We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
C&g - co-op
meatandtwoveg
Posts: 390 Forumite
http://www.guardian.co.uk/business/2012/jul/19/co-op-lloyds-branches-high-street-bank
Thoughts.....
I am a C&G customer......
A shakeup of high street banking was heralded on Thursday after the Co-operative clinched a cut-price deal to take on 632 Lloyds Banking Group branches and triple its presence on the high street.
Lloyds, 40% owned by the taxpayer, altered the terms to push through the sale to the Co-op after months of delays and on-off negotiations. It will result in a loss of at least £750m for the bailed-out bank, which is also providing sweeteners for the Co-op.
Some 3.4 million Lloyds customers will transfer to the Co-op along with up to 7,000 staff who currently work in the branches which will be branded TSB – the name of the Trustee Saving Bank, the one-time mutual taken over by Lloyds in the 1990s. Cheltenham & Gloucester is also in effect being remutualised as it is also part of the transaction. The deal is still subject to regulatory approval in the UK and the EU, which demanded the transaction take place.
In what City analysts said was in effect a reverse takeover of the Co-op, the management for the enlarged bank will be provided by Lloyds, which is also providing the financing for the deal, which will not be paid out in full until 2027.
Peter Marks, chief executive of the Co-op group, which will be transformed by the transaction, said people had "lost trust in the financial services industry" and the mutual could offer an alternative, particularly at a time of scandals facing Barclays over Libor. He said in the past six weeks there had been a 60% increase in customers "banging on our doors, wanting to join us".
George Osborne was quick to welcome the deal, which will create a 1,000-strong branch network with a 7% share of current accounts – the next biggest competitor to the big four high street lenders.
"The sale of hundreds of Lloyds branches to the Co-operative creates a new challenger bank and promotes mutuals," the chancellor said.
The City minister Mark Hoban is understood to have worked behind the scenes to facilitate the deal between Lloyds and the Co-op to promote the mutual sector, holding as many as 30 meetings including discussions with the EU, which has forced the sale of the branches because of the £20bn of taxpayer money used to bail out Lloyds.
The bailed-out bank insisted the deal was the best available, preferable to a flotation of the branches or a sale to NBNK, a bid vehicle run by the former Northern Rock boss Gary Hoffman.
The Co-op will pay just £350m initially for the branches through an issue of bonds which will be underwritten by Lloyds and guaranteed in perpetuity by the bank in a highly unusual move.
Another £400m could be handed over by 2027 while Lloyds is also providing £1.5bn for the branches, which have been known as Verde but will now see the TSB brand return to the high street.
Marks, the Co-op chief executive, who warned in March that a deal might not be done, admitted it could take years for the branches to be completely separated from the Lloyds systems and would give no timetable for when the new-look TSB branches would be rebranded into the Co-op.
Lloyds is to provide the computer systems for the branches being sold, in effect acting as outsourcer to the Co-op. David Fleming, the Unite union national officer, welcomed the transaction as bringing "to an end a long period of uncertainty for the staff who will welcome the clarity this decision will bring".
Antonio Horta Osorio, the Lloyds chief executive, said the agreement was an "important step in meeting our obligations under the mandated sale of our branches". Lloyds will continue to get a share of the business, which will be rebranded to TSB during summer 2013. The actual split of the business may not take place until November – the deadline set by the EU.
Gary Greenwood, analyst at the stockbroker Shore Capital, said the deal had been altered to facilitate the sale. "The shape and size of the business being transferred is different to that originally envisaged, being both smaller (only £24bn of assets versus £64bn originally) and match funded (the original disposal group had a £32bn funding gap) … a necessity in our view, if the Co-op was ever going to be able to reach an agreement," he said.
"The Co-op will pay nominal consideration of £800m (of which only £350m will be paid up front), which is below the £1bn that had been recently suggested in the media but well below the original expectation of £1.5bn (albeit that was based on a bigger asset base being sold)," he added.
The deal had to be negotiated to ensure there was no funding gap between the deposits and loans being sold. Among the businesses which Co-op rejected was Intelligent Finance, the quirky business set up during the dotcom boom which will now be wound down. This will reduce the amount of current accounts being sold slightly from the 4.6% originally put up for sale.
