IT Asset Reduction at Co-op Following Lloyds Branch Agreement

Potential IT investments loss of up to £200 million for The Co-operative Banking Group due to a prospective takeover of 632 branches from Lloyds Bank.

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2025 September 15 . 1:23 AM

1 min read

IT Asset Reduction at Co-op Following Lloyds Branch Agreement

The Co-operative Banking Group is currently in the midst of a significant IT transformation, with a budget of £700 million set aside last year for replacing outdated banking systems. According to reports by The Times, the potential cost of this transformation may be substantial, rivaling the bank's entire profits from the previous year.

If the deal with Lloyds Banking Group goes ahead, the Co-op will have to write off investments made in an ongoing IT system upgrade, including the migration to Infosys's Finacle banking platform. The bank initially chose this platform in 2009 but has yet to roll it out.

As part of the proposed deal, the Co-op has agreed to adopt Lloyds's banking IT system. This decision, along with the ongoing upgrade to Infosys's Finacle, has led to estimates of a potential write-down on Finacle of up to £200 million.

The deal, if it goes ahead, would involve the acquisition of 632 branches from Lloyds Banking Group by the Co-operative Banking Group. In June 2020, a non-binding agreement was signed between the two parties regarding this acquisition.

However, the Co-operative Banking Group's spokesperson described the potential write-off story as "highly speculative". They could not provide any further comment on the matter.

In other news, the Co-op has launched an iPhone app and has successfully upgraded its payment clearance processes in line with EU regulation. Despite the ongoing IT transformation, the bank continues to serve its customers with new digital services and compliance with regulatory requirements.