LONDON (Reuters) – The Co-operative, Britain's largest mutually-owned business, paved the way for the purchase of 632 bank branches from Lloyds as it announced on Thursday that it planned to sell its general insurance arm to bolster its finances.
Lloyds must sell the branches, code named Verde, as a condition of receiving state aid during the 2008 financial crisis and the two parties said last June they had reached an understanding of the terms of a deal which would create a new competitor to Britain's established high street lenders.
Co-op has agreed to pay Lloyds up to 750 million pounds ($1.13 billion) for the branches, but issues relating to computer systems, funding and the tough economic backdrop have made the deal difficult to execute. Co-op's Chief Executive Peter Marks told reporters that there was “still a lot of work to do” to pull it off.
“We're trying to conclude this transaction in very difficult economic times. That's what makes it more difficult. We're trying to establish what the risks are and to mitigate those risks,” Marks told reporters on a conference call.
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