Lloyds Banking Group (LLOY.L) has hit back at suggestions by the Independent Commission on Banking it should be forced to sell more branches.

The banking group has already been mandated by the European Union to sell 600 branches as mandated by the European Union, what is known as Project Verde.

The Independent Commission on Banking said it believed the selling off of branches would have limited effect on banking competition in the UK unless it was 'substantially enhanced'.

The bank said expansion of the divestment scheme it would not be in the interest of customers.

António Horta-Osório, chief executive of Lloyds Banking Group, said, 'We are surprised that the interim report is proposing a potential expansion of Project Verde which we believe is not in the interest of our customers.

'This option appears to be based on limited evidence and may paradoxically potentially delay a new competitor coming into the UK market.'

In a market statement, Lloyds said its acceleration of the divestment was likely to identify a potential purchaser by the end of 2011.