‘Newcomer’ in £1.5bn Lloyds bid

NBNK, the banking industry consolidation vehicle formed last year to build a high street presence, is bidding about £1.5 billion for the 632 Lloyds Banking Group branches up for auction.

Sources close to the takeover talks said yesterday that a bid would be in by close of play last night, two days ahead of Friday’s unofficial deadline for the second round of bidding.

The other shortlisted bidders for the Lloyds assets are Sun Capital, the financial investment firm fronted by business turnaround specialist Hugh Osmond, and Co‑operative Financial Services.

It is believed the two other bidders are yet to submit their offers for the branches, whose sale was ordered by the European Commission in return for the £17bn state bailout of Lloyds following its takeover of HBOS three years ago. That left the taxpayer with a 41 per cent stake in Lloyds.

NBNK, chaired by City grandee Lord Levene, left, has received billions of pounds of backing from a group of leading financial institutions to drive consolidation. They include Invesco, Aviva Investors, F&C Asset Management and JP Morgan. However, a recent takeover approach by NBNK to Clydesdale Bank and Yorkshire Bank was rebuffed.

It is believed that NBNK, whose chief executive Gary Hoffman was parachuted in as boss of Northern Rock when it was taken into state ownership, will exercise the option to buy fewer mortgages and other loans than were originally on offer from Lloyds.