Europe approves Lloyds restructure
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The European Commission has approved Lloyds Banking Group’s restructuring plan.
In order to provide Lloyds with a £17bn bail out last October, the Government required approval from the European Commission.
This approval was conditional upon the submission of a restructuring plan and this plan, which contained additional state aid, was submitted to the Commission in July this year.
The Commission has confirmed having assessed the past and new aid on the basis of the notified plan, and in view of amendments agreed by the UK authorities, it is satisfied that the restructuring plan is compatible with EU rules on state aid.
The measures outline that Lloyds will pay a significant proportion of the restructuring costs, ensure a sustainable future for Lloyds without continued state support and that there will not be undue distortions of competition.
Competition Commissioner Neelie Kroes says: “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.
“This decision once again demonstrates the important role that the EU’s state aid rules play in facilitating sustainable bank restructuring whilst preventing undue distortions of competition. This is to the clear benefit of both customers and taxpayers”.
The Government has welcomed the news.
City Minister Lord Myners says: “The Government’s decisive action to support Lloyds and other banks protected the savings of millions of families and the jobs of thousands.
“With the bank now on a more secure footing, we can begin work to make sure Lloyds plays its part in reforming and repairing the banking system for the future.
“The divestments Lloyds will make following today’s approval will lead to an important shake-up of the UK retail banking market.
“Together with divestments from RBS and the eventual sale of Northern Rock consumers could have three new banks competing for their business on the High Street within four years.
“We thank the European Commission for their support and hard work in getting us to this important milestone.”
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