Stornoway’s Lloyds TSB branch on Francis Street will become part of the TSB Bank which will be floated on the stock market later this year after The Co-operative Bank pulled out of a deal to buy over 600 branches across the UK.
Lloyds Group will divest the 632 branches through an Initial Public Offering (IPO) whose shares are listed on the stock market and can be bought and sold by investors, however they stress there is no impact on customers’ banking arrangements.
In a statement on the Lloyds website, it notes: “Customers don’t need to do anything and can carry on banking in the same way as they do now, accessing their accounts as usual via the branch, telephone and online banking. We are committed to working to make the transfer as smooth as possible. We will continue to update customers during this process.”
The Co-operative Group blamed the economic climate for their withdrawal from the deal.
Peter Marks, Chief Executive of the Group said: “ After detailed and thorough consideration of all aspects of the Verde transaction, we have decided, at this time, that it is not in the best interests of our members to proceed with the transaction.
“Having worked closely and constructively with Lloyds we are naturally disappointed to have reached this conclusion.
“Against the backdrop of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general, the Verde transaction would not currently deliver a suitable return for our members within a reasonable timeframe and with an acceptable level of risk.”
In 2008, Lloyds Banking Group was forced to divest 632 branches under EU rules, following the need for state aid. The sale was supposed to be completed by November 2013 and about 7,500 staff will be part of the divestment.
Unions have already expressed concerns about the situation.
Unite national officer, Dominic Hook said: “The staff at the branches, which are up for sale, will be very anxious - they need certainty. All too often ordinary staff who are on the front line of customer service, are overlooked. Unite is calling on the government and Lloyds to do everything possible to create options that will support UK banking, give customers choice and protect staff. The last thing staff and customers need is a fire sale of the branches which could lead to them falling into the wrong hands.”