Lloyds Banking Group to sell 632 branches to Co-operative

Lloyds Banking Group plc has agreed to sell its 632 branches, including all its Cheltenham & Gloucester branches, all Lloyds TSB Scotland branches and some of its Lloyds TSB branches in England and Wales, to the Co-operative Group plc under the mandated retail and commercial divestment known as Verde.

The deal will help Co-operative get 4.8 million Lloyds and Cheltenham & Gloucester customers that come with those branches, including 3.1 million current account customers and 100,000 business customers.

The plan is expected to be completed by the end of November 2013.

 ''Today's agreement is an important step in meeting our obligations under the mandated sale of our branches,'' said Antonio Horta-Osorio, Lloyds Group chief executive.

Under the heads of terms, the Co-operative will pay the Lloyds Group an initial consideration of £350 million, and up to an additional £400 million in present value – equivalent to around £800 million on a nominal basis – based on the performance of the Co-operative's combined banking business from completion up to 2027.

The Verde business will have approximately £11 billion of risk weighted assets on a standardised basis.