The Co-operative says in a statement it has pulled out because of the “worsened outlook for economic growth” and “increasing regulatory requirements” in the UK. Concern the deal, agreed just under a year ago, could collapse has been mounting since Co-op put its insurance arm up for sale last month to strengthen its finances.
Lloyds will now sell the branches through an initial public offering (IPO). The flotation will need to be cleared by the European Commission, however, which has demanded the sell-off after Lloyds Banking Group received state aid in 2009.
Lloyds says in a statement that it will press ahead with the rebrand of the branches to TSB over the summer . There had a question mark over whether Co-op was going to keep the TSB brand or rebrand them to match its existing network.
The baking group, which also owns the Lloyds, Halifax and Bank of Scotland brands, is building a team of senior marketing personnel to develop branding, product and price propositions for TSB. It is being positioned as an ethical, community bank. Early marketing literature described the TSB as “the new face of banking” that will focus on retail and small business customers only.
A campaign to raise awareness of the name change is expected in the next few months. Advertising agency Joint, the start-up led by former Rainey Kelly Campbell Roalfe/Y&R executives Richard Exon and Damon Collins, has created the campaign.
The TSB brand disappeared from the high street in 1995 following the merger of the TSB Group with Lloyds.