Co-op Bank happy with calibre of candidates for top job

There have been reports that Lloyds Banking Group’s sale of 632 branches to the Co-operative Group had run into difficulties because financial regulators were questioning the level of expertise on the suitor’s board.

However, the Yorkshire Post understands that the Co-operative Group has not received any instructions from the Financial Services Authority (FSA) about its structure.

Sources have told the Yorkshire Post that the Co-op is in “good, constant dialogue” with the FSA and Lloyds.

A Co-operative Group spokesman said yesterday: “We are making good progress in our search for a chief executive for the Co-operative Bank, with a strong list of candidates. We will update as and when appropriate.”

The Co-op was named as Lloyds preferred choice for the EU- enforced sale. It still does not have a chief executive for its banking division, which is supposed to oversee the Lloyds acquisition, which has been dubbed Project Verde.

Lloyds is being forced to divest the branches because of the £20bn in state aid it received following the 2008 financial crisis.

The assets being sold account for a 4.6 per cent share of the UK current account market and up to 19 per cent of the group’s mortgage book. There are five million customers and an estimated 9,000 employees.

The disposal plan is seen as a way of introducing a stronger challenger to the big five banking groups.

The bids by the Co-op and NBNK were thought to have been in the region of £1.5bn, but the Co-op was seen as slight favourite because it already runs a sizeable bank.

It acquired Britannia in 2009 and currently has a total of 343 branches and 6.5 million customers, including those with current accounts, mortgages and credit cards.

Virgin Money, which secured Northern Rock for £747m, was also reportedly involved in the auction.

The Co-operative Group is the UK’s largest mutual business. The group operates 4,800 retail trading outlets, employs more than 106,000 people and has an annual turnover of more than £13bn.