorkshire, are also believed to be interested. Some bankers believe that NBNK and NAB could ultimately present a combined offer for the branches.
Lloyds refused to comment on the process last night but Horta-Os�rio told the Treasury select committee this week that he expected to receive indicative offers for the branches by the end of July ? a full month before the independent commission on banking is scheduled to publish its final report on how to bolster competition and reduce risk in the system. A stock market flotation of the branches has not been ruled out, according to bankers, if a buyer cannot be found.
The Portuguese-born banker is also putting the finishing touches to a strategy review that is to be presented on 30 June when he is expected to promise an extra �1bn of annual cost savings in addition to the �2bn a year promised through the integration of Lloyds and HBOS.
More jobs ? on top of the 27,500 roles lost since the rescue of HBOS in September 2009 ? are also expected to be put at risk as Horta-Os�rio dismantles existing operational fiefdoms to integrate the banks integrated. Senior management roles are likely to be vulnerable.
He is also expected to use the strategic review to spell out a commitment to the insurance arm Scottish Widows as well as a pledge to reinvigorate the Halifax brand and differentiate it from the Lloyds one by offering more competitive savings rates and mortgage products.
Horta-Os�rio will present his strategic review for the bank ? which he told MPs would be more "evolution than revolution" ? after taking a �3.2bn knock to 2011 profits to rectify mis-sold payment protection insurance.
He also hinted to MPs that the bank would pull back from its remaining international ventures to focus on its UK high street operations and commercial banking markets.After taking the helm of Lloyds on 1 March 1, Horta-Os�rio immediately accelerated the sale of the branches. The EU had required that at least 600 were sold, the equivalent of 4.5% of the current account market, which Lloyds dominates following the HBOS takeover.
Source: http://www.guardian.co.uk/business/2011/jun/10/lloyds-banking-group-branch-sale
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