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Lloyds agrees terms on branch sale to Co-op

Lloyds Banking Group has confirmed that it has agreed terms with the Co-operative Group on the planned sale of more than 630 branches, with the two parties having entered a period of exclusivity on the transaction.

Reports last week had indicated that negotiations on the deal were stalled over the price Lloyds was seeking for the branches, which are collectively housed under the Verde brand, leading to speculation that the part-nationalised bank would lower its asking price.

The announcement, which brings to an end separate negotiations between Lloyds and new banking venture NBNK, paves the way for the two parties to move forward with a ‘heads of agreement’ in the coming weeks.

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The Verde business has 632 branches across the UK with around 5m customers, representing 6 per cent of the UK branch network.

According to Lloyds, when combined with the existing Co-op business the bank will represent 7 per cent of UK current accounts.

Lloyds said that the transaction remains subject to agreeing satisfactory documentation, the approval of their respective boards, and further discussions with the FSA, HMT and the European Commission.