Lloyds To Hit Back Over Branch Sale Claims

Written By Unknown on Selasa, 18 Juni 2013 | 11.46

By Mark Kleinman, City Editor

The chairman and chief executive of Lloyds Banking Group will hit back on Tuesday at claims that they succumbed to political pressure to sell a major branch network to the Co-operative.

Sky News understands that Lloyds has submitted written evidence to the Treasury Select Committee (TSC) containing what it will say is "proof" that its now-abandoned deal with the Co-op was agreed on purely commercial terms.

Sir Win Bischoff, Lloyds' chairman, and Antonio Horta-Osorio, the bank's chief executive, will appear before the Committee on Tuesday morning as it launches an inquiry into the failure of the transaction.

They have submitted a dossier of evidence to the MPs containing contemporaneous internal memos and correspondence which the two men will argue demonstrates that the decision to enter exclusive talks with the Co-op was in the interests of shareholder value.

That argument is of wider relevance because Lloyds is 40%-owned by British taxpayers.

Lloyds has been stung by accusations that it was influenced by political ambitions of bolstering Britain's mutuals and that it rejected a bid from the investment vehicle NBNK Investments which appeared to offer a higher price for the branch network, known as 'Verde'.

Both George Osborne, the Chancellor, and Vince Cable, Business Secretary, expressed their support for the Co-op's takeover of the branches.

Lord Levene, who stepped down as NBNK chairman after its bid was dismissed, has stepped up a crusade against Lloyds and UK Financial Investments (UKFI), the agency which manages the taxpayer's stake in the bank, following the emergence of the crisis at the Co-op's banking arm.

The mutual's banking problems were thrown back into the spotlight on Monday when it unveiled a £1.5bn rescue plan that will involve losses for some bondholders.

Among the documents submitted to the TSC by Lloyds is a letter from Sir Win to Margaret Hodge, chair of the Public Accounts Committee, which scrutinised the Verde deal last year.

The dossier does not, however, contain correspondence between Lloyds and the Treasury in relation to the deal.

"That's because there isn't any to send," said a source close to the bank.

Sir Win and Mr Horta-Osorio are expected to say at the TSC hearing that the Co-op's offer provided greater certainty to Lloyds' board, despite the argument of Lord Levene that the mutual would have paid just £350m up-front, while NBNK was offering £400m more.

Lloyds is expected to dispute that claim during Tuesday's session. Sky News understands that it will say that in addition to the up-front cash payment, the Co-op was also offering £250m for the provision of IT systems and a further £100m for Lloyds' work building the new bank.

The mutual was also prepared to pay £400m as an 'earn-out' if Verde had hit various return targets in future years, Lloyds will say.

And the taxpayer-backed lender will add that NBNK was given five opportunities to revise its bid during the auction process.

The investment vehicle wanted to subtract £120m of its cash payment to rebrand the branch network, making the real value of its offer £630m, according to the evidence submitted by Lloyds.

David Davis, the Conservative MP, wrote in The Times on Monday that the Treasury was obliged to explain whether it played any role in the Verde auction process.

"In particular, why reject a strong bid from a well-funded plc in favour of an inferior bid from an institution that was clearly unable to fund the deal? Given the Co-op's balance sheet problems, why was it allowed to bid at all?"

Since the collapse of the deal with the Co-op, Lloyds has disclosed that the cost of separating the branch network has risen from just over £1bn to £1.6bn. It plans to float the business as TSB Bank plc on the stock market after the summer.

Lloyds declined to comment.


Anda sedang membaca artikel tentang

Lloyds To Hit Back Over Branch Sale Claims

Dengan url

http://kaumkusaman.blogspot.com/2013/06/lloyds-to-hit-back-over-branch-sale.html

Anda boleh menyebar luaskannya atau mengcopy paste-nya

Lloyds To Hit Back Over Branch Sale Claims

namun jangan lupa untuk meletakkan link

Lloyds To Hit Back Over Branch Sale Claims

sebagai sumbernya

0 komentar:

Posting Komentar

techieblogger.com Techie Blogger Techie Blogger