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Schroders: Lloyds sell-off plans set dangerous precedent

by: IFAonline
  • 20/06/2011
  • 0
Schroders: Lloyds sell-off plans set dangerous precedent
Influential asset manager Schroders has branded suggestions that Lloyds Banking Group sell more than the recommended 630 branches as setting “a dangerous precedent for UK banks”.

In a submission to the International Commission on Banking (ICB), the company says the plans may harm competition in British banking and undermine EU lawmaking, according to Sky News.

An ICB interim report in April recommended taxpayer-backed Lloyds Banking Group sell more than the 632 branches initially ordered by the European Union (EU).

The EU wants Lloyds to sell branches to reduce its dominance on the high street.

According to an unnamed source quoted by Sky, Schroders’ submission states: “Given that HBOS [which Lloyds TSB bought during the banking crisis] had 1300 branches any substantial enhancement would effectively reverse the merger on the retail side.

“We feel that any increase in divestment sets a dangerous precedent for UK banks. According to law it is the EU that is the highest authority on competition.”

On 30 June, Antonio Horta-Osorio, Lloyds’ new chief executive, is set to reveal his plans for the company following a review.

According to reports, Horta-Osorio is likely to push the Halifax to become the group’s prime retail brand but still retain the Lloyds and Bank of Scotland branch network.

He is also expected to provide a firm commitment to retaining Scottish Widows and Scottish Widows Investment Partnership, its fund management arm.

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