EU formally approves plans to break up Lloyds

by Gill Montia

Story link: EU formally approves plans to break up Lloyds

The European Commission has formally approved plans for the break up of Lloyds Banking Group.

Under a four-year plan, the 43% state-owned Lloyds will sell its TSB, Cheltenham & Gloucester and Intelligent Finance brands.

The bank will also dispose of its Lloyds TSB branches in Scotland, plus certain outlets in England and Wales, totalling 600 branches in all.

The businesses up for sale represent a 4.6% share of the UK personal current account market.

EU Competition Commissioner Neelie Kroes said: “This plan effectively addresses the Commission’s competition concerns and at the same time ensures the return of Lloyds Banking Group to long term viability.”

Earlier this month, the Government outlined its intention to create three new retail banking chains from the taxpayer-rescued Lloyds, RBS and Northern Rock.

Bids will be encouraged from relatively new entrants to the UK banking sector, such as Tesco and Virgin Money.

Plans for the break up of Northern Rock have already received EU approval; the lender is being split into one “good” and one “bad” bank with the taxpayer retaining ownership of its bad loans and the group’s securitisation vehicle, Granite.