MORE than 20 bank branches across the North-East and North Yorkshire are amongst those Lloyds Banking Group will relinquish control of under the agreement which saw it granted state aid.

The branches of Lloyds TSB and Cheltenham and Gloucester, employing in excess of 200 people, will form part of the new Verde business, a deal for which has to be completed by November 2013.

The 22 branches include Lloyds TSB branches in Blackwellgate Darlington, Greenwell Road Newton Aycliffe and Frenchgate, Richmond, as well as Cheltenham and Gloucester in High Street, Durham City.

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

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 isnt 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."