27 February 2017
Visit EBAday.com

Lloyds to run IT for Co-op branch network

19 July 2012  |  5689 views  |  0 Lloyds TSB branch

The bargain-basement acquisition of 632 Lloyds bank branches and 754 ATMs by the UK's Co-operative group includes a long-term technology services agreement between the two parties.

Under the agreement, the Co-op will acquire 4.8 million customers and a £24 billion balance sheet for a knock-down price of just £350 million upfront. The combination of the Co-op's existing network with Lloyds TSB and Cheltenham & Gloucester brands will result in a total of 1000 branches, representing a ten per cent share of the UK network, and a seven per cent share of all UK current account customers.

Lloyds, which has been forced into the fire sale by regulators as payback for a state-funded bail-out in 2008, had been hoping to realise £1.5 billion from the disposal. The bank stands to earn an additional £400 million earn-out depending on the performance of the business over the next 15 years.

As part of the deal, the combined bank will ultimately operate on a separated version of Lloyds' proven IT platform, managed under a long-term service agreement. This was considered a key provision by regulators, to avoid the risks of disruption to existing customers from a technology handover.

It is anticipated that the earliest point at which the migration of the existing Cooperative Banking systems to the LBG IT platform would begin is 2015. The outsourcing deal will be operated "under commercial market terms", says the Co-op.

The Co-op says the new business will provide a challenger bank capable of providing real competition and a genuine alternative to the dominance of the big four banks on the high street.

The Forum of Private Businesses welcomed the deal. Senior policy advisor Alex Jackman, says: "This could be a really significant development for small firms looking to restore traditional relationship banking, where the tick box lending criteria approach will hopefully have no place.

"Co-op is already a respected high street name with great ethical standards and credentials most other banks can only dream of. If this deal goes through it could genuinely be a fresh new era for high street lending for SMEs - something we have long been calling for."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Lloyds cuts 100 IT jobs, offshores 300

Lloyds cuts 100 IT jobs, offshores 300

13 March 2012  |  5734 views  |  0 comments
Lloyds cuts 570 jobs; looks to outsourcing

Lloyds cuts 570 jobs; looks to outsourcing

18 March 2011  |  10792 views  |  0 comments
Lloyds payment failure hits New Years Eve revellers

Lloyds payment failure hits New Years Eve revellers

06 January 2011  |  10683 views  |  0 comments
Co-op taps Clear2Pay for payments overhaul

Co-op taps Clear2Pay for payments overhaul

20 October 2010  |  10171 views  |  0 comments
Lloyds to chop 4500 IT jobs

Lloyds to chop 4500 IT jobs

13 October 2010  |  11062 views  |  0 comments
Co-op Bank tops UK sales site table

Co-op Bank tops UK sales site table

17 June 2010  |  12746 views  |  0 comments
Co-op and Nationwide outshine rivals online - research

Co-op and Nationwide outshine rivals online - research

25 February 2010  |  7180 views  |  0 comments
Co-op to replace online business banking system after customer complaints

Co-op to replace online business banking system after customer complaints

16 November 2009  |  5423 views  |  0 comments
IT staff to go as Lloyds cuts another 5000 jobs

IT staff to go as Lloyds cuts another 5000 jobs

10 November 2009  |  8457 views  |  0 comments
Direct Line and Intelligent Finance on the block in UK banking shake-up

Direct Line and Intelligent Finance on the block in UK banking shake-up

03 November 2009  |  11659 views  |  0 comments
IT staff in firing line as Lloyds plans another 1200 job cuts

IT staff in firing line as Lloyds plans another 1200 job cuts

16 July 2009  |  7317 views  |  0 comments
Lloyds cuts 1660 jobs and closes all C&G branches

Lloyds cuts 1660 jobs and closes all C&G branches

09 June 2009  |  7442 views  |  2 comments
Direct channel integration costs 210 Lloyds jobs

Direct channel integration costs 210 Lloyds jobs

22 May 2009  |  8978 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit Yelloco.co.ukvisit dh.com

Who is commenting?

Top topics

Most viewed Most shared
EBA to relax controversial PSD2 authentication rulesEBA to relax controversial PSD2 authentica...
13293 views comments | 52 tweets | 74 linkedin
RBS to become fintech fund and high street outlet for challenger banks under HMT remedyRBS to become fintech fund and high street...
8743 views comments | 40 tweets | 34 linkedin
BNY Mellon seeks blockchain experts for new emerging biz and tech teamBNY Mellon seeks blockchain experts for ne...
7423 views comments | 7 tweets | 4 linkedin
hands typing furiouslyBlockchain Technology
7187 views 1 | 18 tweets | 7 linkedin
High rate of defaults hit P2P lending sectorHigh rate of defaults hit P2P lending sect...
7048 views comments | 19 tweets | 13 linkedin

Featured job

Six Figure Base + Commission + Stock Options
London

Find your next job