Lloyds Co-Op Deal Denounced By Lord Levene
A peer has alleged “bad faith” after a bid he was leading to buy hundreds of Lloyds bank branches lost out to the rival Co-operative Group.Giving evidence to MPs at Westminster, Lord Levene, who chaired NBNK Investments which had been seeking to create a new ‘challenger’ bank, said the bidding process had been unfair.
And he accused Lloyds of “unattractive commercial practice”.
Lord Levene also claimed he was told in a confidential meeting with the then-Governor of the Bank of England, Mervyn King, that it would be a “political decision”.
The hearing formed part of the Treasury Select Committee’s inquiry into the collapse of the Co-op’s acquisition of 632 Lloyds branches.
Lord Levene appeared alongside Gary Hoffman, the former chief executive of NBNK.
Speaking about the thwarted NBNK bid, Lord Levene told MPs: “It’s a matter of great regret to me this didn’t happen.
“I think it was a good idea but life goes on and you have to get on with it.”
But when asked by committee chairman Andrew Tyrie if the bidding process was fair he said: “No.”
Under further close questioning by Mr Tyrie, he was asked if he was alleging bad faith.
He replied: “Yes.”
In evidence to MPs, Lord Levene said during the bidding process he was told to look at the reference to financial services in the Coalition agreement, which said one of the goals was “to promote the interests of mutuals”.
Lord Levene said: “With the benefit of hindsight there seems to have been a view that if the creation of a new challenger bank was created by a mutual it would be another tick in the box for the goals set out.
“I have no problem with that provided it’s done by fair means rather than than foul.
“In our view they chose to concentrate on all the positive aspects of the Co-Op, and none of the positive aspects of our bid.”
He said later: “It was like a penny dropped, and we suddenly started to realise where this was coming from.”
Lord Levene also accused Lloyds of “unattractive commercial practice”, and said the evidence it had given to the Treasury committee was “at best disingenuous”.
Lord Levene repeated his claim that the bid by NBNK had been “financially superior”.
The peer told MPs he had personally lost £60,000 as a result of the failed bid. Investors collectively lost £30m.
Mr Hoffman said: “The great tragedy out of all of this is that it’s been to the detriment of the mutual sector, and that’s a great tragedy.
“The other great tragedy is we don’t have a challenger bank.”