As a result of the changes, analysts at UBS pointed out that "the disposal is not expected to have a material impact on residual Lloyds profitability" as had initially been expected.
"We believe the deal has been structured this way to ensure the Co-op, which as a mutual does not have access to equity funding, is able to fund and complete the deal," the UBS analysts said.
Thoughts.....
I am a C&G customer......
A shakeup of high street banking was heralded on Thursday after the Co-operative clinched a cut-price deal to take on 632 Lloyds Banking Group branches and triple its presence on the high street.
Lloyds, 40% owned by the taxpayer, altered the terms to push through the sale to the Co-op after months of delays and on-off negotiations. It will result in a loss of at least £750m for the bailed-out bank, which is also providing sweeteners for the Co-op.
Some 3.4 million Lloyds customers will transfer to the Co-op along with up to 7,000 staff who currently work in the branches which will be branded TSB – the name of the Trustee Saving Bank, the one-time mutual taken over by Lloyds in the 1990s. Cheltenham & Gloucester is also in effect being remutualised as it is also part of the transaction. The deal is still subject to regulatory approval in the UK and the EU, which demanded the transaction take place.
In what City analysts said was in effect a reverse takeover of the Co-op, the management for the enlarged bank will be provided by Lloyds, which is also providing the financing for the deal, which will not be paid out in full until 2027.
Peter Marks, chief executive of the Co-op group, which will be transformed by the transaction, said people had "lost trust in the financial services industry" and the mutual could offer an alternative, particularly at a time of scandals facing Barclays over Libor. He said in the past six weeks there had been a 60% increase in customers "banging on our doors, wanting to join us".
George Osborne was quick to welcome the deal, which will create a 1,000-strong branch network with a 7% share of current accounts – the next biggest competitor to the big four high street lenders.
"The sale of hundreds of Lloyds branches to the Co-operative creates a new challenger bank and promotes mutuals," the chancellor said.
The City minister Mark Hoban is understood to have worked behind the scenes to facilitate the deal between Lloyds and the Co-op to promote the mutual sector, holding as many as 30 meetings including discussions with the EU, which has forced the sale of the branches because of the £20bn of taxpayer money used to bail out Lloyds.
The bailed-out bank insisted the deal was the best available, preferable to a flotation of the branches or a sale to NBNK, a bid vehicle run by the former Northern Rock boss Gary Hoffman.
The Co-op will pay just £350m initially for the branches through an issue of bonds which will be underwritten by Lloyds and guaranteed in perpetuity by the bank in a highly unusual move.
Another £400m could be handed over by 2027 while Lloyds is also providing £1.5bn for the branches, which have been known as Verde but will now see the TSB brand return to the high street.
Marks, the Co-op chief executive, who warned in March that a deal might not be done, admitted it could take years for the branches to be completely separated from the Lloyds systems and would give no timetable for when the new-look TSB branches would be rebranded into the Co-op.
Lloyds is to provide the computer systems for the branches being sold, in effect acting as outsourcer to the Co-op. David Fleming, the Unite union national officer, welcomed the transaction as bringing "to an end a long period of uncertainty for the staff who will welcome the clarity this decision will bring".
Antonio Horta Osorio, the Lloyds chief executive, said the agreement was an "important step in meeting our obligations under the mandated sale of our branches". Lloyds will continue to get a share of the business, which will be rebranded to TSB during summer 2013. The actual split of the business may not take place until November – the deadline set by the EU.
Gary Greenwood, analyst at the stockbroker Shore Capital, said the deal had been altered to facilitate the sale. "The shape and size of the business being transferred is different to that originally envisaged, being both smaller (only £24bn of assets versus £64bn originally) and match funded (the original disposal group had a £32bn funding gap) … a necessity in our view, if the Co-op was ever going to be able to reach an agreement," he said.
"The Co-op will pay nominal consideration of £800m (of which only £350m will be paid up front), which is below the £1bn that had been recently suggested in the media but well below the original expectation of £1.5bn (albeit that was based on a bigger asset base being sold)," he added.
