Update on 24th April 2013

Lloyds Banking Group provided an update on 24th April 2013 regarding the transfer of part of its business to a new owner. The transfer follows a ruling by the European Commission (EC) in 2009 to increase competition and customer choice in the UK banking sector.

The Group had previously announced it had agreed Head of Terms with The Co-operative Group over the purchase of part of Lloyds Banking Group known by the project name ‘Verde’.

The Group has been informed by The Co-operative Group plc that despite the commitment of both parties to the transaction, The Co-operative Group Board has decided that they can no longer proceed with the purchase.

The Group now intends to divest Verde through an Initial Public Offering (IPO), having maintained this option throughout the process in order to ensure best value for our shareholders and certainty for our customers and colleagues.

IPOs are commonly used by either small or large companies to raise capital and become publicly traded enterprises. These companies’ shares are then listed on places such as the London Stock Exchange and can be bought and sold by investors. It is expected that the IPO will be subject to regulatory and EC approval, and an update on the timing of an IPO will be given in due course.

There is no impact on customers’ banking arrangements following today’s announcement.

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 Group continues to make good progress in the creation of Verde as a stand-alone bank. A strong management team is in place and we have made good progress in creating segregated IT systems for Verde on the proven Lloyds Banking Group platform and in building the necessary corporate functions to support front-office colleagues, branches and the operational sites already identified. Detailed plans are in place for a rebranding of the business as TSB which will be visible on the High Street during the summer this year. At this point the TSB Bank (Verde) will be operating as a separate business within Lloyds Banking Group.

António Horta-Osório, Chief Executive of Lloyds Banking Group said: “We are well advanced in our plans to bring the Verde business to the UK High Street during the summer through the TSB Bank, and will now proceed with the option to IPO the business, subject to the necessary approvals. The TSB Bank will be an attractive retail and commercial bank that will have around 630 branches across the UK, a strong management team and will be a real challenger on the high street.”

Questions you may have.

The Co-operative Group has pulled out of talks about the purchase of part of Lloyds Banking Group – what does that mean?

There is no change to the current plan to transfer some branches and customer accounts to TSB. We continue to make good progress to launch TSB Bank onto the UK high street during the summer. The TSB Bank will be an attractive retail and commercial bank that will have around 630 branches across the UK, a strong management team and will be a real challenger on the high street.

What does this mean for customers?

There is no impact to customers’ banking arrangements following today’s announcement. We will continue to keep customers notified of any changes that affect them in the future. As we prepare the business for an IPO, we will keep customers informed of any important updates. We anticipate that an IPO process itself would have a minimal impact on customers.

Will today’s announcement affect the way that customers do their banking?

No. There is no impact on customers’ banking arrangements following today’s announcement. 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 working to make the transfer as smooth as possible.

What is an IPO?

An Initial Public Offering (IPO) or stock market launch is the first sale of stock by a private company to the public. This is sometimes known as ‘going public’. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises. Many companies that undertake an IPO also request the assistance of an investment banking firm acting in the capacity of an underwriter to help them correctly assess the value of their shares. The price of the stock or shares will be determined by financial advisors who will be appointed as underwriters and to manage the sale of the shares to investors. At such a point when TSB Bank plc shares are listed on the London Stock Exchange, the money paid by investors for the newly issued shares would go directly to the Lloyds Banking Group.

After 26 July 2014, services available to Lloyds Bank customers at TSB branches and TSB customers at Lloyds Bank branches will change. To find out more, please select from the links opposite.

It's easy to see the branches that are TSB branches, with our branch checker.

If you have questions about the move of some branches and accounts to TSB, you’ll find many of the answers in Key questions.

If you would like to speak to someone about these changes, call us on 0800 028 0428, we'll be happy to help. Lines are open from 8am to 8pm Monday to Friday and from 9am to 5pm at weekends.