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BBA Conference: EU may force Lloyds RBS break-up

Semi-nationalised banks RBS and Lloyds Banking Group may have to be broken up due to unfair competition advantages, says the EU competition commission.

Speaking at the British Bankers Association Conference in London, European competition commissioner Neelie Kroes said the banks are remaining the most competitive thanks to their state aid.

She said: “The massive aid received by banks such as Lloyds and RBS allows these banks to remain leaders on markets which are concentrated.

“The need for competitive market structures is stronger than ever; the likelihood of significant divestments by RBS and Lloyds is strong.”

Earlier this week, Northern Rock revealed that the EU Competition Commission has ordered further evidence to prove that its aid package and impending Government-backed restructure had not created unfair market biad.

Kroes did not detail any plans for any break ups, but denied that it would cost Lloyds and RBS staff further jobs. Today Lloyds revealed it would be cutting another 2,100 jobs.

She said: “We aren’t interested in cutting jobs or closing whole businesses. It is only our job to ensure that banks are in a state to survive on their own, and to ensure competition is not allowed to drain away,”

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