Lloyds Sells 632 Branches At Pound 750 Million to Co-op Less Than Half It Hoped
Now it is clear that Lloyds will sell its 632 bank branches to Co-op at half price. It will transfer 4.8 million customers & £24 billion to the balance sheet of later in this deal. Co-op is also one of the big banks having 1000 branches which is 10 % share of UK market. With this transfer it will get 4.8 million customers which will add to its 3.1 million customers. Also as much as 8000 staff members are going to transfer.
The deal which has code name Project Verde will cost only pound 750 million to the later which is less than the half which Lloyds hoped at £2 billion. The deal includes upfront payment of £350 million only and other pound 400 million has to be paid in span of 15 years.
The loss which stands at £1.2 billion is a major blow to the bank, further more it have to pay £1.5 billion as a claim as it was involved in Libor scandal, an analysts stated. The later bank will also face funding problems after transfer of funds and customer, which consist of 3.1 million personal current accounts which is 7% of the market. But finally it is a good deal for the bank according to its CEO.
Summary: Lloyds Bank is going to sell 632 branches to Co-op and that too at price less than the half it was hoping for which was disclosed today.