HEADS OF TERMS AGREED FOR MANDATED DIVESTMENT

Lloyds Banking Group plc ('The Group') has agreed non-binding heads of terms with the
Co-operative Group plc ('Co-operative') for the mandated retail and commercial divestment known as Verde.

Upon completion (estimated by the end of November 2013), the Co-operative is expected to acquire:

· 632 branches (which when combined with its existing network will have around 1,000 branches representing approximately 10 per cent of today's UK network).

· 4.8 million customers including 3.1 million personal current account customers, meaning the combined business will have approaching 7 per cent of today's personal current account market.

· A balance sheet of c. £24 billion with fully 'matched' assets and liabilities.

· The TSB and Cheltenham & Gloucester (C&G) brands.

19/07/12 08:30 Goldman Sachs retains Buy 0 60.00 60.00

I think It will be very costly for co-op to manage the Lloyds branches, given their computer system (whatever they have) is not compatible with Lloyds and is not designed for modern banking, especially business accounts.

They "have to" keep the staff and probably pay Lloyds to manage their system. Given all these problems, EU may change its mind and block the sale. Anyway, Lloyds has followed EU rules, which is a credit for the bank.

Whatever the situation, Lloyds will keep many of its customers as they prefer Lloyds to be their bank.

Pretty amazing stuff really, ‘Verde’ was enforced by European regulators following Lloyds ‘forced’ acquisition of HBOS in 2008. The price the Co-op are paying is significantly lower than the £1.5bn bid by NBNK last year. This deal doesn’t get any better for the Co-op, in effect Lloyds is lending the Co-op the money to buy its branches for half their value and it’s giving away the TSB brand also to help prevent customers from leaving.

As a Lloyds shareholder I’m pretty annoyed at all this government medalling in our company, first we’re forced to buy HBOS sending cracks through our solid foundations at the cost to shareholders. Then we’re told by the European regulators we’re too big and must sell branches we were forced to buy at a time of significant distress in the market. Not only that, we have to finance the sale with an IOU and pretty much through in all our possessions and family at the same! Amazingly the government wonder why investors don’t want to invest in banks and have so spun stories of gambling culture as the reason why!!

So, it is not only UK government being stupid, EU is stupid too.

I think Co-Op will fail to integrate their system and either will have to ask Lloyds to run the branches for them, or EU will oppose the sale as Co-Op is unable to run the branches. Our government should look after our tax - paid to keep HBOS alive and now selling on the cheap.

I think Lloyds should have been forced to sell at least one branch (licence inclusive) to Dave.

I've recorded both and haven't seen them yet - sounds quite an amazing man!

Should help to sell a few more of his vans at least.

Half Year Results


KEY HIGHLIGHTS

FURTHER GOOD PROGRESS ON STRATEGIC INITIATIVES AND RISK REDUCTION

· Balance sheet further strengthened: Group loan to deposit ratio reduced to 126 per cent (core: 103 per cent) and core tier 1 ratio increased to 11.3 per cent; funding position further strengthened, with wholesale funding decreasing by £37 billion in the first half; strong primary liquidity portfolio of £105 billion, covering more than twice our money market exposure of less than one year maturity of £44 billion.

· Substantial progress in reshaping the business: non-core assets reduced £23 billion to £118 billion, ahead of expectations, and international presence reduced, having now announced disposal or exit from 10 countries.

· Simplification savings on track: Simplification annual run-rate cost savings increased to £512 million.

· Continued investment in core growth and new products and services: Group customer deposit growth of 6 per cent and SME net lending growth of 4 per cent year-on-year.

· Signed heads of terms with The Co-operative Group on Verde.

· Moody's short-term rating re-affirmed for Lloyds TSB Bank plc at P-1; long-term rating A2.

· Management team further strengthened; appointed George Culmer, Andrew Bester and Cathy Turner.

RESILIENT UNDERLYING PERFORMANCE GIVEN CHALLENGING ENVIRONMENT

· Management profit increased 6 per cent to £1,165 million.

· Group underlying profit increased £715 million to £1,064 million, with fall in income more than offset by cost and impairment charge reductions.

· Core underlying profit of £2,977 million, down £231 million, with benefit of lower costs and impairments mitigating the effect of lower income.

· Group return on risk-weighted assets improved to 0.62 per cent from 0.18 per cent in the first half of 2011; core return on risk-weighted assets broadly stable at 2.48 per cent (from 2.50 per cent in the first half of 2011).

· Group banking net interest margin of 1.93 per cent, down 19 basis points compared to the first half of 2011, mainly reflecting higher wholesale funding costs; resilient core banking net interest margin of 2.32 per cent, down 11 basis points.

· Group total costs down 6 per cent with increased investment and inflation more than offset by Simplification savings.

· Group impairment charge reduced 42 per cent, ahead of expectations, with further asset quality improvements, in spite of the difficult environment.

· Statutory loss before tax of £439 million, including a further provision relating to costs of customer contact and redress on legacy Payment Protection Insurance business of £700 million in the second quarter, following an additional £375 million provision in the first quarter.

OUTLOOK AND GUIDANCE

· On track to meet 2012 financial guidance, including for full year banking net interest margin to fall year-on-year by approximately the same amount in 2012 as in 2011. Assuming current economic trends continue, expect the 2012 impairment charge to be lower than previous guidance.

· Expect achievement of long-term Group loan to deposit ratio target of 120 per cent by end Q1 2013.

· Now expect non-core assets to reduce to below £70 billion by the end of 2014; non-core reporting to cease at that time.

· Increasing clarity on regulatory framework to provide greater certainty to operating environment and recent changes supportive of economic growth; working to accelerate adoption of ring-fence given aligned business model.

LLOYDS BANKING GROUP ANNOUNCES SALE OF INTEREST IN A PORTFOLIO OF PRIVATE EQUITY INVESTMENTS

Lloyds Banking Group plc (the Group) announces today that it has agreed the sale of a portfolio of private equity-related investments with gross assets of approximately £1,050 million and the transfer of undrawn commitments which are expected to be £220 million at completion (the Portfolio) to a fund (PE1 LP) financed by Coller International Partners VI1 for a cash consideration of approximately £1,030 million. After the reversal of the related available-for-sale reserve, the transaction is expected to result in a pre-tax gain for the Group. Following the sale, the Group will continue to manage the fund in return for a management fee, which is likely to be less than £10 million per annum. The sale proceeds will be used for general corporate purposes.

Starting to look a little more lively!

I guess not being named today is "positive".

significant break upwards next stop 40p

Next target 40p........hope the 'stop' bit of your comment was an error, h!

Why is the Lloyds share price so strong at the moment

Because I sold mine, 50K, yesterday well below 33p!!

Ahoj, know how you feel sold bdev and TW tooooo soon.,.

Back looking at the 38p level.

March High (37.38) just broken 37.50p

Nicely cleared 40p.

100p