Lloyds deal hits Co–op credit rating

Credit rating agency Standard & Poor’s cut its outlook on mutually-owned conglomerate the Co-operative Group to “negative” from “stable” yesterday, due to risks associated with the Co-op’s planned purchase of some 630 Lloyds’ bank branches.

Earlier this month, Lloyds said it had picked the Co-op as its preferred bidder for 632 branches which it has been forced to sell by European regulators. S&P said the deal carried risks, partly because the Co-op is already in the process of integrating its takeover of Britannia Building Society.