The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

The EU shows its teeth over Lloyds

Divestment plans to be imposed on Lloyds show the EU competition commission will not let European banks off the hook lightly for their past sins.

Uncertainty is growing over the scope and scale of restructuring plans to be imposed by the EU Competition Commission on European banks that have been kept alive by state aid.

On October 29, Lloyds Banking Group announced to its shareholders that, based on its advanced discussion with the Commission, the final terms of its restructuring plan, including any required divestments of assets, will not have a material impact on the Group. Its shares rallied sharply on this news.

Over the following weekend, UK chancellor Alistair Darling revealed that Lloyds would indeed be expected to divest some large parts of its business in return for the government support it has already received. These could include big parts of its retail network, such as Cheltenham & Gloucester, TSB Scotland an online bank Intelligent Finance.

It makes you wonder what Lloyds’ management considers ‘material’.

Then again, such news should really have come as no surprise. In June, when the EU approved a plan to restructure Commerzbank following its recapitalization by the German state, it required a roughly 20% cut in the balance sheet and the divestment of the majority of Eurohypo by 2014.

It was never clear what had changed at Lloyds, in which the UK government has a 43% stake, since European competition commissioner Neelie Kroes addressed the British Bankers’ Association on June 30 2009 and analyzed the consequences of the UK government keeping the country’s financial sector alive with £1.26

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree