Lloyds deal opens way to Co-op expansion
The Co-operative Group could sell legal services from almost 1,000 bank branches, giving it an outlet on nearly every high street in the country following a deal to buy 632 Lloyds TSB and Cheltenham & Gloucester branches.
The group announced this morning that it had agreed to pay £350m upfront for the branches plus an additional £400m based on the performance of the business between now and 2027. The group already owns 330 bank branches, made up of the Co-operative Bank and Britannia Building Society.
The purchase will increase the Co-op’s market share of personal current accounts from 1% to 7%. Its network of almost 1,000 branches will represent 10% of the UK bank network, with 11 million customers.
Co-operative Legal Services is piloting the sale of legal services through 30 bank branches and will roll out the service to the rest of the Bank and Britannia network later this year. The Lloyds takeover could enable legal services to be offered through all 962 branches in England, Wales and Scotland.
However a spokesman for the group said: ‘It will be at least 2013 before the deal [to acquire the new banks] is even implemented. Rolling out legal services to these branches hasn’t been considered yet.’ The group’s chief executive Peter Marks said the deal to buy the banks ‘would deliver the biggest shake-up in high street banking in a generation’.
Comments
The Co-Op / ABS Gazette
QUOTE:-
However a spokesman for the group said: ‘It will be at least 2013 before the deal [to acquire the new banks] is even implemented. Rolling out legal services to these branches hasn’t been considered yet.’
So, in fact, it's not really a story. You may as well put "Santander will have branches in the year 2014, and could operate legal services from them".
Yet another non-story, trying to hype up ABSs and the Co-Op. I do hope they are paying for their free advertising.
Exactly Dom, the way the
Exactly Dom, the way the Gazette fawns over every gobbet of info from the Co-op is really pretty nauseous...
And seeing as though most High St banks are poky little places that barely manage to properly service a few sad punters at the best of time, how will they make space to have anywhere to flog their legal wares?
Co-op divvy
If you think the first and largest ABS buying a ready-made network of high street branches through which it can sell legal services is a non-story, there's not much hope for you. I suspect many solicitors will not be so sanguine. But it's OK, stick your head back in the sand.
I think the first and largest
I think the first and largest ABS reaching terms to buy a branch network, which is anticipated to complete in a years' time, and which neither it - nor anybody else - has said will have anything to do with legal services is a non-story.
Why not report on Co-Op funeralcare having bought new, larger, premises in Rochdale through which they may offer legal services?
I didn't see any report on the tie up between Thomas Cook and Co-op travel, which would likewise allow legal services to be opened.
And there hasn't been any press release about this from Co-Op (why would there be, when their own pr has told you they have not even considered legal services in the context of the TSB takeover, let alone made plans for it).
When they plan something, there is a story. They haven't. So there isn't.
Mmm. Co-op has already
Mmm. Co-op has already confirmed its intention to roll out its legal services offering to all of its existing 330 or so high street outlets, and it's just bought several hundred more. You think no one in that organisation is on the case about selling legal services out of those new branches? Time will tell, but do not wager any money on that outcome my friend.
What are the PRs going to tell us? Oh yes, we're going to give you chapter and verse and alert all our competitors well ahead of time? Even if they haven't discussed it yet, so what - it has to be on their agenda and it be would consistent with their strategy so far to roll out across the estate.
In any case, the question is hardly whether but how - directly, or through cross-selling and bombarding their new bank branches with plugs for the legal service offering. They even do that through their grocery stores with plugs at the till - and a bank is a much more condusive environment when you are a respected mutual like they are. Not being Barclays or Lloyds is one hell of advantage just at present.
Still, if you're right and I'm wrong, come back on here in 2014 and I will happily concede the point.
The enemy at the gate
If the Co-op decides to sell legal services from its much larger network (and if the current pilots are even only moderately successful, I believe it will) no one can say they didn’t have enough time to put contingency plans in place.
Co-op has been shouting about capturing more of the legal services market regularly and this latest announcement puts them in a much stronger position to do just that.
If a potential enemy amasses more troops and weapons should you ignore that fact just because they haven’t said they intend to use them against you?
Good points and perhaps I
Good points and perhaps I jumped in too quickly to criticise. But it's still an opinion piece rather than a news article.
If Co-Op haven't opened 400 legal branches by 2014 then I'll certainly come back. Although of course because I have chosen to run my own business, employ people and provide legal services to high street clients, rather than be a worker for some or other large company, if you are right I will be bankrupt by 2014 anyway, won't I?
LBG/Co-Op
In my town we currently have
1 Co-op bank + 1 Britannia BS/Co-op bank (2 branches)
vs.
2 LloydsTSB branches + 1 C&G branch (3 branches)
following re-organisation we will have
1 Co-op bank + 1 Britannia BS/Co-op bank + 1 C&G branch (3 branches)
vs.
2 LloydsTSB branches (2 branches)
The only change being an increased number of branches with the stated aim of offering legal services. Has anyone considered offering banking services? (I quite like the idea of the bonuses) - Oh I forgot, our regulator won't let us offer banking services!
The Co-Op are riding high on
The Co-Op are riding high on a tide of favourable public opinion at the moment - for some time yet they will be thought unable to do wrong. The behaviour of the Big Four high street banks is what has given the mutual the free publicity, not the Law Gazette. The "poky little branches" will cater for the needs of the older clientele, whilst the younger generation will expect to do it all online with no brand loyalty.
Don't think that view is
Don't think that view is bourne out actually.
In as much as they are thought better than the big four, that is almost certainly because they are smaller, and therefore fewer poeple interact with them.
As soon as people start receiving charges for bounced direct debits, because their online banking computer system is (still) not updated in real time like the other banks (and I believe they will not be until 2013, so card payments and some credits to the accounts don't show up until after they have been taken), then there will be more complaints.
When they start charging people late payment interest and overdraft penalty fees in greater number, then there will be more complaints.
When they start suing people, getting charging orders on their homes, and repossessing their properties in greater number, there will be more complaints.
And last but not least, when they start offering volume legal services, their brand will I think be tarnished. Just look at the Gazette, a specialist publication for the solicitors profession. It is not a magazine aimed at the general public. Every time there is an article about the Legal Ombudsman, the SRA, the Bar Standards Board, along come members of the public with "horror stories" wanting to "name and shame". They presumably came accross the Law Society Gazette by accident, but it shows the strength of feeling that exists amongst those with perceived injustices suffered at the hands of lawyers.
Put a well known brand name into the mix, and (as has been predicted before) it won't be long until you have men denied custody of their children chained from motorway bridges with anti Co-Op banners.
Interesting
Interesting how these stories always spark the same reactions (derision, fear, grudging respect).
There is only one fact that we need to know. The world of legal services is changing to a more competitive market. Nothing stays the same forever, and change was inevitable at some point in the future, as it has been for almost every other industry. In a competitive market prices are driven down. Some will reduce fees with a resultant drop in quality. Others will provide the same service, but cheaper. Some will even provide a better service, cheaper.
All you need to do is to ensure that your business stays competitive. How you do that is up to you, but it is the same challenged faced by any business every day. When Nintendo released the Wii, Microsoft collectively shivered. Rather than bleating on about how bad everything is they came back with the Kinect. Same idea, but better. Apple products are generally more expensive than similar items, but they just "work" better a lot of the time. When a new take away opens three doors down from another it must either do the same thing better/cheaper, or do something completely different. Standing out is key, and it doesn't matter if you are a globally recognised organisation or a sole trader. Do it better, or cheaper, and people will come to you. Now get ready for the revolution!