The Co-operative Group will migrate its existing banking systems to the Lloyds Banking Group’s IT platform as part of the acquisition announced today.
Co-op has agreed to buy the 632 branches from Lloyds in a deal worth up to £750 million, which will expand its branch network to nearly 1,000 branches, and its banking customer base by an estimated 4.8 million to a total of 11 million customers. The combined bank would represent nearly seven percent of UK personal current account customers.
In a statement, the Co-op said that once the transaction is completed, Lloyds’ TSB business would operate separately for a few years before integrating with Co-op Bank.
“The combined bank would ultimately operate on a separated version of the existing proven LBG IT platform, which would be managed by LBG, for the enlarged Co-operative Banking Group, on a managed service basis, under commercial market terms.
“It is anticipated that the earliest point at which the migration of the existing Co-operative Banking systems to the LBG IT platform would begin is 2015,” the company said.
Although contracts were exchanged today, the acquisition will not complete until next year.
Co-op Bank currently has an IT services contract with Steria, which runs until 2014.
Meanwhile, a spokesperson for the bank said that it would continue to do the necessary work - for example, to comply with regulations - on its IT systems until the transfer of customers to the Lloyds IT platform, he was unable to give any details about what will happen to the Co-op Bank’s IT following the changeover.
In moving Co-op Bank to Lloyds’ IT platform, the companies will be hoping to avoid the months of problems that occurred last year when Lloyds migrated Halifax and Bank of Scotland customers onto its platform.
Lloyds works with IT suppliers including SAP, VMware, Oracle, Microsoft and Unisys.