20 July 2012 10:22
The Co-operative Group today hailed its deal to buy 632 Lloyds Banking Group branches for up to £750 million as "the biggest shake-up in high street banking for a generation". The Co-op, which is also well-known for its funeral services and its food, said it will become a "new challenger" in British banking after announcing the long-awaited agreement, which will triple the size of its banking arm to nearly 1,000 branches and increase its share of UK branches to around 10%.
The 4.8 million Lloyds customers affected were advised to "hold tight" to see what the Co-operative Bank had to offer them, although they would have some time to wait, with the deal not set to be completed until next year.
Its trusted and ethical reputation is also something commentators said would have a strong pull and attract new customers as it beefed up its presence on the high street.
Kevin Mountford, head of banking at comparison website MoneySupermarket said: "As we have seen over recent weeks following the recent banking turmoil, many smaller banks, including the Co-operative Bank, have benefited from customers switching away from the big banks.
"Creating a new 'real' challenger to the big banks may be the antidote the sector needs, and may encourage a culture of switching which has been lacking over the past few years, especially as the Co-operative Bank is seen as a more trusted brand than many of its rivals."
He said that as the deal still had some hurdles to go through, it would be some time before customers were switched over.
Mr Mountford said: "The deal is not due to complete until late 2013. For most customers, the switch will be straight forward, so they should hold tight and see what is on offer."