Co-op chief makes shock departure
In a surprise move the chief executive of Co-operative Financial Services quit on Friday.
That came less than two weeks after the mutual made an initial offer for 630 branches of Lloyds Banking Group.
Neville Richardson, who oversaw Co-op’s merger with the Britannia building society two years ago, said he felt it was time to move on as the integration of the two businesses was well advanced.
Mr Richardson was thought to be lukewarm on Co-op’s bid for the Lloyds branches given the challenges it still faces in bedding down the Britannia merger. He was rumoured to be against being tied into another lengthy integration in case Co-op’s bid would succeed.
His decision to leave now gives an indication of the seriousness of Co-op’s interest in the Lloyds’ branches.
Co-op’s presence brings a number of advantages over the two other bidders – Virgin Money and NBNK. The Independent Commission on Banking is concerned Lloyds’ network on its own would not create a powerful enough competitor and is therefore keen that it goes to an established force.
Selling to Co-op would save Lloyds the added complication of carving out a standalone banking platform. Co-op’s record may also mean it benefits from less stringent capital requirements.
However, the Lloyds acquisition would be ambitious for Co-op because the deal would treble Co-op’s number of branches.
Mr Richardson will not leave the company until later this year but has handed over day-to-day responsibility to Barry Tootell, chief financial officer. A search for a permanent replacement is under way.
Analysts think an external candidate is most likely, although Rod Bulmer, who heads retail banking, is thought to be an early internal contender.
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