Intelligent Finance future in EC’s hands

THE future of Intelligent Finance, the Scottish online bank, will be referred back to the European Commission, it emerged yesterday.Lloyds Banking Group is to hold talks with EC officials after IF was a surprise withdrawal from last week’s £750 million sale of assets to the
Co-operative group.

IF was included in the original parcel of assets which Lloyds was forced to sell in exchange for receiving rescue funding from the taxpayer.

The Co-op acquired 632 Lloyds branches, the TSB brand and the Cheltenham & Gloucester mortgage business, but rejected IF in order to reduce the liabilities it was prepared to take on to its balance sheet.

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A bank source said: “It was part of the original mandate so Lloyds will have to go back to the EC and find out what happens next.”

IF was launched 12 years ago as a pioneer of online banking and at its peak was valued at £700m and employed about 2,300 staff. It is now thought to employ about 1,000. The company was one of the businesses included in Lloyds acquisition of HBOS.

Jim Spowart, the Scot who founded IF, said the business could be sold or floated. He said he was not involved in any move to acquire it.

Lloyds is expected to show further progress strengthening its balance sheet when it reports half-year figures on Thursday.

The taxpayer-backed bank is forecast to report pre-tax profits of about £1.3 billion against a loss of more than £3bn a year earlier.