NBNK hopeful of Lloyds progress

Updated: 
Lloyds TSBA rival bidder has stepped up the pressure on the Co-op's purchase of 632 Lloyds branches by insisting it was ready to pursue a deal.

NBNK, which was set up with the intention of creating a new player in the retail banking market, said its own talks with Lloyds and the Financial Services Authority had made progress.

The Co-op was chosen as Lloyds' preferred bidder for the branches in December but hopes of signing a deal by the end of March were dashed due to protracted talks with regulators.

NBNK's proposal taps into the bank's "plan-B" option for a flotation. By underwriting any demerger it will give shareholders in Lloyds the choice between taking a new share in the branch business or accepting cash.

The company, which is headed by former Northern Rock boss Gary Hoffman, hopes to create a new nationwide entrant into high street banking which is able to compete with the incumbent providers.

It said in its annual report today: "NBNK can create what everyone wants: a safe, secure and successful UK-focused consumer and small business bank."

The Lloyds branches, known as Project Verde, are being sold as one of the conditions imposed by the European competition regulator on the taxpayer-backed bailout of the bank.

Mr Hoffman added: "Having continued to engage constructively with Lloyds, I believe we have provided sufficient information to enable negotiations to progress for the sale of Verde to NBNK."

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