NBNK upbeat on Lloyds talks NBNK Investments, the bid vehicle that aims to challenge the dominance of the UK's big retail banks, on Friday said talks to buy more than 600 branches from Lloyds Banking Group were going well. Announcing a pre-tax loss of £23m for 2011, the Aim-quoted group also said it had received "satisfactory" feedback from the Financial Services Authority, the City regulator. NBNK was set up in 2010 by Lord Levene, the former chairman of the Lloyd's of London insurance market, in an attempt to provide fresh competition for the dominant quartet of Barclays, HSBC, Lloyds and Royal Bank of Scotland. Having pursued various acquisition opportunities, it was thrown a lifeline this spring when Lloyds" protracted talks with the Co-operative Group over the sale of 632 branches ceased to be exclusive. The move reignited NBNK's hopes of supplanting the Co-op and winning the branches, which have to be sold to satisfy EU rules on state aid and cover more than 5m customers, or about 4.6 per cent of the current account market. On Friday, NBNK said its discussions with Lloyds since the Co-op lost exclusivity had "progressed positively." It added that Lloyds had asked it to present its plans for the branches to the FSA, which has led NBNK to answer "a number of questions" posed by the regulator "relating to its renewed offer." "The FSA has confirmed to NBNK that the process of engagement is satisfactory from its point of view at this stage," it said. The need to get the FSA onside had been a sticking point in the Co-op's attempts to seal a deal with Lloyds. NBNK's pre-tax annual loss of £23m reflects the administrative expenses involved in its as-yet unsuccessful bidding for bank branches, including a £1.85m "golden hello" paid to Gary Hoffman, chief executive, when he joined from Northern Rock. In addition, Mr Hoffman received salary and benefits worth £913,000. Lord Levene - who in October moved from working one day a week at the company to three days - received a salary of £305,000. The bid vehicle - which made a pre-tax loss of £1.8m in 2010 - had tried to buy the "good bank" portion of Northern Rock, which was eventually bought from the UK government by Virgin Money. It also looked at buying Clydesdale Bank and Yorkshire Bank, part of National Australia Bank. "That work and the discussions that followed did not result in a transaction which we would have been able to recommend to our shareholders," NBNK said. NBNK's shares have been suspended since September 2011 following speculation about acquisitions.