EU may force UK’s Lloyds to sell Halifax – report

September 16, 2009

Signs hanging over the Lloyds TSB Bank and Royal Bank of Scotland are seen in Loughbrough, central England, September 17, 2008. British bank Lloyds is in advanced merger talks with UK mortgage lender HBOS, the BBC reported on Wednesday, citing sources. HBOS, the group created by the merger of Halifax and Bank of Scotland, is Britain's largest savings group. REUTERS/Darren Staples (BRITAIN)    LONDON, Sept 15 (Reuters) – The European Commission may force Lloyds Banking Group <LLOY.L> to sell off all or part of its Halifax branch network as compensation for the billions of pounds of state aid the group has received, the London Times reported.
   EU Competition Commissioner Neelie Kroes has yet to make a final decision, but banking sources told the newspaper she plans to impose tough penalties.
   “What (the commission) are talking about Lloyds giving up sounds a lot like Halifax,” one person close to the negotiations with Brussels was quoted as saying.
   Some believe the bank may be able to reach a compromise that would allow it to keep the Halifax name but sell a significant number of its 1,000 branches.
   Kroes is understood to have rejected Lloyds’ attempt to limit the remedial action it must take to selling Cheltenham & Gloucester and making limited disposals in Scotland, the newspaper said. 
   ((john.stonestreet@reuters.com; +44 20 7542 9635))
 ($1=.6006 pound)
 Keywords: EU LLOYDS/
  
Tuesday, 15 September 2009 23:01:26RTRS [nLF665530 ] {C}ENDS

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