Belfast Telegraph

Lloyds group to set up EU subsidiary to maintain access to single market

Taxpayer-backed Lloyds Banking Group is reportedly planning to set up a subsidiary in Europe to maintain access to the EU's single market after Brexit.

The group is preparing plans to ensure it keeps access to the European payment system and maintain its German and Dutch retail clients, according to the Financial Times.

Lloyds is the only major high-street lender without any subsidiary in an EU country, as it is heavily focused on the UK, but the bank has offices in Frankfurt and Amsterdam.

It is understood the group is considering converting one of these two branches into a subsidiary.

Lloyds declined to comment.

The group has a mortgage branch in the Netherlands with around £8 billion of loans, while it has an online bank in Germany with some £12 billion of customer deposits.

Financial services firms have been drawing up contingency plans amid fears the Government's Brexit negotiations will see the UK lose passporting rights to grant free access to the EU's single market.

Passporting rights allow UK-based financial firms to access clients across the 28-nation EU via branches and has seen London become a hub for global firms looking to do business in the EU.

Insurance market Lloyd's of London outlined a timetable earlier this month to move parts of its business to the EU, saying it was aiming to name an alternative location by February.

It is understood Lloyd's has shortlisted five EU cities that could house a portion of its operations after Brexit in a bid to protect its European revenues.

A number of other banks have also warned they would shift business out of London since the Brexit vote.