Float or sale options both still open for Lloyds assets

SOURCES close to Lloyds Banking Group have rejected weekend reports that it is on the brink of pulling the sale of its Project Verde retail business in favour of a flotation.

It followed a weekend newspaper report that Lloyds chief executive Antonio Horta‑Osorio was dismayed at the valuation a straight sale of the group’s 600‑plus branches would achieve after banking consolidation vehicle NBNK Investments is thought to have recently offered £1.5 billion.

It was reported that a float – previously thought the least-likely option for Verde, which includes internet bank Intelligent Finance – was now a near‑certainty, with Lloyds talking to the UK Listing Authority (UKLA) to smooth the process.

But one source told The Scotsman yesterday: “The divestment of the branches has always been a dual-track process and it remains so.

“A sale remains very much an option and so does a possible flotation.”

It is understood that Lloyds is placing the necessary documentary for a possible flotation of the business with the UKLA, but that this is a formality to keep the option open rather than an indication of preference.

“Too much should not be read into this at all,” the source said.

The other two shortlisted suitors for the branches, the Co‑operative Group and Sun Capital, have yet to submit bids.

Lloyds is being forced to divest the branches by the European Union in return for the £20bn in state aid it received following the 2008 credit crisis.