NBNK's bid to buy 632 branches from Lloyds Banking Group and create a major competitor to Britain's established high street lenders has got approval from the Financial Services Authority.
NBNK said talks with Lloyds on the sale had “progressed positively” and that the regulator had confirmed it was satisfied with the bank’s plans should it be successful in acquiring the branches.
The statement comes as NBNK’s annual report showed Gary Hoffman, the acquisition vehicle’s chief executive and the former Northern Rock banker, was paid £2.67m in his first eight months in the job. Of the total, £1.85m was a “golden hello”. The NBNK news comes after the bank submitted a fresh bid in April for the so-called Project Verde business being sold by Lloyds.
The new offer came as it emerged that the Co-op, which was granted exclusivity in the race to buy the branches late last year, was struggling to get FSA approval to complete the deal.
NBNK was founded by Lord Levene, the former Lloyd’s of London chairman. Its financial results last year showed it had made a loss of £23m.
On Friday it said it had “answered a number of questions” from the FSA about its bid for the branches following its renewed offer and the regulator had confirmed it was happy with its responses. “Having continued to engage constructively with Lloyds, I believe we have provided sufficient information to enable negotiations to progress for the sale of Verde,” said Mr Hoffman.
Antonio Horta-Osorio, the chief executive of Lloyds, said last month that the lender was looking to get assurances from NBNK that its bid would not face regulatory problems.
Despite losing its exclusive bidder status, the Co-op remains the preferred buyer of the branches, and last month it submitted a revised offer for the Verde business to the FSA in an attempt to gain final approval for the takeover.
Lloyds has also continued to prepare the business for a stockmarket listing in the event that neither of the offers matches its expectations.
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