Lloyds Banking Group Plc (LYG: Quote, LLOY.L) said Thursday that it would provide a further update on the proposed, European Commission-mandated, sale of retail and commercial business divestment or the Verde business to Co-Operative Group. The bank had earlier promised to reach an agreement with Co-Op in the first quarter, however now plans to update in the second quarter.
However, bailed-out Lloyds said it remains on track to complete the transfer of the Verde business before the end of 2013 in line with the EC mandated timescale.
Lloyds said that while its preference to sell the Verde business to the Co-operative Group remained strong, it nonetheless continues to prepare for a divestment through an Initial Public Offering.
Lloyds last year announced talks with the Co-Operative Group to sell 632 retail bank branches. But the deal has to pass the muster of UK regulators, who are expected to scrutinize the financial soundness, board expertise, and business plan of the Co-Operative Group.
Additionally, Lloyds, which is partly owned by the British government, also announced the key operational sites which will join the Verde business. The sites in question will provide telephony, banking operations and mortgage center support to the Verde business, and are located in Gloucester, Livingston, Birmingham, Sunderland and Swansea. Lloyds said that about 1,400 colleagues in these locations will become part of the Verde business.
Lloyds also announced the creation of around 500 new roles in the Verde business and the start of the recruitment process to fill these roles.
Alison Brittain, group director, Retail Division said, "This represents the next step in building the Verde business following last year's branch network and management team announcement, and marks a significant milestone in building a fully operational challenger bank, well positioned for a successful future."
Lloyds is pruning its non-core assets to improve its financial standing, and has reduced assets by 53 billion pounds last year. It has also sought buyers for loans, mostly a legacy of the takeover of HBOS in 2008.
LYG is trading at $2.19, down $0.06 or 2.67%, on the NYSE.
LLOY.L closed Thursday on the LSE at 35.25 pence, down 0.62p or 1.71%, on a volume of about 194 million shares. In a 52 week range, the stock has been trading between 21.64p and 63.40p.
by RTT Staff Writer
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