Banking venture NBNK has confirmed that it has made a new offer to buy 632 branches from Lloyds.
The Co-op had previously been considered as the preferred buyer of the branches which Lloyds must sell as part of the bank bail-outs.
However, the chief of the Co-op, Peter Marks, revealed that the deal could be in doubt as a result of economic problems and other regulation issues.
Any deal has to be rubber stamped by November 2013, with NBNK stating that it was confident it could successfully meet that date.
It added that it had been in contact with the Financial Services Authority throughout the bidding process, and believed it was well placed to meet the necessary requirement to take over the branches.
NBNK has been looking to break into the high street banking market in the UK and has pledged to make no branch closures if it does take over the Lloyds branches.
It said it would offer shareholders – including the 40% Government stake – the option of receiving cash and/or shares in a new bank.
The new institution would become 'the UK 's only major, listed organisation solely dedicated to retail and SME banking'.
"Our objective is to create a new, large challenger bank and brand that will shake-up UK high street banking, operating in the interests of customers," NBNK's Chief Executive, Gary Hoffman, said.
"I believe we have tabled a compelling proposition that will invigorate competition, provide jobs and is the right solution for taxpayers."
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