22 December 2011
What’s happening and why
As you probably know, Cheltenham & Gloucester is part of Lloyds Banking Group – and you may have heard about the requirement for the Group to increase competition in the UK banking sector by transferring part of our business to a new owner.
On 14 December 2011, we announced that The Co-operative Group is the preferred bidder, and we are taking forward exclusive negotiations with them. We hope that these discussions will lead to an agreement by the end of March 2012. At the same time we’re also continuing to pursue the option of an Initial Public Offering (IPO), where shares in a new bank would be offered to investors through a public flotation.
The reasons for the sale go back to 2009, when Lloyds TSB acquired Halifax Bank of Scotland and Lloyds Banking Group, which includes Cheltenham & Gloucester, was created. As a result of the state aid received by Lloyds Banking Group, the European Commission ruled that we should sell part of our business to a new owner by November 2013. The aim is to increase competition in the UK banking sector and create a successful new bank.
The sale includes all Cheltenham & Gloucester branches, some Lloyds TSB branches in England and Wales and most of the accounts held there, all Lloyds TSB branches in Scotland and Intelligent Finance.
All branches will remain as Cheltenham & Gloucester branches until 2013 and will carry on providing the same level of service that you’re used to, with the same range of products and services so you can carry on your day-to-day banking in the same way.
Once the transfer to the new owner is complete, both staff and customers will move to the new bank. So if you are transferring, you’ll still be welcomed by the same people you deal with now, in the same place, just in a new bank.
Next steps
We’ll continue our discussions with The Co-operative Group. We’ll also carry on looking at the option of an IPO, where we’d offer shares in a new bank to investors through a flotation on the London Stock Exchange.
The Co-operative Group has a strong record in delivering excellent customer service and products that customers want and value. If the sale is agreed, they would have over 1,000 high street branches and significant growth potential, making them a strong bank and helping to increase competition in the UK banking sector. Any sale or IPO is subject to regulatory approval.
Keeping you up to date
We’ll be writing to let you know what this means for you, and keeping you up to date at every stage. There will not be any changes for some time though, and you can carry on banking as normal. And we’ll be updating our website with further information throughout the process, so check for updates in the future.
