28 June 2012
What is happening
As you probably know, Cheltenham & Gloucester is part of Lloyds Banking Group.
As a result of the state aid received by Lloyds Banking Group in 2009, the European Commission ruled that we should sell part of our business to a new owner. The aim of the ruling is to increase competition and customer choice in the UK banking sector. So we’re transferring part of our business, including some of our branches and most of the accounts held at them, to a new owner.
On 27 June 2012, we announced that Lloyds Banking Group had reached an understanding with The Co-operative Group on the commercial terms for the sale of part of our business. We will now enter into a final phase of discussions aimed at signing a ‘Heads of Agreement’. This is subject to agreeing satisfactory documentation, the approval of our Board and the Board of The Co-operative Group and further discussions with the FSA, HMT (‘the Treasury’) and the European Commission. During this period we will re-enter exclusive talks with The Co-operative Group.
The Heads of Agreement document is a non-binding agreement that outlines the broad commercial terms and what will be included in the final sale. It sets out both parties’ agreement in principle to what the sale will include, and their roles and responsibilities before during and after the transfer should part of our business transfer to The Co-operative Group in 2013. The Heads of Agreement could ultimately lead to the signing of a legally binding Sale & Purchase Agreement (SPA).
If we reach a formal agreement with The Co-operative Group, some of our branches and accounts will become part of The Co-operative Group’s banking business.
You don’t need to do anything
If you are directly affected by the transfer we’ll be writing to you after the SPA is signed, to let you know what the transfer means for you. You don’t need to do anything differently as there will be no changes for some time and we will keep you up to date at every stage. Your branch will not close as part of the transfer, and you can carry on banking just as you do now.
Once the transfer is complete, the customers and staff in the selected branches will stay with those branches - so the same staff will still be there to provide with the same level of service, in the same place, just under new ownership.
Continuing to look after our customers
Our branch staff will carry on providing the same level of service that you’re used to, and you can carry on your day-to-day banking in the same way. No branches are closing as part of the transfer.
We’ll continue our discussions with The Co-operative Group to progress with preparing part of our business for the transfer. If the transfer to The Co-operative Group is agreed, some of our branches and accounts will become part of The Co-operative Group’s banking business. They’ll have over 900 high street branches and be a leading bank in the UK. The Co-operative Bank has a strong record in delivering good customer service and competitive products that customers want and value.
What are ‘Heads of Agreement’?
The ‘Heads of Agreement’ is a document setting out the main agreed terms between the parties in a commercial transaction. It is not a legally binding document.
In this instance, the ‘Heads of Agreement’ is an agreement between Lloyds Banking Group and The Co-operative Group, setting out the specifics of the sale, what’s required to complete the deal, and the roles and responsibilities of each party.
Does this mean that the deal with The Co-operative Group is going ahead?
The announcement is a statement of intent to complete the transfer of part of our business to The Co-operative Group and a key step forward in the sales process, but it is not legally binding. There is still a lot of work to do before a final agreement is reached, and our priority throughout our negotiations will be to achieve the best outcome for our customers, staff and shareholders.
How can I find out if my branch will be transferred?
All C&G branches are included in the sale, plus all Lloyds TSB Scotland branches and some Lloyds TSB branches in England and Wales. If you’d like to know which branches are transferring please go follow the link at the bottom of the page.
Do I need to change how I bank?
You can carry on banking just as you do today. We’ll keep you fully informed if there are any changes that might affect you well before they happen.
Why haven’t I been sent a letter about this?
We will be writing to all customers who are directly affected by the transfer once we reach a legally binding agreement. If your account is included in the transfer there will be no changes for some time and your branch will not close as part of the transfer. You don’t need to do anything and you can carry on banking in the same way as you do now. We’ll let you know about any changes that affect you well before they happen, and we’ll be working to make the transfer as smooth as possible.
We’ll be updating our website with further information throughout the process, so check for updates in the future.
You can find a list of the branches that will be included in the transfer here.
