NBNK back in play as Lloyds deal with Co-op goes off boil

Published on 02/04/2012 00:00

NBNK Investments, the company set up to start a high street bank in the UK, is expected to refresh efforts to buy more than 600 branches from Lloyds Banking Group this week as negotiations to sell to the Co-operative Group falter.

The Manchester-based Co-op was chosen as the preferred bidder for the branches in December but closure of the deal has been frustrated by regulatory concerns. It is understood that the period of exclusivity between Lloyds and the Co-op lapsed last week, giving NBNK fresh opportunity to approach the bank again.

NBNK was set up in 2010 by City grandee Lord Levene to buy the 632 branches that Lloyds was forced to put up for sale by the European Commission under state aid rules. It is thought the Financial Services Authority which must approve the sale, would be more likely to give the green light to the Co-op, which has been running a bank for more than 100 years.

But the watchdog is understood to have concerns about the structure of the bank’s management and how it will fund the acquisition.