19th July 2012 Update: Co-op are buying 632 Lloyds bank branches. The Co-op bank will also be taken on the 4.8 million Lloyds customers who will have their accounts transferred to the Co-op. The Co-op will now control around 7% of retail banking current accounts.
If you are in the market for your own retail bank then now is a good time to buy. Lloyds are in the process of contacting possible buyers for 600 of its retail / high street banks which it has been ordered to sell off by regulators.
“We are contacting potential buyers,” Chief Executive Antonio Horta-Osorio told shareholders at the bank’s annual general meeting on Wednesday.
So if you want a high street bank then get in touch with Antonio!
One thing you learn after working in the City is that everything has to have a project name. Project Verde is the name for the selling off of Lloyds banks.
So why is Lloyds selling off 600 banks? Well, it is now partly owned (41%) by the state. It has also been hit with a £3.2 billion fine for mis-selling PPI (payment protection plans) policies. This bill means that Lloyds is now £3.47 billion in debt. Selling 600 retail banks could potentially halve this debt, depending on the value of prime real estate at the moment.
However, it is the European regulators who have demanded that Lloyds sell off 600 branches. It is also thought that 600 branches may just be the beginning, it may well sell more in the future.
At the moment we do not know who is being contacted regarding these retail units. It could be contacts within the leisure industry as city centre banks often provide exciting opportunities for chain pubs such as Weatherspoons who operate in some large ex-banks such as the The Crosse Keys on Gracechurch Street, formerly the HQ of the HSBC and The Standing Order in Edinburgh, which was previously Union Bank of Scotland.
Remember though, the long term plan of the government is to sell off Lloyds and RBS entirely to a third party.