THE Nelson branch of Lloyds TSB is being transferred to a new business as part of the agreement which saw it granted state aid.

The Manchester Road branch is one of 280 in England and Wales that will form part of the new Verde business, a deal for which has to be completed by November 2013.

The European Commission has demanded the sales as the price for state aid during the financial crisis, which saw Lloyds become 41 per cent taxpayer owned.

The group has also reassured employees that it does not expect any redundancies as a result of the business being sold.

The Verde business will have around five per cent of the UK personal current account market, more than 600 branches and become the seventh largest bank in the UK.

It includes the TSB brand, Cheltenham & Gloucester business, Lloyds TSB Scotland and more than 250 Lloyds TSB branches in England and Wales.

Lloyds said it did not expect any redundancies as a result of the Verde business being sold.

A spokeswoman said: "Redundancy isn't on the cards, we expect staff will transfer to the new owner.

"The idea is that what we create for this new business is a complete business including people.

"We need to ensure it is a fully-fledged business that can operate from day one so employees need not worry.

"For the next two years they are very much part of Lloyds Banking group."

Although names such as Virgin Money and former Northern Rock chief executive Gary Hoffman's NBNK Investments have been touted as possible buyers, National Australia Bank (NAB), which owns the Clydesdale and Yorkshire banks, is seen as the frontrunner.

Paul Pester was appointed as chief executive of the Verde business this week to lead the sell-off, with Lloyds expected to start discussions with a possible buyer this year.

He said: "The new bank will be a great addition to the UK market and will be focused on promoting competition and delivering great products and services to its customers."

Pendle Council’s Labour Leader Mohammed Iqbal said: “I think whilst it is not great news Lloyds TSB will be moving out of Nelson we must be reassured that the new owners will keep provision for its Nelson customers.

“This is good news, especially for those Nelson residents who cannot get to other branches in Burnley or Blackburn.

“Those residents who wish to continue banking with Lloyds TSB will have the option to do so by moving, but those happy with the transition will be able to stay where they are.”