The deal had to be negotiated to ensure there was no funding gap between the deposits and loans being sold. Among the businesses which Co-op rejected was Intelligent Finance, the quirky business set up during the dotcom boom which will now be wound down. This will reduce the amount of current accounts being sold slightly from the 4.6% originally put up for sale.
As a result of the changes, analysts at UBS pointed out that "the disposal is not expected to have a material impact on residual Lloyds profitability" as had initially been expected.
"We believe the deal has been structured this way to ensure the Co-op, which as a mutual does not have access to equity funding, is able to fund and complete the deal," the UBS analysts said.
0
Comments
-
If you're with C&G then it should have no impact on you at all.
If I was a Lloyds customer and was happy with them I wouldn't be over the moon being passed over to another company. I wonder how many will move back to Lloyds?Remember the saying: if it looks too good to be true it almost certainly is.0 -
If I was a Lloyds customer and was happy with them I wouldn't be over the moon being passed over to another company. I wonder how many will move back to Lloyds?
My crystal ball tells me the number who opt to remain with Lloyds will be at least equal to, and probably more than, the number who have multiple current accounts with Vantage
0 -
http://www.bbc.co.uk/news/business-22276082
Ummm, what now for a C&G customer, is this good or bad news?0 -
Nothing has changed for C&G customers. You might have had a bunch more branches but now you haven't. Back to square 1.0
-
As the TSB branding should be unaffected, they will increase from around 160ish C&G branches to over 600 TSB branches.Nothing has changed for C&G customers. You might have had a bunch more branches but now you haven't. Back to square 1.
I would guess offering wider banking services too.
They just won't be owned by Co-op.0 -
Not sure I understand what you are saying. The number of C&G branches is not changing. Previously C&G had been planning to take on Lloyds branches and customers but that has fallen through.opinions4u wrote: »As the TSB branding should be unaffected, they will increase from around 160ish C&G branches to over 600 TSB branches.
Instead Lloyds will rebrand the branches from "Lloyds" to "TSB" as a first step towards a sale/float on the open market but that has no effect on C&G customers.0 -
Got a three year stepped bond with the C&G, another 18 months to go, just worried about where the C&G are going, who will own them?
I liked the CO-OP, but now, who will be the umbrella bank? A floatation on the stock market, what does that mean for me?0 -
Not sure I understand what you are saying. The number of C&G branches is not changing. Previously C&G had been planning to take on Lloyds branches and customers but that has fallen through.
Instead Lloyds will rebrand the branches from "Lloyds" to "TSB" as a first step towards a sale/float on the open market but that has no effect on C&G customers.
C & G were never planning to take on anybody's branches, let alone Lloyds (which is their parent company).
The plan has long been for the C & G brand to disappear completely. Lloyds originally planned to close them all and make everybody redundant, but then the branch sale instruction came along from Europe and it was decided to include the C & G branches in the sale. The C & G brand will still disappear but the branches will now become TSB branches. Lloyds planned to sell the new TSB to the Co-op, but the sale has now fallen through, so they will be floating TSB on the stock market as an independent bank instead.0 -
Aaaaaaaaaaaah! It was me being dim. Thanks for the clarification.0
-
meatandtwoveg wrote: »Got a three year stepped bond with the C&G, another 18 months to go, just worried about where the C&G are going, who will own them?
I liked the CO-OP, but now, who will be the umbrella bank? A floatation on the stock market, what does that mean for me?
I'm in exactly the same position as you. I've spoken to someone at C&G who seemed very clued up on the situation and this is what I've been told:
Anyone who has a fixed rate account (fixed ISA or fixed Step Bond) will be staying with the Lloyds Banking Group, the account will be managed by Lloyds Banking Group and as of May enquiries for these accounts will be made to Lloyds Group, this is because as of May this year C&G are having to migrate away from the Lloyds Group, and C&G won't be able to access the fixed rate account details on their system, enquiries will have to be made to Lloyds Group (this was the reason that those of us with the step bond accounts were given new account numbers last year so they will migrate over onto the Lloyds system).
...........0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.8K Banking & Borrowing
- 254.5K Reduce Debt & Boost Income
- 455.6K Spending & Discounts
- 247.6K Work, Benefits & Business
- 604.6K Mortgages, Homes & Bills
- 178.6K Life & Family
- 262.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards