NEARLY £395 million was added to the market value of Lloyds Banking Group, parent of Bank of Scotland, following confirmation from Sir Richard Branson that his Virgin Money business plans to bid for a parcel of its branches this summer.

New Lloyds chief executive Antonio Horta-Osorio accelerated the sale of 600 branches, which has been demanded by European competition officials, when he took over in March.

Sir Richard said he expected to make a formal bid for the branches in July. Among the operations up for sale, in what Lloyds has dubbed Project Verde, is Lloyds TSB Scotland, which has 185 branches, as well as the TSB brand.

However, a spokesman for Virgin Money revealed that if it buys Lloyds it is likely to rebrand the business as Virgin.

Lloyds is expected to issue an information memorandum to potential bidders in the next few weeks.

Mr Horta-Osorio told the bank’s annual shareholder meeting last week that Lloyds had been in contact with potential buyers of the 600 branches.

The comments from Virgin boosted hopes in the City that the sale process is on track, and yesterday Lloyds’ shares gained 0.58p, or 1.1%, to close at 51.32p, valuing the bank at £34.9 billion.

Virgin, which is led by Edinburgh-based chief executive Jayne Anne Gadhia, is in talks with investors to have financing of up to £3bn in place by the end of July.

Edinburgh-based Tesco Bank, new bank NBNK, which is backed by former treasury committee chairman Lord John McFall, and Clydesdale Bank, part of National Australia Bank, are all thought to be interested in the business.

Clydesdale declined to comment yesterday. But NAB chief executive Cameron Clyne said last month he was willing to look at the options available to its UK business.

Mr Branson has expressed an interest in both Lloyds’ branches and Northern Rock, the Newcastle lender nationalised in 2008.

Mr Horta-Osorio this week appointed Paul Pester, managing director of consumer banking and markets, as chief executive of the so-called Verde business. His senior team also includes Peter Navin, chief executive of Lloyds TSB Scotland and the network director for the Bank of Scotland.

The Lloyds asset sale process has been complicated by the UK’s Independent Commission on Banking (ICB), which said in an interim report last month that Lloyds might have to sell significantly more branches to boost competition.

Lloyds has warned this could delay its sale process.

Meanwhile, analyst Canacord Genuity reduced its price target for Lloyds shares from 75p to 60p, although it retains a “buy” rating.

It revealed it expected pre-tax profit for this year to come in at £3.4bn, not the £4.9bn it had anticipated previously.