The Co-Operative Bank and Lloyds have finally come to an agreement that will result in 632 Lloyds branches being transferred over to Co-Operative ownership, along with the accounts and customers at those banks.
There are still some hurdles which need to be overcome, including the legal approval of the take over. The Co-Operative needs to prove that it is abiding by EU fair business practises, though there has been no indication that this will be a problem.
If the deal is successful, the face of the high street banking market will be forever changed; the Co-Operative will take control of around 7% of the current account market, which will be the biggest shake up in the world of high street banking in a generation.
The reason behind this sell-off by Lloyds is that the group must now abide by strict EU competition laws governing businesses which are state funded. Since Lloyds was one of the banks bought out by the tax payer following the credit crunch, they are affected by those rules. To ensure that state-owned companies do not dominate what are supposed to be open markets, there are strict limitations on what a company can and can not do.
The Co-Operative will not rebrand the branches it is taking over; instead, it will opt for a similar approach to the Britannia merger, where Britannia banks maintained their name, staff and products, but also offer Co-Operative products and are part of the Co-Operative group. Lloyds banks will revert to the TSB (Trustee Savings Bank) brand, a name that Lloyds absorbed in 1995 to become Lloyds TSB.
Customers should still be able to use their current accounts at their Lloyd branches and it is hoped many will not notice a sudden change, but will gradually become aware of the different services now available to them at their branches.