The Co-operative Bank has struck a deal to buy 632 Lloyds TSB and Cheltenham and Gloucester (C&G) branches in the UK, in what it’s calling the “biggest shake-up in high street banking in a generation”.
Unless specifically requested otherwise, some 4.8m customers will see their accounts automatically transferred to The Co-op in the deal, increasing the bank’s market share of UK current accounts seven-fold, from 1% to 7%, and bringing its total branches to almost 1,000.
The acquisition sees The Co-op pay Lloyds and C&G £350m as an initial sum, rising to £750m depending on performance, for ‘Verde’ – the working name for a new bank that Lloyds Banking Group had planned to launch late next year.
The new business’ CEO Paul Pester is currently awaiting FSA approval to be installed as chief executive of the newly acquired section of the bank.
NBNK, an investment company formed by Lord Levene and led by ex-Northern Rock chief Gary Hoffman, failed in its attempt to purchase Verde for a princely £1.5 billion in June this year, and ultimately announced its intention to wind down after this unsuccessful bid.
Lloyds had been forced to sell the branches under European Union state-aid rules, after it received a £20 billion lifeline during the 2008 credit crunch, meaning it is now 40% owned by the taxpayer.
The Co-op’s successful acquisition of Verde, for a sum much less than the one NBNK offered, was described by Lloyds Banking Group chief executive António Horta-Osório as “an important step”. He added that the deal provides “greater certainty for [its] customers and for [its] shareholders”.
Peter Marks, group chief executive of The Co-operative Group, described how he believed the deal to be good news for customers, the public, the UK banking sector and for The Co-operative Group itself.
Despite the crisis in the financial sector, our bank has continued to go from strength to strength – Peter Marks, The Co-operative Group
“It would be a great deal for customers because it would make the services of our member-owned, customer-led, ethically-driven, bank available to millions of people we’ve not been able to serve up until now”, he said.
“It would be a great deal for the taxpayer because as well as receiving a fair price up front, the deal would also mean they would share in the profits of the enlarged bank for years to come.
“So far as UK banking generally is concerned, this would be a great deal because it would help restore trust in a sector whose image has been badly tarnished over recent years.
“And finally, it would be a great deal for The Co-operative Group, its 20m customers, its 7m customer-owners and its 100,000 staff, because it would propel us into the premier league of UK banking.”
The UK’s high street banks have received a significant amount of pressure lately, particularly after the Libor rate-fixing scandal at Barclays and, more recently, the accusations of money laundering at HSBC.
This has led to an unprecedented increase in customers seeking out alternative options, with some of the smaller ethical banks receiving levels of interest never seen before in their existence.
Triodos Bank, for example, which provides 40,000 current accounts in the UK, witnessed a 51% surge in account applications in the week in which the Barclays scandal came to light. In one 24-hour period, the bank opened three times as many accounts compared to an average day.
Meanwhile, Charity Bank revealed it had welcomed 440 new customers between January 1 and June 30 this year – a figure 300 more than the same period in 2011.
The Co-op, as the largest ethics-driven bank in the UK, has also seen an increase of interest in recent months, as well as faring well in troubled economic times, according to its chief executive, Marks.
“Despite the crisis in the financial sector, our bank has continued to go from strength to strength, coming through the financial crisis in great shape and maintaining our ethical and socially responsible credentials”, he outlined.
“Whilst we are not at the end of the road yet, we are pleased to have reached this important milestone and look forward to continuing to work with Lloyds Banking Group to reach a final agreement.”
Blue & Green Tomorrow’s next in-depth report is about sustainable banking. We’ll be talking to a number of UKJ ethical banks and building societies to get a flavour of what it means to be a customer of an institution that actually cares.
Like our Facebook Page
Highly Effective Eco-Friendly Hand Sanitation Practices
Are Electric Vehicles Ready for Mass Adoption? What’s Holding Them Back
Mastering the Key Elements of Sustainability in Ecommerce
Infographic: Fighting The Environmental Impact Of Face Masks
10 Perfect Zero Waste Christmas Gifts To Give This Year
Consider Making a Profound Change as an Environmental Lawyer
10 Simple Home Improvement Tips To Create A Green Home Environment
Eco-Friendly Guide To Off Grid Boondocking In Your RV
Business Initiatives: Ways to Preserve the Environment
Ultra Simple Guide to Consumer Solar Panel Installation
Implementing the Best Sustainable Construction Practices with Timber
The Triumphant Turnaround of Tesla Motors
10 Perfect Zero Waste Christmas Gifts To Give This Year
Understanding the Horrifying Hazards of E-Waste 101
The Terrifying Effects of Polyester on the Environment and Our Health
Sustainability is Transforming the Diamond Industry
Massive Technological Advances Create a New Era for Sustainable Farming
4 Sustainable Real Estate Renovations to Complete Before Renting Your Home
Stunning Advances in Battery Storage Technology Drive Future of Sustainability
5 Myths About Lab-Grown Diamonds Debunked
- Editors Choice10 months ago
10 Green Companies With Amazing Environmental Initiatives
- Environment12 months ago
How You Can Celebrate An Environmentally Friendly Christmas Or Holiday
- Features10 months ago
5 Sustainable Home Improvement Ideas To Improve Your Home’s Value
- Energy10 months ago
10 Amazing Energy Saving Hacks for Spring