C&G lifts ban on new accounts

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CHELTENHAM & Gloucester Building Society is again accepting applications for new investment accounts after a three-week moratorium, writes John Willcock.

But new account holders will not be able to vote on the pounds 1.8bn merger plan with Lloyds Bank.

The three new accounts are existing investment accounts renamed as deposit accounts, but without investment account membership or voting rights.

The move will enable C&G to continue accepting deposits without enlarging the number of customers able to vote on the merger. New customers would at the same time be unable to accept payment from Lloyds because they would be of less than two years' standing.

Analysts see this as significant to the ultimate success of the proposed Lloyds deal. C&G hopes to win approval for the takeover this year, either by successfully appealing against the Vice-Chancellor's ban on payments to customers of under two years' standing or by clearing the high voting hurdles required for approval.

If there is a delay beyond the year-end new customers would potentially be eligible to vote without being able to get a cash payment. The two-year rule under the Building Societies Act is measured from year-end to year-end.

C&G is still uncertain from which date the two-year cut-off point should be measured.