The Co-op joins the premier league and the banker-bashers are watching

Hail to the Co-operative Bank, which has snapped up the 632 branches that Lloyds was under orders from Brussels to shed by next year. The price looks like a buy-one-get-one-free sofa sale: £350 million down with £400 million to pay over 15 years ‘if targets are met’, against Lloyds’ initial expectation of £1.5 billion-plus. That’s hardly a joy for taxpayers who own 40 per cent of Lloyds, but it triples the size of the Co-op branch network — a boost to banking biodiversity that must surely be positive for the high-street economy.

One good thing about the Co-op is that it is based in Manchester, far from the taint and corruption of the City of London. Handelsbanken, the Swedish group which scores high marks from customers of its 129 UK branches, also has an HQ nearby, and if I was Manchester’s spinmeister I’d be ringing Robert Peston with an ‘exclusive’ about the ‘new capital of sensible banking’. But there’d be no Bollinger-popping, perhaps not even an extra digestive from the tea trolley to celebrate a deal which instantly promotes the Co-op team (the highest paid of whom earned a modest £766,000 in 2011) into the premier league of UK retail banking.

They should not imagine that their ethical profile and roots to the Rochdale Society of Equitable Pioneers in 1844 will protect them from anti-bankerism, however. Far from it: negative reactions were instantaneous. Pundits concerned for the taxpayer interest argued that the downsizing of Lloyds would have been better achieved by reinventing its Halifax subsidiary as an independent mortgage lender and giving the busted Bank of Scotland back to the Scots. Affected Lloyds customers were reported to be ‘furious’ that they have no choice but to join the Co-op — or experience the trauma of closing accounts and opening new ones if they insist on staying put.