Will the Lloyds Bank branch acquisition dilute Co-operative Bank’s brand values?
Yesterday, Lloyds Bank announced that Co-Operative Bank is the preferred bidder for the 630-odd branches that the EU requires Lloyds to sell, following the state aid it received in 2008. The acquisition would triple the Co-op's current size from 300 to 900 branches and is expected to boost competition between high street banks.
Co-Operative has been a star performer in the retail banking world for the last few years, with its distinctive “no shareholder” positioning appealing to more and more of the public, despite Co-Op’s relatively limited high street banking presence. 2010 saw a 79% increase in the number of current accounts switched to them, for example (source: Co-Operative Group Annual Report 2010). And Co-operative’s customers are essentially not principally switching for a “hot deal” – they are moving for much bigger and permanent reasons. In short, they want to place their business with a bank that shares their values – something that they no longer feel holds true for the big 5....
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