The Co-operative Bank is poised to take on the British high street's big lenders, after securing a cut-price deal to buy 632 branches from Lloyds Banking Group for £750 mln.
UK-LLOYDS COOP - There's one on almost every high street in Britain but soon 632 Lloyds bank branches could become part of the Co-Operative Group.
The deal, which is still to be approved by regulators, would give the Co-Op almost 5 million new customers - and increase its share of Britain's bank branch network from 4 to 10 percent.
Peter Marks is the Group's CEO.
SOUNDBITE: Peter Marks, Co-op Group CEO, saying
"There are large swathes of the UK where we don't have a presence. Scotland is a good example. So this deal gives us the opportunity to extend our reach. So at the moment we've got 340 branches, we're going to have a thousand branches and that gives a real competitive positioning."
Lloyds which is 40 percent owned by the UK government, was forced by European regulators to offload the branches as payback for being bail-out by the state.
But the £750 million being offered by the Co-Op is far less than the £1.5 billion expected.
Lloyds says it stands to make a loss on the sale, but that would be balanced out by lower capital requirements and there would be no lasting impact.
The deal is expected to be completed by the end of November 2013 making the Co-Op Britain's sixth biggest bank.
Hayley Platt, Reuters