Lloyds knew bad news was inevitable. A forced sale, in a depressed market, with only one and a half bidders, was never going to secure a decent price. Even against this undemanding yardstick, however, the proceeds from transferring 632 branches to the Co-op count as miserable.Force majeure applies however and, in the longer term, the Co-op may prove to be a satisfactory home. Lloyds is still too big and, sooner or later, unbundling Halifax/Bank of Scotland from the remaining Lloyds operation must be on the cards (hopefully at a better price).
Lloyds, under Project Verde – the name for Lloyds Banking's enforced sale of hundreds of its branches – is getting only £350m at first, against an original dream of £1.5bn, albeit the size of the asset book has been cut. It is also underwriting the debt the Co-op is raising to do the deal.
Long-suffering shareholders in the old Lloyds TSB, the pre bailout bank, have been stung twice – once when their former board paid an absurd sum in 2008 to tow away HBOS; and now to satisfy the European commission's state-aid rules.
To add salt to the wound, the TSB brand is being thrown into the job-lot.
More info on the Co-op transfer here.