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Volume 175: debated on Monday 2 July 1990

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To ask the Secretary of State for Trade and Industry when he expects the sale of Girobank to be completed.

I am pleased to announce that the sale of Girobank by the Post Office to the Alliance and Leicester Building Society was completed today. When the sale of Girobank was announced in June 1988, we set out a number of factors which we and the Post Office agreed would be important in evaluating bids. I am fully satisfied that the sale to Alliance and Leicester meets these points. Alliance and Leicester is clearly well placed to develop and expand Girobank's business, a major objective of the sale. It will contribute to greater choice in banking services, while preserving the close links between Girobank and Post Office Counters. I am confident that both Girobank's staff and its customers will benefit from its new position in the private sector and I wish Girobank's management and staff well in this new and challenging stage of the bank's development.My right hon. Friend the then Chancellor of the Duchy of Lancaster announced in April 1989 that, following a competitive bid process, the Post Office had agreed to sell Girobank to the Alliance and Leicester Building Society for £130 million, subject to later adjustments to the sale price principally in respect of the difference between the book and market values of Girobank's gilts portfolio. Following these adjustments, the proceeds received by the Post Office will amount to £111·9 million, comprising the repayment of Girobank's subordinated debt issued to it by the Post Office of £39 million, and payment by Alliance and Leicester of £72·9 million for the equity.