David Prosser: Millions set to be banking orphans

Outlook Lloyds Banking Group's Project Verde is hotting up. In making its formal bids yesterday for the 630 or so branches Lloyds has been told to sell by the European Commission, NBNK appears to be the only game in town ahead of Friday's deadline for offers.

Actually, Lloyds insists there is no such deadline, and one assumes it will give rival bidders time, but we are getting to the endgame.

So it's an appropriate moment to ask how this is actually going to work. For with those 630 branches come several million customers, all of whom are going to wake up one morning very soon to discover they no longer bank with the institution they thought they banked with. Instead, they are very likely to be banking with a bank of which they have never heard before.

Lloyds certainly isn't going to be allowed to fight to keep these customers. That would rather defeat the object of the original European Commission ruling, which was all about the assets attached to the Lloyds branches in question, the customers and their accounts, rather than the bricks and mortar.

Even assuming Lloyds and its buyer are up to the job of transferring so many bank accounts (not to mention savings products, insurance contracts and mortgages) – and this is not an industry that has covered itself in glory on that score – aren't many customers going to be a little cheesed off to hear they've been moved through no choice of their own? Indeed, it is likely that very many of them will want to transfer back.

In forcing Lloyds to sell these branches, the European Commission hopes to reverse the decline in competition its merger with HBOS implied, an ambition Sir John Vickers hopes his proposals for banking reform will augment.

The question is whether customers will play ball – all the evidence from the past is that people are extremely reluctant to change their bank. It's going to be fascinating to see what happens when so many of them are suddenly forced to do so.