Shortlisted duo ‘will fail to meet deadline’ for Lloyds auction

TWO of the shortlisted buyers for the auction of 632 Lloyds Banking Group branches will fail to meet today’s unofficial deadline for second round bids, The Scotsman has learnt.

Co‑operative Financial Services and Sun Capital, the US financial investment firm, have told Lloyds that, while still interested, they are some way short of submitting formal offers.

They contrast with the third shortlisted bidder, bespoke banking consolidation vehicle NBNK Investments, chaired by Lord Levene, which is widely understood to have submitted a £1.5 billion bid for the branches earlier this week.

None of the main bidders was commenting last night. But one source close to the auction said: “This has got to be a slight feather in the cap of NBNK, which has shown it could put together an offer in the timeframe indicated in the auction.”

However, it is understood both the Co‑op, which already as a near‑3 per cent slice of the UK high street banking market, and Sun Capital both believe their approaches will not be harmed by missing what one insider called “a soft deadline”.

One insider said: “Antonio Horta‑Osorio [Lloyds’s chief executive] wants to identify the winner by the end of the year. But clearly the suitors left in the frame consider getting it right more important than doing things rushed, and it has never been Lloyds itself saying this week was the definite deadline. I think we could be talking about two or three weeks at least before the rival offers to NBNK are in. I don’t think Lloyds will be overly fussed by that.”

Both Sun Capital, which like NBNK has no UK banking network, and the Co‑op are understood to have told Lloyds that not making today’s deadline in no way affects their strong interest in taking over the branches.