More comment on Lloyds bank and Cheltenham and Gloucester
As we covered yesterday, Lloyds bank released a surprising statement confirming that the closure of Cheltenham and Gloucester has been put on hold for the moment while the bank reviews its earlier decision. Surprisingly, Lloyds bank has been unable or unwilling to give a reason for this U-turn and as you might expect the city rumour mill has gone into overdrive. So what exactly is going on?
Without doubt there appears to be some form of political activity in the background, and while many believe the UK government was behind the move, a number now believe it is actually the EU. It looks as though Lloyds bank may well have become caught up in the regulations regarding state funding for private companies which may ultimately save the Cheltenham and Gloucester in the short term. There is even a growing opinion that the operation will be put up for sale rather than closed by the Lloyds bank, although it is unlikely to receive anywhere near the £1.8 billion it cost to acquire.
Who would actually be able to afford the acquisition of Cheltenham and Gloucester, and fund the operation in the short term until markets return to normal, is debatable but one name which has been put forward by many parties is Virgin Money. Richard Branson's financial operation has been chomping at the bit to expand aggressively in the UK and was in fact one of the parties willing to take on Northern Rock when the operation hit trouble.
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