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UK government and Lloyds Banking Group accused of 'bad faith' in branch sell off

Both the UK government and Lloyds Banking Group have been accused of acting in bad faith when selling off 600 Lloyds branches.

The accusations came from Lord Levene, former chair of NBNK Investments, which bid to buy the branches. He told the Treasury Committee that Lloyds was "swayed by political considerations".

Lloyds Banking Group was bailed out by the government during the financial crisis and chose to sell its branches to Co-op bank, a deal which subsequently collapsed as it announced a $2.4 billion hole in its finances.

Lord Levene said that "leading market players" were aware that the Co-op bid for the 600 Lloyds branches would fail at the time.

He added that the government and Lloyds chose to concentrate on "all positive aspects of the Co-op and none of the positive aspects of our bid".

In written evidence he provided to the committee, Lord Levene detailed a NBNK board meeting where concerns were raised that "it was not a fair race".

By Gary Cooper