New British bank venture NBNK and the mutually owned Co-operative Group have been shortlisted by Lloyds as prospective buyers of the 630 retail bank branches which it has been told to sell, sources with knowledge of the situation said.
Lloyds said on Wednesday that it had received three formal offers for the assets and had decided to take forward discussions with two bidders, in a process which the part-nationalized British bank has code-named “Project Verde.”
Lloyds did not identify who those bidders were, but the sources told Reuters that they were NBNK and Co-op’s financial services arm. Sources have also said that the assets could be worth between 1 billion pounds and 1.5 billion pounds ($1.6-$2.35 billion).
Lloyds has been forced to sell the branches by European competition regulators to compensate for it having been bailed out by the British government during the credit crisis.
However, the sale has drawn muted interest because the ongoing market turmoil caused by Europe’s sovereign debt crisis has impacted the valuation of the branches, and Lloyds reiterated it could opt to spin off or float the Verde assets.