The new high street bank being set up by City grandees Lord Levene and Sir David Walker is eyeing up the acquisition of Lloyds' online unit Intelligent Finance, according to press reports.
It emerged late last week that Lloyds of London chairman Levene and former Bank of England director Walker, along with Charles McCreevy, the former European Union internal markets commissioner and Lord McFall, previous head of the Treasury select committee, are planning a new venture.
'Project New Bank' will look to buy government-owned bank assets, with the 600-strong Cheltenham & Gloucester branch network that the EC is forcing Lloyds to sell, the group's top target. Northern Rock is widely reported as another potential acquisition.
According to City AM, Levene and co are also in the market for an online banking acquisition and have set their sights on Intelligent Finance, which the EC is forcing Lloyds to ditch.
The new company is expected to list as a cash shell in the next few weeks with around a dozen institutional investors backing an initial fundraising of £50 million.
The firm then plans to buy a small bank in order to gain a licence from the Financial Services Authority, aping the move of fellow new entrant Virgin Money, which acquired Church House Trust in January.
However, according to the Financial Times, shareholder groups have already indicated they will be prepared to put up funds for bigger targets such as the Lloyds branch network. The FT quotes one person involved in the venture, claiming it could raise up to £4 billion to help beat out competition from the likes of Virgin and National Australia Bank for government-owned assets.
Lord Levene's bank eyes up online assets - City AM