Lloyds lashed by grandee whose bid for branches was blocked twice

 

Lloyds Banking Group and the Government acted in "bad faith" in the way Co-op was twice selected as the exclusive bidder for more than 600 Lloyds branches, MPs on the Treasury Committee have been told.

The accusation was made by Lord Levene, the City grandee who chaired Co-op's defeated rival NBNK. Appearing as part of an inquiry into the failure of the Co-op's bid for the branches – then called Verde – he claimed he had been told by Lord Mervyn King – the former Governor of the Bank of England –that the decision was going to be political and that he should "talk to politicians" if he wanted to win.

In an incendiary hearing before the Treasury Committee – which at one stage resulted in Labour's John Mann shouting angrily at chairman Andrew Tyrie over an attempt to get a point across – Lord Levene also accused Lloyds of "unattractive commercial practices".

And he said it was "untrue" to say that he didn't hand a document highlighting what NBNK thought were grave problems and risks with Co-op's bid to the Lloyds chairman, Sir Win Bischoff, who at the time was a friend of Lord Levene.

Lord Levene, a former civil servant, investment banker and chairman of Lloyd's of London, said: "I was instructed at a board meeting to take this document to the chairman of Lloyds. Both Mr [chief executive Gary] Hoffman and I attended that meeting and we can both confirm to you today – and if you'd like on oath – that we handed over that document on 27 January 2012 in his office. I can remember very clearly doing so.

"People have said with the benefit of hindsight that was a pretty perceptive document. That wasn't produced with the benefit of hindsight, it was produced with our advisers at the time. Unfortunately we were proved only too right."

Asked by Angela Leadsom if Sir Win was therefore "lying" by saying he had not received the document, Lord Levene said: "Maybe he had a senior moment. Maybe it dropped down the edge of a sofa, but if he says I didn't give it to him, that's untrue.

"In our view they [Lloyds] chose to concentrate on all the positive aspects of the Co-op and none of the positive aspects of ours...

"I believe that Lloyds were swayed by political considerations. I would say that their assessment of our bid was not done fairly. I was told at one stage, quite late, that I should look at the reference to financial services in the Coalition agreement. One of those said it was in the interests of the Coalition to promote the interests of mutuals. Clearly the Business Secretary [Vince Cable] was a big supporter of mutuals... I didn't understand the full inference at the time."

NBNK entered the bidding process in 2011 and was allowed back in 2012 after the Co-op failed to meet deadlines, but ultimately lost out. The Co-op's bid subsequently collapsed and it then emerged it had a £1.2bn hole in its accounts.

Asked why he didn't realise the auction of part of a state-supported bank would be political, Lord Levene simply said: "We believed we were in a fair process."

He said Mr Hoffman had stated the sole reason for rejecting their bid was on the grounds that there was "less execution risk" than with the Co-op and it was not on financial grounds. Lord Levene added they had offered meetings with their corps of blue-chip investors to demonstrate their commitment and funding, but Lloyds turned then down.

Despite the alleged bad faith and his losing £60,000 on NBNK shares, Lord Levene, who is no longer a shareholder, said he would not pursue legal action against Lloyds. But there have been rumblings among remaining NBNK shareholders that they could pursue this option.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there