Bank-race firm looks to Middle East

An investment firm vying with the Co-operative Group to buy 632 bank branches from Lloyds could turn to Middle East wealth funds in a bid to boost its firepower.

NBNK, headed by former Northern Rock boss Gary Hoffman, is understood to have held talks with funds from Qatar and Abu Dhabi in an attempt to persuade them to become “cornerstone” investors.

The backing of both or either of the funds – which have major investments in household businesses such as Harrods and EMI – could boost NBNK’s chances.

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The development comes days after Lloyds announced it would allow other parties as well as the Co-op to bid for the business in the wake of renewed interest from NBNK.

Lloyds is being forced to offload the branches as a penalty for taking a bailout from the taxpayer.

NBNK turned up the pressure on the Co-op when it recently outlined a proposal to underwrite a flotation of the branches on the stock market to create the UK’s first “no bonus bank”.

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