Brussels may force Lloyds to surrender Halifax
17 September 2009
Sources say that Neelie Kroes is planning to put pressure on Lloyds to relinquish assets as punishment for the billions of pounds of state aid that the bank has received. The Commission wants Lloyds to begin by severing its links with Halifax.
The European Commission has warned Lloyds Banking Group that it may have to surrender its ownership of Halifax as punishment for the billions of pounds of state aid that it has received.
Neelie Kroes, the Competition Commissioner, has yet to make a final decision, but banking sources say it is clear that she is planning to impose draconian penalties on Lloyds. Ms Kroes is understood to have rejected Lloyds’ attempt to limit the remedial action it must take for selling Cheltenham & Gloucester and making limited disposals in Scotland.
Instead, the Commission has said that it wants Lloyds, the UK’s largest retail bank, with almost one third of the market, to give up far more of its empire.
Halifax could be sold to a new entrant to the banking market. Tesco is at the top of the list of parties with which the Government is interested in discussing Halifax and other banking assets. Time is running out for Ms Kroes to reach an agreement with Lloyds and RBS because the present Commission’s term is scheduled to conclude next month, when new personnel are due to take office.
© The Times
