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NBNK to bid for Lloyds branches

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by Kay Mitchell

According to the BBC, financial institution NBNK is to submit a second bid for the 600+ branches which Lloyds Banking Group is putting up for sale.

It is understood the branches could fetch around £1.5 billion, according to sources close to the matter.

Lloyds is selling the branches under the orders of the European Commission as a punishment of the billions of pounds in state aid that it received by the Government at the height of the financial crisis.

There are believed to be two other potential bidders, which are Co-Operative Financial Services, owner of Co-Op Bank and Britannia Building Society, and US investment company, Sun Capital.

However, these have yet to submit a second formal bid but banking giant Lloyds has not set a deadline which means the two can still put in offers in the next few weeks.

Antonio Horta-Osorio, the chief executive of Lloyds, has previously said he is keen to find a buyer for the business before the end of the year and that it could choose to spin-off those branches if it fails to agree on a sale.

NBNK, which is run by Gary Hoffman who is the former chief executive of crisis-torn Northern Rock, was established a year ago to make acquisitions and is set to build a significant presence in the UK as a retail bank.

It plans to compete with other High Street banks and said it will focus on “traditional, personalised banking services”.

It was co-founded by Lord Levene, the chairman of Lloyd’s of London, while board members include former Treasury Committee head Lord McFall and Sir David Walker.

In the meantime, it is believed that NBNK is eyeing 75 branches from nationalised bank Northern Rock but is banned from making a bid for the lender until November 1, because of Mr Hoffman’s appointment.

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News posted: September 28, 2011

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