Co-op’s purchase of 632 Lloyds branches has fallen through
The Co-operative is still looking for a buyer for its general insurance business despite suffering a setback in the development of its banking operations.
The society revealed this morning that its deal to buy 632 Lloyds Bank branches had fallen through.
The Co-op is selling its general insurance business to focus on its relationship banking offering.
However, a Co-op spokesman said that while the collapse of the deal meant the banking division would not expand as quickly as planned, the general insurance sale was unaffected.
He said: “That strategy hasn’t changed.”
In a statement, the Co-op said it had withdrawn from the deal to buy the Lloyds branches – the so-called Verde transaction – after it deemed the deal to be not in the best interests of members.
It said the decision reflected the current economic environment, the worsened outlook for economic growth and increasing regulatory requirements on the financial services sector.
Co-op group chief executive Peter Marks said: “The Verde transaction would not currently deliver a suitable return for our members within a reasonable timeframe and with an acceptable level of risk.”
Co-op is thought to be seeking £600m for its general insurance business. Aviva was rumoured to be looking at the firm, but observers have dubbed a sale to Aviva unlikely.
The company has already sold its life insurance and asset management arm to Royal London.
No comments yet