The restructuring plans, which are still subject to final European Commission (EC) approval, are designed to promote greater competition in the UK banking sector and meet EC fears over unfair competition as a result of state aid. To ensure that the disposals increase competition, the assets will only be sold to small, foreign or new players in the market.
LBG has proposed to sell Intelligent Finance, the 164 branches of Cheltenham & Gloucester (C&G) and its TSB brand, which will include Lloyds TSB Scotland branches and selected Lloyds TSB branches in England and Wales. This will be equivalent to 19% of Lloyds’ mortgage assets.
A spokesperson for Lloyds said there will be no immediate difference for customers because the changes will take time.
She added: “It will be business as usual for the branches. The locations of the particular branches which will be sold will be identified nearer to the time of sale.”
RBS hopes to offload 318 branches, which include its Scottish NatWest branches, its Churchill and Direct Line insurance arm and its RBS-branded branches in England and Wales.
Stephen Hester, chief executive of RBS Group, said the branches will be moved to new ownership in a way which minimises disruption for customers.
He added: “While the required divestitures include businesses which were part of our plans, the group’s essential strengths remain intact.”
David Hollingworth, head of communications at London & Country, said the disposals should create more competition in the market.
He added: “Offloading branches should be beneficial for customers as there will be more market players. I believe LBG and RBS will remain committed to the intermediary market, and I hope that the banks which buy the branches will maintain their commitment to the sector.”
